WHAT IS FACTORING?
Factoring is an asset based financing method whereby a company uses its account receivable to generate immediate cash flow.
A factoring company purchases your companies account receivable portfolio and will immediately advance up to 95% of its face value. The balance of the funds – less the factors fee and discount – is released back to you once the receivables are collected.
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Factoring Program Highlights
- It generally takes 7 – 10 days to process your application to become a client
- Once you are a client, each time you submit your A/R funding will generally take place within 24 hours
- Our Factoring companies will also evaluate promising start-up companies
- No Personal guarantees
- No term contract (Open-ended agreement, cancelable by either party)
- No liens on corporate assets other than Accounts Receivable
- Funding is based on your A/R not your credit
- Provide labor intensive credit and collection services
- Quick Response
The objectives of a factoring program are to
- Enhance balance sheets by improving debt-to-equity and debt-to-asset ratios.
- Accelerate and stabilize cash flow = control
- Free your time so you have more time to grow and focus on your business
Enhance performance by:
- Curtailing bad debt = greater profit
- Controlling dilution = greater profit
- Reducing the average days outstanding of invoices: Less financing = Greater Profit
- Providing timely and accurate reporting: Better information = Control / Decisions
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