Fast and easy to start — Begin factoring your invoices right away

Cash advanced for your accounts receivable in days — Stop waiting weeks, months or even longer to receive payment for your invoices. Gain more cash flow and stimulate your company's growth by factoring your accounts receivable.
 
Add capital to your business that is not a loan. There are no loans to pay back, no closing costs, no origination fees, no interest, and no long-term commitments required.

Increase marketing efforts — Use the increased cash flow from factoring to increase the advertising and marketing of your business and benefit from more revenue for expansion or growth.

Gain more reliable weekly cash flow, for better planning and growth — Factoring offers more working capital and the opportunity to save for growth and emergency funds. You always have a place to get cash from your outstanding invoices and accounts receivable quickly and easily.

Reduce the stress involved with a lack of cash. Invoice factoring offers a low-cost financial tool to ease cash flow pressure caused by slow paying customers and takes stress off your company.

Cut administration costs associated with collection activity — Save your employees' time for better things than collecting on invoices. You don't need to hire a collection manager. The factoring company take care of collections.

Gain more business with better terms for customers — With the improved cash flow gained from factoring you have the flexibility to offer better terms to new and existing customers, allowing you to grow your business and expand your customer base.

Approval is based on the financial strength of your customers. Because funding is based on your customers and not your personal business credit score or FICO scores, even businesses in challenged financial situations can use factoring services to overcome their cash flow obstacles.

Concentrate on important parts of your business instead of collecting invoices. Spend time doing what you do best - running your business - and leave the invoices to us. You receive cash for factoring your invoices immediately, and we take on 100% of the risk of collecting on the invoice.
 

WHAT IS FACTORING?

Factoring is a type of financing where businesses sell their accounts receivable (invoices) to companies known as factors. As a financial tool, factoring helps businesses improve their cash flow. Factoring is neither a form of debt, nor is it equity financing. And, it is not, as some people assume, a loan.

ISN'T FACTORING JUST FOR FAILING COMPANIES?

Factoring in the past had gained a reputation as a financial "last resort" for faltering businesses. While factoring can help problem businesses, it is primarily a source of financing for new or rapidly growing businesses. Factoring allows businesses to improve their cash flow and quicken their growth by shortening their receivable cycle. By selling their invoices, businesses can eliminate the 30, 60, up to 90 (or more) days wait for customers to pay on their accounts.

HOW MANY INVOICES AM I REQUIRED TO FACTOR?

Factoring does not require you to enter long-term, restrictive contracts or meet minimum monthly requirements. This flexibility allows companies to factor when, and how often, the need arises. A company can factor all its invoices one month, and none the next, depending on their cash flow needs. This is especially beneficial to those companies who experience seasonal or unexpected sales changes.

DOES MY BUSINESS NEED GOOD CREDIT TO FACTOR?

Businesses do not have to have an outstanding credit history to factor. Instead, The Factoring Company analyzes the customer's  credit-worthiness of its clients' customers and their ability to pay. This is beneficial to new companies that do not have an established credit history needed to secure loans or other financing.

DO OTHER BUSINESSES USE FACTORING?

Although factoring is not common knowledge to all businesses, it is well used in the business world. Many companies, including Fortune 500 companies, such as Applied Materials, Bethlehem Steel, Xerox, and Sara Lee* use factoring as a form of financing.

HOW CAN MY BUSINESS BENEFIT FROM FACTORING?

Focus on business operations instead of cash flow concerns
Increase production and sales
Take advantage of trade discounts, or those discounts offered by suppliers for early payment
Meet payroll or payroll taxes
Finance expansion without debt
Fund marketing or e-commerce projects
Pay off outstanding debt
Improve credit rating with timely payments
Improve balance sheet by increasing cash and decreasing A/R
Eliminate need for outside investments, such as loans, credit cards
Position business for outside investment, such as attracting bank financing or SBA loans

IS FACTORING MORE EXPENSIVE THAN OTHER SOURCES OF FINANCING?

Some people may try to suggest that factoring is more costly than other types of financing. However, utilized in the proper way, factoring can be quite cost-effective. Here are some options:

Knowing the typical payback period of customers will allow a business to factor an invoice at the right time along its payment cycle, and thus reduce the cost to that business. For example, if a customer usually pays on the 40th day, a business might want to factor the invoice on the 20th day to limit the per diem fee charged.

With the funds it receives from factoring, a business can take advantage of early payment discounts offered by their suppliers. For example, a business might be able to save 3% from its supplier if it pays within 15 days.

Also, with more working capital, businesses have the capability to purchase higher volumes of supplies, thus making them eligible for volume discounts from suppliers.

A business can stop offering its customers early payment discounts since it receives its funds immediately from factoring.
A business could modify its prices to offset any fees incurred from factoring. It could also increase its prices by a percentage and offer an early payment discount at the same percentage to those customers who pay within a given period. This way, timely paying customers would pay the original prices, while late paying customers would offset any factoring fees.

INDUSTRIES IDEAL FOR FACTORING:

Factoring can be a beneficial form of financing for most any industry, especially ones where accounts receivable realization does not match operational needs. In other words, industries where large proportions of invoices are not paid in time to meet payroll or other debt obligations. Some of these industries include:

Manufacturers
Import
Defense Contractors
Communications  Temporary Employment Services
Janitorial Services
Transportation
Computer Hardware/Software  Consulting
Distribution
Food
Professional Services
(Financial, Legal) 
Due to credit and trade laws, Factoring Companies do not factor third party medical or construction industries. 
 
BUSINESSES IDEAL FOR FACTORING:

Simply, if a business makes or sells a product or delivers a service to a credit-worthy commercial customer on trade terms, that business is a candidate for factoring.

The need for working capital to support operations required for revenue growth (e.g. marketing, product development, payroll, accounts payable).

Periodic cash flow pressure due to seasonal demand or unexpected sales is experienced more than 2-3 times per year.
For any number of reasons, do not possess or choose not to possess traditional bank credit lines to support operational growth.

The need for accelerated receipt of outstanding invoices.
The desire to take advantage of trade discounts or other long-term sensible financial investments.
 

 How Does Invoice Financing Help Businesses Grow?

 How factoring works: Accounts receivable factoring or invoice financing is a way to fill the gap between when a company invoices its customers and when that company receives payment for its services.
 
Factoring advantages include account receivables management, providing you with credit control and collection services — all the support you need for a back office.
 
Here’s an Example of Factoring in Action — Advantages and Benefits for Your Business:
 

The Crispy Potato Chip company would like to purchase $100,000 worth of individual serving bags from Jill’s Bag Company. Jill checks the credit worthiness of Crispy Potato Chips, and the Factoring Company advises Jill that their credit is fine and she can proceed with the order.

 •Jill ships the bags and issues an invoice. •An accounts receivable factoring agreement has already been entered into with  Jill’s Bag Company.
 •Jill sends the original invoice and receiving document to the Factoring Company, her invoice financing company for invoice funding.
 •The invoice financing company verifies shipping, receipt, and that there are no merchandise problems.
 •Within 24-48 hours, Jill’s invoices are funded at  90% of the face amount, and Jill receives  $90,000.
 •The invoice financing company holds a reserve, or escrow, account for 10%.
 •When the invoice is paid by the Crispy Potato Chip company, Jill receives the remaining 10%  less  the invoice factoring