Factoring is the sale and purchase of accounts receivable at a discount. It’s a financing method used by businesses to generate capital. Accounts Receivable Funding (Factoring) is a most often used as a method of choice to finance business capital needs quickly and improve cash flow. It turns invoices and accounts receivable to cash or lines of credit and effectively delegates your bill collection activities elsewhere.

You set up an account with a Factor to sell invoices for goods or services sold and delivered and you’ll receive immediate cash advance rather than wait on your customer to pay. When your customer makes a payment, they’ll send it to the factor. Factor will then deduct the initial advance you received and applicable fees, and rebate the balance to you. 

No. However, you must change the payment address to Factor’s. In some cases factor will send out invoices directly. 

Your customer will be sent an official but friendly notice of where to send the payment. We would generate your invoice in most cases with the new payment address of the Factor. 

Only customers whose invoices you factor will be contacted. Generally our program is initiated by the customer and they lead the communication methodology best suitable to them. 

Generally no. You may pick and choose which customer’s invoice to factor, however acceptance shall be governed by guidelines as established in the factoring agreement. 

Non-notification factoring is hardly available anymore and mostly only through major banks and subsidiaries, but often with much more stringent qualifying criteria, extra scrutiny, and even making such a request can arouse questions about your client relations, you, and your organization. But why wouldn’t you? Over recent decades, factoring has evolved to become a very fine financing strategy that is used by many astute managers in diverse industries, often in conjunction with, or as a substitute for other financing methods. You might be surprised; perhaps your customer is already familiar with it. However we offer unique collection methodologies that may help. 

 We offer various rates based on your volume and time commitment to our factoring program 

There are many factors such as industry, volume, payment terms etc that may influence the rates but it is generally between 1% and 5% per thirty days.

Advances are between 70% and 95% of the face value of eligible invoices and are established at the time an account is opened. Established advances will for the most part depend on risk factors such as industry, terms of sales and delivery, volume, lien priority, time outstanding, client relations, experience etc.. Our programs can be tailored to the needs of our clients based on the risks associated with the customer base and industry that we are covering. 

The time and frequency of advances often depends on when and how frequently you submit invoices for funding, whether it is early or late, daily, weekly, bi-weekly or monthly. Advances can be paid in any number of ways; the typical way is by wire transfer. The other payment options are by ACH, teller deposit, check by mail, payment on location etc. 

All balances less applicable fees will be rebated to you after it is collected. 

A long-term contract is usually required so that we can offer our clients the volume discounts and better gauge the risks associated with their particular customer base.  Industry wide it is often necessary in order to be viable and induce Factors to underwrite your funding at favorable rates and terms to you. 

 You qualify if you are a legally registered business selling goods or services on terms to other credit-worthy and reputable businesses, and you have full and unencumbered rights to receive payments. 

Factoring is largely based on the credit-worthiness of your customer base –the individual or organization who will be paying for the goods or services sold. There’s very little if any consideration at all on your credit other than the legal standing of your organization and the particular goods and services that you offer. You may be eligible to factor even if you have some credit issues, on-going bankruptcy, loans, or other lines of credit. 

The majority of factoring clients are small businesses and start ups. We specialize on regulated markets where the customer base is particularly stable and may only operate under stringent licensure processes. 

It may take anywhere from 1 – 10 days to set up an account depending on your unique situation and technology interface. A typical account can be set up in as little as 3 days all things equal, and funding within 24-48 hours from then on based on the particularities of our agreement with you. 

To get started, you submit an application with some basic supporting documents. A fee of $1000 covers our due diligence of your situation and factoring needs. If approved, final agreements and administrative process documentation will be completed for funding. 

 Many factors do charge large upfront due-diligence fees and administrative fees in order to investigate and qualify your accounts for funding after initial review and acceptance. We charge a once time flat application fee of $1000 to cover all costs associated with account setup. Please note, technology setup costs will be determined seperately should they be requirement to automate and simplify the factoring process.

The typical initial documents required to open an account are: Proof of business registration, photo identification of principals, customer list, invoices, and copy of accounts receivable aging. 

Once you start factoring, Factor will be responsible for and will do all collections on funded invoices unless exceptions are made. 

 No, as long as you are located within the U.S there are no other geographic or territorial restrictions and we can also provide some international factoring. Industry specific factoring needs will dictate states that may qualify for our services. 

 You’ll receive regular reports. In most cases, you will have direct online access 24/7 to your reports using your very own unique access code. Or you can request reports by fax, email, or call. 

 Our agreement may be set up as a recourse or non recourse account. A recourse account requires a guarantee that you will either buy back unpaid invoices, swap it out, or deduct the amount from your reserve funds in-full or progressively until paid in full. With a non-recourse account the loss will be absorbed under certain conditions. 

Yes, some form of guarantee will be required to affirm your integrity, representations, warranties, and the validity of your statements, documents, attesting that you will perform as per the terms and conditions of the agreement and not commit fraud. 

To stop factoring you should send notice of termination as per your agreement. After all accounts are paid in full and all obligations under the terms and conditions of agreement has been satisfied, your remaining reserves and future receipts will be paid to you, and a general release will be completed. 

We will consider purchase order funding requests between $10,000 and $10MM

All of the above depending on the situation. Our preference is by Letter Of Credit (LOC). 

Yes, in situations where there are multiple suppliers involved, we will issue payments to different suppliers within reason. 

 Quite simply Purchase Order (P.O.) Funding is made before goods or services are delivered to buyer while invoice funding is done after goods or services is delivered. They’re both short-term funding except one provides funds to facilitate the production, acquisition, and delivery of pre- sold goods and the other is to provide expedited access to funds after delivery. We only provide for invoice funding.