Factoring
Welcome to your online resource for factoring, invoice factoring, accounts receivables factoring and financing. Do you have clients that are taking around 30 to 60 days or more to pay their invoices? Even though times are a little difficult for businesses, your business is really expecting that income to meet payroll, paying expenses and pay suppliers. Plus aren't you in business to make a nice profit
Here's how factoring your invoices will solve your problems.
Invoice factoring is a way of financing that lets you to get your invoices paid in as little as two days! It provides your company with the necessary capital to operate the business, pay suppliers and grow. However, factoring is not a business loan. Instead, factoring is the simple process of selling your invoices at a discount for immediate cash. The factoring company/broker waits to get paid, while you get immediate use of the funds.
This is how receivables factoring can work in your business…
First, your company delivers the products, goods or services and invoice for them (your customer/client).
Secondly, you could sell the invoice to the factoring company or factoring broker. They will give you the first installment of 70% to 90% of your invoice. This is referred to as the advance.
You get immediate funds to run your business.
Once the customer pays the factoring company, you get the second installment (of 10% to 30%) and are charged a small fee for the transaction. This is referred to as the rebate.
Usually factoring costs vary and are based on the size of the transaction and the timing. The average cost of a factoring transaction is usually between 1.5% to 3% of the invoice per month on average.
One of the nicest things about accounts receivable factoring is that it is easier to obtain than a regular business loan. Also, the factoring line can be set up in about a week, and the biggest requirement for approval by a factoring company is that do you business with credit worthy clients. If your client is not credit worthy, then the factoring could get denied. Check with us for more information regarding this process and as always we provide you with quick and courteous service.
