FACTORING
It can take weeks or even months for a client to satisfy an invoice. In the meantime, your business still needs to meet expenses. Factoring eliminates the wait time and lets you get on with providing the goods and services you are known for.
What is Factoring?
Factoring is a form of financing that lets you sell your accounts receivable to a financial firm called a factor. The factor evaluates your client invoices and gives you a percentage of their value in a lump sum payment. It then collects repayment directly from the client who owes on the invoice. Any overage gets forwarded to your business, minus a small factoring fee. Factoring gets your business fast cash and eliminates the hassle of collections.
Outstanding invoices, purchase orders, contracts, and other accounts receivable qualify for factoring. The factor looks at your clients’ history of repayment and business credit when processing your application. This focus on your client eases the focus on your business when it comes to credit issues. So if your business hasn’t had the time to build up a strong credit history, it’s not a deal breaker.
Fast
Because factoring is not a loan, applications can be processed without a mountain of paperwork. This means a shorter wait time to get approved. Talk to us about finding a factor with a streamlined application procedure.
Convenient
You could spend hours and hours sorting through online lenders and factoring firms, trying to guess who to trust. Instead, connect with us to find a vetted, reputable factor who will handle your account with care.
Easy
With factoring, your business doesn’t incur debt and offloads the hassle of collections. Even if your business is just getting off the ground, it can qualify for fast funding. We’ll make it easy to get the cash you need.
ADVANTAGES OF
FACTORING
- Factor multiple accounts
- Relies on your clients’ credit, not your business’s
- Low factoring fees
- Get cash in a matter of hours
When is Factoring not a good fit?
If your business doesn’t have accounts receivable, you won’t be able to utilize factoring. We can help with small business loans, term loans, and working capital loans to get you the cash you need.
Is there a minimum or maximum amount I can factor?
The factoring limits depend a great deal on the factor you use. Some specialize in large accounts and some deal with more modest accounts. We have relationships with factoring firms at all different levels, so you can get financing no matter what size your accounts may be.
How does a factor affect my client relationships?
Since factors collect directly from your business’s clients, you might be concerned about how your clients will be treated. Most of the time, clients won’t notice that you’re using a factor at all. They’ll get a notice that advises them of where to send payments but not much more. If a client does happen to notice, they’ll likely be impressed with your smart business sense.
What if my client doesn’t pay?
In the event that your client requests a return, a refund, or just refuses to pay the invoice, your business will be responsible for returning funds to the factor. It’s important to choose which accounts to factor based on your client’s past history. In most cases, your factor will help you with this decision.