Our Services » Factoring
Factoring is a long standing and increasingly utilized financial tool that speeds up the cash flow a company has available. Many subcontractors, manufacturers and suppliers leverage this powerful advantage by working in concert with factors who purchase their credit worthy accounts receivable at a small discount and convert their invoices into immediate cash. A well-orchestrated partnership with a factoring company can relieve the working capital shortfall that can occur with slow paying clients, growing businesses, seasonal or cyclical growth spikes and other business challenges. This accessibility to earned cash helps businesses stay current with their financial obligations so they can readily grow and focus intently on creating more sales providing more service and manufacturing more products.
Which kind of companies factor?
- Business start-ups which can’t yet qualify for traditional financing
- Rapid growth companies
- Companies needing capital that don’t want to create debt
- Companies needing capital that don’t want to give up equity
- Emerging companies with limited capital
- Companies with questionable earnings trends
- Companies with payroll tax problems
- Companies with cyclical or seasonal growth spikes
How does it work?
Our overall process is simple, efficient and handled with the highest of professional standards. It is intentionally designed to provide a financial benefit to our Clients in the shortest possible time. The steps to qualifying for our factoring services are few.
- Client completes agreement to factor
- Partner approves credit of Client’s Customers
- Client delivers invoices to partner
- Invoices are verified and funded by partner
What will my clients think of the process?
A common question asked by potential factoring Clients is:
What will my Customers think about my Company factoring my receivables?
Very simply put, most customers today already have other subcontractors, manufacturers and suppliers that are engaged in factoring relationships. They are familiar with the process and its benefits. In fact, they may actually gain more confidence in your Organization knowing that you have a funding facility in place that will help insure the delivery of your product or service.
The accounts receivable factoring business in the Unites States has truly come of age and is viewed as a phenomenal alternative finance strategy for many businesses. Factoring volume in the United States now exceeds $150 billion annually and chances are that your customers already have several Vendors, like you, that use accounts receivable factoring to improve their cash flow, grow their businesses and provide greater levels of products and services to their customers.
Consequently, accounts receivable factoring should not adversely affect your relationship with your Customers and in fact, should posture your company to acquire and execute greater levels of work for your customers of choice. Your customers should now have increased confidence that you have the cash flow necessary to satisfy their needs.
What are the benefits of working with us?
Significantly increase the cash flow of your business
Earned cash is available for qualified receivables in as little as 24-hours
Use readily available cash to grow your business
Funds generated by factoring can be used for new equipment acquisitions, inventory purchases, marketing expenditures, facility improvements, etc. that otherwise may not have been feasible when you needed them most.
The process is very efficient and reliable
Once approved, our clients trust us for a user-friendly approach to doing business each and every month. Payments to our clients are dependable because we understand what a predictable stream of cash can mean to the life of any business.
Use what you need when you need it
There are no required monthly minimums for factoring and no long-term obligations. We recognize that factoring should be a “bridge mechanism” to more traditional financing and that typically our services are a season in the life of most businesses.
Capital availability is flexible
Factoring is the only means of business financing that can grow proportionally and immediately with your business as you need it.
Minimize internal costs associated with collections
Your company will spend less time on collections since we take on most of this task. Thereby you can focus more of your efforts on higher value-added activities such as sales and production.
Better knowledge of your customer’s credit
We are extremely proficient at verifying your customer’s credit and ultimately their ability to pay your invoices. This enables you to make more informed decisions on where to target your efforts for the greatest gain and minimize your bad debt write-offs.
Leverage your customer’s credit rating
Your customer’s good credit rating is one of the strongest assets you can have when factoring. It is their positive history as much as anything that makes this process work for you.
Factoring is not a loan
No debt is created when factoring so there is no negative impact on your financials. You are not using long-term debt to satisfy a short-term need for cash. This increases your appeal to traditional financing because factoring creates cash in your bank account not debt on your Balance Sheet.
Take advantage of early payment discounts to suppliers
Minimize some of your factoring costs by leveraging supplier offered discounts for early payment and simultaneously increase your credit rating.
