Factoring

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Factoring Accounts receivable

Factoring is the purchase of your accounts receivable (invoices) in order to provide you with the cash flow you need when you need it. Factoring is a widely accepted business practice used by large, mid-sized, and small companies. Factoring could be a valuable tool for a small or mid-size business serving two distinct functions. The first, and often overlooked, function is to serve as the outsourced provider of such business functions as credit analysis, providing the credit guaranty for the approved customer billings, booking invoices , creating an accounts receivable ledger, monitoring the invoices' maturities , executing the correct collection procedures, applying the customers' remittances , record the deductions so the client can either approve or pursue for collection of unauthorized deductions and crediting the client with the net proceeds.

The other function is to provide liquidity to the client by advancing funds against the uncollected accounts receivable and by advancing against inventory before it becomes an account receivable. The main benefit of receivables factoring is the immediate increase in working capital which, among other things, can fund expansion and growth. Due to the fact that receivables factoring is contingent upon your customer's creditworthiness, it does not matter if your company's credit is poor or not yet established.

Generally providing liquidity is the function of a factor that small and mid-size businesses are taking advantage of. However, many companies could see the benefit of outsourcing credit-related activities to a factor where synergy can allow the activity to be done more efficiently and cost-effective.

Funds received from factoring are in general much less expensive than having to raise additional capital. Factoring is a distinct alternative and will allow the business owner to retain equity while receiving the necessary funds to expand operations. Factored invoices can have funds available in days as opposed to weeks from normal bank source, or having to sell part of your company.

Factoring Rates

The main benefit of receivables factoring is the immediate increase in working capital which, among other things, can fund expansion and growth. Due to the fact that receivables factoring is contingent upon your customer's creditworthiness, it does not matter if your company's credit is poor or not yet established.

Purchase Order Finance

Have a large order that you do not have the financial ability to fill. We can finance against your credit worthy purchase orders and allow you to capture client's business that would not normally be available to your company.

Recourse vs. Non-Recourse

In most instances factoring of your accounts receivable is non recourse to you the owner of the company. The factor will assume the credit risk and advance the funds thus allowing you to concentrate on obtaining more orders and expansion .