ADVANCE FUNDING OF ACCOUNTS RECEIVABLE (FACTORING)

Accounts Receivable Financing (aka Factoring) is the selling of existing invoices at a small discount (typically 3 to 5%). Cash is received immediately instead of waiting for your customers to pay when they want to.

In many situations, Receivable Funding is more appropriate than bank financing, because:

Factoring is not a loan.  It is based only on your accounts receivable and the strength of your customers rather than on traditional measures of your company's "creditworthiness" or financial strength.  

Factoring grows as your business grows provides continuing cash flow without the requirement of periodic payments or interim payoffs.  New sales continuously create new power to obtain cash, and the business does not have to deal with renewal of loans or worry about maturity dates.

Factoring gives a business increased access to cash as sales and receivables increase.  There is no ceiling beyond which the factor must stop providing cash. The more sales a business makes, the more cash it can draw. The factor does not concentrate on the business debt/equity ratio to provide funds, as banks do.

Factoring offers a dependable, continuing sources of cash without the necessity of making separate loan applications.

Factoring DOES NOT involve giving up ownership in your company. 

Factoring can be setup quickly.  It will saves you, the business owner, precious time waiting for a loan board to grant or deny his or her loan.  Loan boards' decisions are influenced by many considerations, and the outcome is often unpredictable. With factoring, periodic delays and negotiations are eliminated, allowing you to get back to running your business with the assurance of flexible funding that will grow as your business grows.  

What are the benefits of Receivables Funding?

Receivables funding is quick - there is no lengthy application and approval process. 

Receivables funding provides fast access to working capital that grows with your business.  

Receivables funding can strengthen your balance sheet since it isn't a loan.  

Receivables funding is flexible - there are no restrictions on the use of the funds.  

Receivables funding is based on the creditworthiness of your clients not yours.  

Receivables funding can be a cost savings - allows you to take advantage of early payment / volume discounts.   

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