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Purchasing Commercial Accounts Receivables, A/R's or Invoices...Also Known As Factoring....

Factoring Is The Purchasing Of  Business To Business   or Business to Government Accounts Receivables

Factoring is the purchase of accounts receivable, or invoices, at a discount. This investment method has been in existence for literally centuries and is practiced widely across the United States and is even more common in Europe.

Now, a reasonable question to ask is this, "Why would a business owner want to sell his receivables?"

The answer is simple: Waiting 30 or 45 days to receive payment can put a real squeeze on a company's cash flow. If they make a product or have to meet payroll, waiting that long can mean a cash shortfall when materials are needed for new orders, or when payday rolls around, especially if it's every week or two.

Factoring is not a loan with interest due, but the purchase of an asset at less than its face value — that is, at a discount. Because factors do not lend money, but rather buy invoices, they look at prospective clients differently than a bank. A bank makes a loan with the assumption that the business to which the loan is made will be stable enough to repay. Factors look to the stability of the customers of the business clients, because the customers will be paying the factor — not the client. Thus, the focus is different — and because the focus is more on the customer than the client, factors often welcome clients that banks turn away. In fact, bank referrals provide factors some of their best leads.

For the sake of simplicity we'll use the following example to illustrate a typical and modest transaction. Suppose a factor purchases a $1,000 invoice, gives an 80 percent advance, and charges 5 percent of the face value of the invoice, assuming payment is received in 30 days. (Any of these numbers might be higher or lower.) After providing the advance ($800 the client now uses for any business need at hand) and waiting 30 days, the factor receives payment for the full $1,000 from the customer. When this payment arrives, the factor repays himself the $800 advanced, keeps 5 percent or $50 as a discount, and rebates the client the remaining 15 percent, or $150. Thus the client has paid a discount of $50 to receive $950, $800 of which he received immediately.

A business pays, in this example, $50 to have $800 tomorrow, and gets the other $150 in a month. Meanwhile, what has the $800 in hand enabled the business owner to do? He can buy inventory to make more sales, have cash on hand to take advantage of discounts, provide working capital to pay bills, meet payroll, pay taxes, or whatever the business might need. The company has accessed instant cash for an otherwise nonperforming asset: receivables. No debt is generated, the discount is paid after the cash advance is received, and the cash has enabled the company to increase profits with greater sales volume. Further, the discount has more than paid for itself.

We Also Provide Working Capital For
"Commercial Construction" and Contractor's  ...see the lower section of this page for details on Construction Funding 

If your customers are not paying their invoices in a timely manner, we can factor (fund) these invoices and get you the cash you need to grow your business or simply to your business survive!

21 Reasons to Factor:
   * Reduce Bad debt
   * Professional Collections

• Invoice Processing
• Offer Credit Terms to Customers
• Meet Increasing Sales Demands
• Take Advantage of Early Payment Discounts
• Take Advantage of Volume Discounts
• Stop Offering Early Payment Discounts
• Don't Give Up Equity
• Don't Incur Any Debt
• Helps Build Credit
• Fast and Easy
• Leverage Off a Customer's Credit
• No Personal Guarantees
• We Assume the Credit Risk
• Detailed Management Reports
• Invoices Are Paid Faster
• You Can Concentrate on Growing Your Business
• No Geographical Limits
• Early Detection of Customer Service Problems
• Credit Screening & Monitoring

Benefits of Factoring
Accounts receivable funding is the selling of interest in your invoices or receivables to a private investor, or factor, at a small discount. Accounts Receivable (A/R) funding provides over $200 Billion dollars to the Industry each year. In fact, factoring is a centuries old financial service used by multi-billion dollar corporations that is now available to smaller businesses who banks are usually reluctant to lend funds to. Receivables financing fills a tremendous void.

The Invoices to your Business or Government customers for goods delivered or services rendered can be converted into a "Credit Line" from which you may draw cash to better manage your business. Draw only as much as you need and pay only for what you use. Advance funding is a tool that you can use to:

Raise capital without creating debt
Improve the cash flow of your business
Take advantage of discounts on materials
Make payroll
Pay back taxes
Let someone else handle the collection process

Approval is based on the credit worthiness of your client, so you do not have to be concerned with being turned down. Even if you have had a bankruptcy, tax liens or slow pays, we can get you funded through our investors typically within 5 to 10 working days, provided your customers are approved for funding.

We can help you manage cash flow swings by getting you your money sooner and creating a line of credit based on your receivables rather than you waiting 30, 45 or 60 days. Your suppliers get paid quickly which may enable you to negotiate better pricing.

The difference between advance funding with a private investor and a bank loan is that in factoring you use your customer's credit line as leverage, not yours. A bank loan is based only on your assets and the ability to repay the loan. When you factor, there is no loan to repay. Your growth potential is based on your credit worthy customers and is virtually unlimited. The more credit worthy customers you sell the higher your credit line becomes. 

Success By Design Capital provides funding/factoring for your business needs. We may establish a credit line that effectively multiplies your working capital by 'turning it' more often. Compared to bank lines, this type of "credit line" uses far less collateral, requires only minimal paperwork and can typically be in place in less than a week and best of all, grows with your business.
The credit line compliments any loans that you have or are seeking, yet allows you to access additional funding. There is no faster financial service available for businesses.

"There is no need to change anything about the way you do business!"

By taking discounts from the vendors and possibly adding a little to your invoice, you may be able to factor for free. Also, this is often less expensive than a Bank, that charges closing costs, origination fees, points, as well as Interest. 

Who Can Benefit From Factoring?
Any industry which is not a "cash & carry" business qualifies for factoring programs, as long as an invoice is generated and a verifiable product or service is delivered. Below are some examples:

• Personnel/temporary agencies
• Trucking companies
• Caterers
• Commercial printers
• Commercial bakeries
• Construction Companies
• Manufacturers
• Wholesalers
• Importers
• Distributors
• Apparel (garment. textile}
• Communications companies
• Footwear manufacturers
• Toys and sporting goods
• Security companies
• High-tech and related industry
• Cable installers
• Professional services (legal, accounting}
• Medical groups
• Physicians
• Hospitals
• Nursing homes
• Assisted living facilities

                         
              CONSTRUCTION CONTRACTORS! 

Working Capial for Minority and Locally Based Businesses Affected By Hurricane Katrina 

We Offer...
      * $25,000 to $5 Million 

      * Funding in 24 Hours 

      * No Financials Necessary 

      * Excellent Opportunity for: 

          Subcontractors & General Contractors...

Partnered With The Nation's Largest Construction Contractor Factoring Company. We get the difficult done every day... If we can't do it... Nobody can.

Working Capital For Contractors...

                            * Bonded/Non-Bonded 
                                  * Financing       
   * Payroll Financing
   * Project Financing
   * Payables Financing
   * Credit Lines
   * Material Financing
   * Receivables Financing
   * Equipment Financing
   * Subcontractor Financing

We Do The "Difficult" Everyday........

Through its Construction Receivables Funding Services, Success By Design Capital facilitates the sale of your existing invoices to provide immediate cash. Rather than waiting months for payments due your firm, Construction Receivable Funding provides the money you need for payroll, raw materials, and equipment at the time you need it.

Construction Receivable Funding  requires specialized knowledge to successfully implement these transactions. State laws for construction receiving vary and permission requirements for the involved parties are different from other forms of factoring. The consultants at SBDC are experts at matching the right factoring company with your construction receivables. SBDC and our funding affiliates deliver smooth transactions and quick cash for your business needs.  

Contact Us Today!

Success By Design Capital
 
Telephone: 813-661-2201 Toll Free: 877-813-5578
Facsimile: 813-684-1463; Email: ASuccessbydesign@verizon.net

"I expect to pass through this world but once. Any good
therefore that I can do, or any kindness or abilities that I
can show to any fellow creature, let me do it now. Let me
not defer it or neglect it, for I shall not pass this way again."
....William Penn