Factoring

Factoring

Frequently Asked Questions

What is factoring?
Factoring is the purchase of accounts receivables for cash. Factoring gives businesses the power to ensure growth without diluting equity or incurring debt.

 

How does factoring benefit my company?
Factoring can be extremely beneficial to your company when managed properly. Some of the benefits of factoring may include the ability to expand sales, or the purchase inventory or raw materials in bulk. Your company avoids such expenses as mailing costs, costs associated with collection and dunning, losses on bad debts, and much more. Your Factor, in essence, becomes your credit department!

 

What types of businesses should use factoring?
A wide variety of industries can benefit from factoring. The trucking industry, high tech industries, temp agencies, printers, and manufacturers of all types, just to name a few, are perfect candidates. Of course, any sales and distribution, as well as many service industries could benefit as well. For the most part, we are talking about any business that sells a product or service to other companies on net 30 to 60 day terms.

 

Do I have to factor all of my invoices?
No, you have the option to factor whichever invoices you like. You're in control!

 

What size clients do you serve?
We'll serve practically any size business. Typically, we service clients with a factoring volume of anywhere from $10,000 to $25 million per month!

 

Are there any restrictions?
There are no restrictions based on the location of your business or the location of your customers.

 

Will you purchase every invoice I send?
We will attempt to purchase as many as possible.

 

What do recourse and non-recourse mean?
When an invoice is factored on a non-recourse basis, the factor incurs the loss if the reason for non-payment is attributed to credit failure or insolvency. Recourse basis means that if for any reason the purchased invoice is not paid within a specified time frame, you would buy it back.  We offer both recourse and non-recourse. 

 

When do I get the money?
Normally, within 24 hours!

 

Is a first lien required?
Yes.

 

Are additional forms of collateral required?
Depending on the program, a personal guarantee by the persons responsible for the ownership of the company is required most of the time.

 

Can a start-up business use factoring?
We will work with start-up companies, companies that are growing, companies that are not currently profitable and even companies with special situations, such as tax arrears, lawsuits, judgments, or bankruptcy.

 

How much does it cost?
First of all, there are NO up-front fees! You will receive an advance of 80% to 95% of the value of the invoice within 24 hours. Then depending on the volume and the number of days that the invoice remains outstanding, your actual fee will be between 1.9% and 7%. The fee is comparable to credit card merchant fees.

 

How long does the process take?
It takes approximately four to ten working days to process your application and to fund a new account with all the necessary information. Thereafter 24-48 hours.

You are welcome to call me with your questions

at 580-695-0331 or email me at 

financingusa@yahoo.com

Download and print our applications

 

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