FACTORING

What Factoring Is              

Factoring is the purchasing of invoices or accounts receivable. It bridges the gap between billing and collections, enabling a business to match cash flow to cash needs.

Factoring is one of the oldest forms of business financing available – a valuable business catalyst and dynamic financial tool of the free enterprise system.

Factoring addressees one of the most common reasons for business failure – inadequate cash flow. Often businesses that have healthy growth face the bittersweet problem of cash flow shortages that occur because many of the completed jobs or sold products are unpaid for 30,60, or 90 days after issuing the invoice.

 Factoring offers increased profit potential for growth-oriented companies.

Having solved the cash flow problem, the business has the working capital to fund sales, reduce debt, improve vendor relations, and focus on critical success factors – sales and production.

 WHO NEEDS FACTORING

  If your business has one or more of the qualifications listed below, you could probably benefit from financing your accounts receivable:

v     Satisfied customers  

v     Restricted bank credit

v     Low net worth

v     Inadequate working capital

v     Credit worthy customers

v     Successful products or services

v     Sales growth that exceeds financial resources

v     New in the business

  WHAT FACTORING DOES

  Factoring provides working capital, allowing you to:

 v     Expand your business

v     Purchase additional inventory

v     Take advantage of cash discounts

v     Increase advertising

v     Purchase equipment

v     Improve credit rating

v     Avoid debt without borrowing

v     Finance seasonal needs

v     Retain equity or your business

v     Obtain working capital

v     Keep fixed assets unencumbered

v     Finance larger than average orders

v     Accommodate customers’ needs for extended payment terms

v     Free yourself from restrictions imposed by term loans or conventional lines of credit

 HOW FACTORING WORKS  

 The comprehensive factoring services include:

v     The purchase of approved commercial accounts receivable at the time goods are shipping or service is completed.

v     Provision of credit checks on new and potential customers to reduce credit risks.

        v   Provision of current aging reports bi-weekly showing exact status of accounts.

v    Payment of up to 75-80% of the face value of invoices within 24 hours of delivery of invoices to us.

 Payment of remaining amount, less our fee, when invoices are paid.

We do not require long-term contracts, nor do we generally require you to factor all of your invoices each month. No loans to repay and no bankers to satisfy. You can enjoy reduced concern about the timing of your collections.  

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