Accounts Receivable Factoring


F.A.Q

What is factoring?

 Factoring is a tool used by businesses to increase their cash flow without the use of debt. By
selling it’s invoices to a factoring company, a business can obtain the necessary cash flow to
meet payroll or pay for expenses while still selling to it’s customers on terms. This tool is used
 by businesses regardless the volume of sales they might have. It is used by businesses that
 provide services or sell goods that have been established for some time or have just started
operating. Factoring has been around for hundreds of years and is used by businesses in
almost every type of industry
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How can factoring benefit my company?

Our factoring service will save your business time and money by improving cash flow, assisting
 with payment collection and providing the cash needed to grow. Motor carriers: Use our funds
 for fuel advances and pay drivers. Staffing companies: Use our funds for payroll. Manufacturers
 and wholesalers: Use our funds to pay factories, buy inventory, and cover payroll while we wait
 for your customer(s) to pay us.
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Is there a limit on how much I can factor?

The beauty of this service is that there is no limit. The more a business sells, the more money
 will be made available. As long as the customers are financially strong, we can make available
 those funds. ____________________________________________________________
How do I get started and how long does it take to get funded?

We do not fool around. We know time is money and won’t delay our proposal to you. In most
 cases, we can start providing funds in a week after the first contact is made. ________________________________________________________________________
Do I have to factor all my invoices?

No, you don’t. But think about it, you want to factor the invoices that are really going to provide
 the cash flow you need.
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What happens if I sell you an invoice that my customer fails to pay?

If your customer fails to pay a factored invoice within a prescribed number of days, 90 days, you
 are responsible to “repurchase” the invoice. The idea is to factor those invoices from your best
customers, those are the ones that will provide you the bulk of your cash flow.
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What happens if you receive a payment from my customer that
relates to an invoice I did not factor?

This is a situation contemplated in our agreement. If this happens, we give you your money
back without a fee.
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How do I keep track of invoices I have factored and
 payments you receive from my customers?

You can request, during business hours a statement report.
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Do I need to tell my customers I'm factoring?

And what will they think when they find out? Yes, all that will be asked of them is to remit
 payments to us now.
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How will my customers know that they are supposed to remit payments to you?

We mail a letter to your customer. This letter explains to them that we have established a
 relationship to better serve them and that payments should be remitted to us. ________________________________________________________________________
 Am I eligible to factor if a UCC is filed against my company?

Factoring companies are often able to fund against your existing accounts receivable even
if a UCC is filed before ours. Often, we are able to obtain a subordination agreement from
 other lien holders. In many cases, we can get consent from your lender or bank that will
 allow you to factor your accounts receivable with us. Don’t let a previous UCC lien stop
you from contacting us, it can still be done!!
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Do you provide loans?

We do not provide loans but we do have affiliates that do. We also have affiliates who provide
Purchase Order funding. Contact us to structure the whole operation.
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Can you provide a sample factoring transaction?

Although rates and fees may vary, this would be a typical factoring transaction; it applies
for both goods and services invoices: We have agreed to purchase invoices for customers
 A, B and C. We have determined a fee of 0.83% for every 10 days at an advance rate of
80%. Let’s say you have a $1.000 invoice for customer C on net 30 terms. That means we
 will advance $800 upon confirmation verification from customer C. Upon our receipt of
 payment from customer C, we will disburse to you $200 minus our factoring fee of $25.
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