Cash Flow that Actually Flows. It’s a Beautiful Thing.

According to *Forbes, one-third of small businesses in the U.S. have $20,000 in outstanding receivables. Fortunately, factoring can help companies access the bulk of these receivables immediately. Factoring is one of the oldest forms of business financing and is a cash-management tool of choice for many companies (especially those working in industries where long receivables are part of the business cycle).

In a typical factoring arrangement, you make a sale, deliver the product or service and generate an invoice. The factor (the funding source) buys the right to collect on that invoice by agreeing to pay you the invoice’s face value less a discount. The factor pays 75-80% of the face value immediately and forwards the remainder (less the discount) when your customer pays.

Because factors extend credit not to their clients but to their clients’ customers, they are more concerned about the end customer’s ability to pay than your financial status. This means a company with creditworthy customers may be able to factor even if it can’t qualify for a loan itself.

Factoring Facts

• Great rates. Immediate cash.

• Factoring is not a loan. It does not create a liability on the balance sheet or encumber assets. It is the sale of an asset: the invoice.

• Along with helping businesses improve their cash flow, a factor can also take over a significant portion of the accounting work for their clients, can help with credit checks, and generate financial reports to let you know where you stand.

• Factoring is very popular among businesses experiencing rapid growth.

• The factoring firm we partner with has 20 years of experience offering very competitive pricing and terms.

• Your business will typically receive 80% of an invoice right away, then the other 20% upon collection from your customer.

• For this service, a fee of approximately 1% of the outstanding invoices per month (12% per annum) is charged.

See if factoring can benefit your company. Call now (424) 835-4500 to learn more.

*Source: Forbes article: https://www.forbes.com/sites/allbusiness/2019/04/21/cash-flow-challenges-facing-small-business-owners/?sh=536905973656