Money fuels business. When cash flow stalls, it compromises your ability to run your company. How many times have you put aside bills, lost sleep over payroll, or couldn’t pay suppliers when they asked for payment? There is a time during each month, for all growing businesses, when outstanding receivables are keeping you grounded. If only you could get paid today on work you completed, your business would take off.
The process is called Accounts Receivable Financing, and in the simplest terms, it means our affiliates can advance you up to 80% of the invoice amount immediately, and give you the remaining balance when your clients settle in full. Invoices can be submitted for financing directly upon completion of work or product delivery, or up to 50 days after your invoice is due. Revenue flows directly and instantly to you - no delays! No collection hassles! We can often assume all credit risk and responsibility for client payment. In return, we receive a small fee at the end of the process. Set-up time can be as little as 2 or 3 business days and you’re not locked into a long-term contract. We allow you the flexibility to finance only when you need it, and as often as you like. We base our approval decisions on your customers ability to pay, and not the credit of your business. This is not a loan, so there is no need to make payments or create debt to your business.
▪ Improve Cash Flow Without Creating Debt
▪ Customer Credit Services
▪ Accounts Receivable Management
Our application and checklist is provided in PDF format for easy viewing, printing or downloading.
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Our application review process can begin with as little as three items from our checklist:
1. The application
2. A current accounts receivable aging report
3. A customer list with addresses and phone numbers
We will not contact your customers, however we will provide you with a written proposal outlining our terms for your account in no more than two - three business days.
After you have completed the application, please mail or fax it toll free to our office: 1-866-798-2FAX (2329)
What Industries Qualify for Accounts Receivables Financing?
Every industry is evaluated differently because no industry invoices the same method. Not all factoring companies accept every industry. As a rule of thumb, your business must sell to a good credit worthy account debtor (customer), a receivable or invoice that can be verified or has an acceptance (signed off) by the account debtor. Receivable financing is available to all industries that provide services, or deliver products to commercial accounts. The sale must be a "final sale" with no contingencies or disputes. The service or product must be completely delivered in order for an invoice (receivable) to be eligible for funding.
Banks v/s full service Accounts Receivable Finance Specialists
real question is, “What do you get from a modern-day full-service
factoring company that you don’t get at a bank?”
1. A receivable specialist. With a factoring company, you are getting a specialist. If you needed a heart transplant, would you go to doctor that specializes in skin disease? Probably not. You would seek out a cardiovascular surgeon. Why, because the cardiovascular surgeon is specially trained in heart transplants and has lots of experience. Same goes for a factoring company. Factoring companies are accounts receivable specialists. They are comfortable advancing you funds against your accounts receivable.
2. Speed, Simplicity, and Efficiency. The first thing you will notice when applying for factoring with a factoring company is how quickly you are set up and funded. You will not be asked for piles and piles of paperwork. Remember, a true factoring company is only really concerned only with the credit strength of your customer(s). Therefore, you will likely not be asked for your own financial statements, tax returns, profit and loss statements, or bank statements. In fact, you don’t even have to have good credit. Your customers must have good credit. Your factoring company will check out your customer’s credit for you and advise you what credit limits are appropriate given their financial strength. Your factoring company should be able to get you set up and funded within three to five business days.
A good factoring company will limit your exposure to poor credit risks and allow you virtually unlimited credit for the strongest accounts. Most factoring companies have no overall limit for you as a client. You are eligible for as much money as your eligible accounts warrant.
Banks like to make their decisions based on your credit and therefore applying is slow, tedious and unpredictable. If your credit is not perfect, you may not qualify. If your balance sheet is not strong, you may not qualify. If you are not profitable, you may not qualify. If you are in an industry the bank finds too risky, you may not qualify. It takes time for banks to dig around and identify all the risks. In other words, be patient and don’t wait for the last minute to apply.
Banks tend to set arbitrarily low or high credit limits for your accounts based not on the credit strength of your customer(s), but on your own credit strength or on the strength of additional collateral the bank may require you to pledge. Credit limits set too low restrict how much business you may do with your customer(s). Credit limits set too high expose you to unwarranted risk.
3. Collection Expertise. A full-service factoring company will supply you with your own collection specialist. This individual will act very much like an extension to your company. Your collection specialist will obtain and maintain a status of your customers’ payments once they become past due. You may call your collection specialist and ask him or her to make collection calls for you and report back to you of their progress. Banks typically offer no collection assistance much less your own personalized collection specialist.
4. Flexibility. Banks have loan committees, executive loan committees, in-house limits, regulatory limits, auditors, and bank regulators. Everyone wants to have a say. They must all be satisfied that your factoring transaction fits within the bank’s and regulator’s definition of “acceptable risk”. Your factoring company is not subject to regulatory oversight. A factoring company makes decisions it deems appropriate. A factoring company is motivated to buy your invoices. As a result, increases are automatic. No approval authority is needed by a loan committee. Decisions are made same day in most cases and some factoring companies will allow you to factor as many or few accounts, as many or few invoices as you desire.
Most banks will require a senior secured position in all your assets as security. Likely, they will limit your outstanding balance equal to only a fraction of the collateral value. If you need additional funds and wish to refinance or sell some of your equipment to raise cash, you are at the bank’s mercy to release its security interest in the equipment. Likely, the bank will require you to pay them some of the proceeds of any such refinance or sale. Most factoring companies will require only a pledge of your receivables, leaving you the flexibility to finance your other assets elsewhere. Most banks will require you to maintain your operating (checking) account at the bank. This gives the bank additional leverage over your company’s finances. Factoring companies will allow you to maintain your checking account where ever you wish. Your factoring company will wire your advances into any accounts you direct them.
The factoring company is an accounts receivable specialist. If your goal is maximizing flexibility, funds availability, credit protection, and cash flow, you need an accounts receivable specialist. Your full-service factoring company is waiting to help you.
Our team is dedicated to learning about your unique situation, and tailoring your lump sum payment to meet your needs. Our access to funds will ensure that you get access to your future funds with the cash you deserve. We want you to feel confident and comfortable in working with us.