Invoice Financing

What are accounts receivable? When a business provides a product or service to another business and when the product has been shipped or the service has been completed, an invoice is created and forwarded to the company that purchased the product or service. The outstanding invoice due to be paid is an accounts receivable.

Factoring is the sale of a business’s accounts receivable. The transaction is very simple and straightforward to understand. When a business factors its receivables, they are receiving a predetermined percentage of the face value of the receivable upon invoicing their customer. When the receivable (invoice) is paid, the factor deducts their fees from the payment and then releases the remainder to the payment back to your business.

Why companies use Factoring or seek Accounts Receivable Financing. The simple answer is cash flow. A large percentage of businesses do not have the financial wherewithal (cash in hand) to wait 30, 60 or 90 days to receive payment. An undercapitalized company that is in a rapid growth mode is prone to failing if the company cannot meet the basic cash demands for the business. The factoring of accounts receivable and invoice factoring gives a business immediate access to cash.

Pricing and Financing Structure: Like most financial transactions, accounts receivable factoring and invoice factoring transactions are priced on a case by case basis. Variances such as the quality of the customer base, industry type and transactional size will play a role in quoting price.

Our typical clients include:

• Short time in business.
• Have some operating losses.
• Companies with Cash Flow issues.
• Rapidly growing companies.
• Companies in need of quick financing.
• Have some personal credit issues or bad credit.
• Have been turned down by bank(s) for bank financing.
• Have SBA loans that are not large enough to support growth.
• Financial ratios not in-line for traditional line of credit.
• Are currently with finance or factoring company.

Business owners have told us that we have allowed them to spend less time worrying about back-office issues and more time focusing on the core business issues. For us, it is a great compliment because it means the service we provide is making a difference and making a business owners life a little easier. Maybe we can help you.