Invoice Factoring in Ontario

One of the main challenges for small and mid-sized business is having to give larger companies up to 60 days to pay an invoice. This challenge can create cash flow problems for smaller businesses that can’t afford to wait for payment. Solving these problems can be difficult since most small companies can’t qualify for conventional financing.

Factoring financing is one way to solve cash flow problems created by slow-paying clients. Factoring has been gaining popularity in Ontario as a way to finance small companies that need funding to cover business expenses and to grow.

What is invoice factoring? How does it work?

Invoice factoring helps companies that cannot afford to wait up to 60 days to get paid by clients. It finances your invoices, which gives your company immediate funds you can use to pay for business expenses and to invest in new growth opportunities.

The finance company usually purchases your invoice in two installments. The first installment – the advance – can cover up to 90% of the invoice, depending on the industry. The remaining 10%, less any fees, is rebated to your company once your client pays in full. This second installment settles the transaction.

To learn more about factoring, read “How Does Factoring Work?

Can factoring help your company?

Generally, factoring can help your business if the following apply to you:

  1. You sell products or services to commercial clients on 30- to 60-day terms
  2. Your clients have good commercial credit
  3. Your cash flow problems are due to slow payments

Our solution can work in most industries as long as the transaction is between companies. The most common industries to use factoring in Ontario include transportation, staffing, and business services.

Benefits

Invoice factoring provides a number of benefits to companies, including:

  1. Relieves cash flow problems quickly
  2. Allows you to offer credit terms to clients with confidence
  3. Provides a flexible line that grows with your business
  4. Is easy to qualify for
  5. Can be obtained quickly
  6. Is available to small businesses

How much does factoring cost?

The cost of a transaction is based on the location, industry, volume, risk, and credit quality of the invoices. In Ontario, factoring discounts range from 1.5% to 3.5% per 30 days. For an instant online quote, use this form.

Does my company qualify?

To qualify for our factoring program, your company must:

  • Be a provincial company or a federal company
  • Have creditworthy commercial clients
  • Not have assets encumbered by liens (Personal Property Security Act)
  • Not have serious tax delinquencies or legal issues
  • Not have serious financial problems

Can we help you?

Are you looking for factoring in Canada? We are a leading factoring company and can provide high advances at low rates. For more information, get an online quote or call us toll-free at (877) 300 3258.

Is location important?

Generally, the location of the factoring company you choose to work with is not as important as their expertise in your industry. Ultimately, it is a matter of personal choice.

If you’d like to schedule a meeting, we can certainly accommodate you. We have offices in the Toronto – Mississauga area and are happy to drive to your office if it’s within reasonable distance.

Additional information

If you are evaluating factoring companies, consider reading “How to Select the Best Factoring Company (Ontario).”