Can’t afford to wait up to 60 days to get paid by your customers? Waiting for clients to pay can be challenging. Especially if your business is growing quickly or if you are a start-up.
Our program finances your slow-paying receivables and provides you with immediate working capital. This solution allows you to pay employees, suppliers, and grow your business.
We offer competitive receivables factoring rates, high advances, and competitive terms. For an instant quote, fill out this form. To speak with an expert, call us toll-free at (877) 300 3258.
Note: Companies that invoice more than $500,000/month should also consider sales ledger financing, a customized financing program designed for larger companies.
Already familiar with factoring? Here is the bottom line:
- Low rates: As low as 1.15% per 30 days for qualifying clients
- Pro-ration: Rates can be pro-rated for shorter/longer periods
- High advances: As high as 95% based on industry
- Short terms: Contract length is adapted to your needs
- Flexible lines: Based on your needs and projected growth
- Easy qualification: Simple requirements and easy paperwork
- Quick setup time: Usually a few days
- Quick funding: When possible, invoices funded same day
How does receivables factoring work?
Factoring works by financing your accounts receivable. We usually finance invoices in two installment payments.
The first installment is advanced to your account as soon as you invoice your client. This installment ranges from 80% to 95% of the invoice. The size of this advance depends on your industry and client profile.
Once your customer pays on their usual schedule, we settle the transaction. At settlement, we rebate the second payment to your account. The rebate covers the 5% to 20% that was not originally advanced, less the financing fee. For more information, read “How do Factoring Companies Buy Accounts Receivable?”
The cost of receivables factoring is based on three criteria. We look at the size of your expected financing line, the credit quality of your invoices, and your industry. Factoring costs average from 1.15% to 3% per 30 days.
Rates can be pro-rated to cover shorter or longer payment periods. For an instant quote, fill out this form. To speak with an expert, call us toll-free at (877) 300 3258.
High initial advances
Improves cash flow
Financing your receivables has a number of benefits, including:
- Accelerated cash flow – get your invoices paid quickly
- Your clients are professionally credit checked
- The line grows with your business
- Lets you offer payment terms with confidence
- Easy to get
- Can be deployed in days
Will factoring help you?
Only you can answer this question, as it depends on your specific situation. Factoring will help you if:
- You can’t afford to wait up to 60 days to get by paid by your clients
- You work with commercial or government clients
- Your clients have good credit
- You have decent profit margins
Qualifying is easy
Accounts receivable factoring is easy to obtain. It is designed to help small and midsized companies. The main requirement is that you do business with creditworthy customers.
Other qualification requirements include:
- Your receivables must be free of liens
- Your company must be relatively free of tax/legal problems
- Company owners must have industry experience
How to choose a factoring company?
Choosing the right factoring company is very important. You must work with a factor that is a good match for you and will help you reach your objectives.
Here are some criteria to look for:
1. What industries do they work with?
Every factoring company claims to be a generalist that can work with any company. In reality, most factoring companies have industry specialties. You get better service from a factor that has experience in your industry. They should know your clients, their nuances, and industry trends.
2. Can they provide references?
If you ask, the most factoring companies will provide you with references. If possible, ask them to provide references from companies that are similar to yours. Note that the time to ask for references is at the time of receiving a proposal.
3. Can you test drive their product?
Some factoring companies allow you to test drive their product (we do this – read here). This step helps you determine if they are the right choice for you. It also allows you to see how they treat clients first-hand. This insight is important, especially if you are looking for a lasting relationship.
4. How long have they been in business?
The factoring industry has had a lot of new entrants in recent years. Many are great companies. However, new companies haven’t had enough time to build a track record. Longevity is important because you want a factoring company with experience during good and bad times. This staying power lets you know that the company is well-managed. Ideally, you want to work with a company that has survived a recession.
5. Are their advances and rates competitive?
You want to work with a company that offers competitive advances and rates. Fortunately, the industry is competitive enough that most offers will be close to each other. However, it’s a good idea to compare a couple of factoring proposals.
6. How are they funded?
Knowing how the factoring company is funded is important, as it gives you an idea of its strength. Most companies are funded through equity (from the owners) and a line of credit from a bank. Others are funded through the family office of wealthy individuals or through venture funding. Others use re-factoring agreements – in which another factoring company provides the actual funding.
For more information, read “How to choose a factoring company.”
Need more information?
Are you evaluating accounts receivable factoring companies? We would like to help you make an educated decision. We have additional information in our financing learning center. Popular articles include: