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Factoring Financing - Program Details
Facing a problem because your clients pay in 30 to 60 days? Need to get paid sooner? Most new and growing businesses can't afford to wait up 60 days to get paid. There are supplier and payroll commitments that must be met. But often, securing the funds to meet these obligations is difficult.
Factoring can provide you with the funds to pay employees and suppliers. It provides predictable cash flow, helping you manage and grow your company. It can benefit you if:
Your are growing quickly
You have been close to missing payroll
You have delayed paying critical suppliers
Your clients take up to 60 days to pay their invoices
Factoring rates as low as 1.5%. Advances as high as 90%.
(subject to monthly volume and industry).
How does factoring work?
Factoring provides you an advance on your invoices, giving you the funds to cover business expenses. The financing transaction is settled once your client pays. It works like this:
- You deliver product or service to your client
- You generate an invoice
- The factoring company advances you 80% of the invoice. The remaining 20% is held in reserve. Note that certain industries can qualify for higher advances
- Once your client pays the invoice, you get the remaining 20% , less a small financing fee.
How does factoring benefit my company?
There are are number of benefits to factoring your invoices. They include
- Increased liquidity and streamlined cash flow
- Flexible financing that grows directly with your sales
- Quick turnaround times
Factoring is easy to obtain. Since the factoring company uses your invoices as collateral, the most important prerequisite is that you do business with reliable and reputable customers. It is ideal for startups and growing companies that can't obtain bank financing
Industries that benefit from factoring
- Transportation
- Telecommunications
- Cable installers
- Janitorial services
- Staffing agencies
- Security agencies
- Distributors and resellers
- Oil and gas industry
- Construction
- Medical providers
- Business and industrial services
- Manufacturing companies
- Wholesalers
- Government contractors
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