FACTORING

 

Factoring Is Easy



Once you are accepted by a factor and arrive at a contract it's not hard to factor your receivables for immediate cash. The process is simple:

  • A credit limit will be established on the customers you submit for monthly invoice financing.
  • You provide the factor with the business name, address, and amount you require.
  • The factor will pull credit and place and establish an immediate borrowing limit.
  • You provide your product or service as normal.
  • You send or deliver your accounts directly to the factor.
  • Fill out a brief form in summary and figure out the amount.
  • Attach the proof of delivery you usually send to your customer.
  • The factor verifies that product was received or service performed.
  • You will get your cash from the factor.

Now that's really easy!

Just how can Invoice Financing benefit your business?

The set of benefits go on but it really comes back to Speed, Flexibility, and Better Cash Flow.

Whatever you have heard, or what their finanacial friends may have told you, you need to explore all options when it is your business on the line.

If you are like most companies, you may find that Financing is the smartest business decision you have ever before made.

Steps For Providing Invoices

1Factoring App
The first contact often starts with a phone call or online request. It allows both you and the factoring company get to know about your business. In the event your customer base and volume sound like a good match it will lead to an application and agreement. The application format differs by factor but most will request information similar to this Test Factoring Application (click the link to download in PDF format).
2Supporting Paperwork
You will need to collect supporting documentation as wanted by the factoring company. This usually includes: - Accounts Receivable Aging Reviews
- Evidence of Legal Business Organization
- Copy of Prior Year's Tax Return
- Sample Bill
3Assessment and Approval Process
As factoring is the buying of receivables rather than a loan, an approval depends heavily on the credit of your customers. The factor will evaluate the creditworthiness of each monthly bill debtor and establish credit limits for each customer basis. A public information search will be performed on your company to confirm there is clear name to the accounts receivable. This search can include current corporate status, decision making, liens, UCC, pending a lawsuit, IRS back taxes, felony records, and some other items that might get in the way with acquiring payment on the invoices.

This underwriting or research process calls for an average of 5-7 days on newly submitted accounts. A written factoring contract will be provided clarifying the terms, advance rates, fees, and recourse terms.


Once the approval process is complete it can take as little as 24-48 hours to get cash for invoices. The moment you see advertising for same day or next day funding , know they are really speaking about existing accounts where both the company and their customers have already been approved.



Your cash is wired into your bank account within twenty four hours



The factor retains the agreed cost for services.