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?
Cash Without DebtAs opposed to banks, factoring is not a loan; it is simply the selling associated with an existing invoice. That means no additional debt to cloud up your balance sheet.
Streamlined ProcedureUnlike like loans, establishing up an account to factor invoices is not a long drawn out mess. Initial setup takes up 5-10 days and money happens within 24-48 on approved invoices
Boost ProfitsWith good planning it's possible to either save or generate profits a long way around the factoring costs. Take good thing about early repayment discounts, negotiate bulk special discounts from suppliers, increase selection for large orders, or add the staff and overhead needed to fund development.
Credit Is Certainly Not KeyYou might have a new business or the one which has been struggling a little bit recently. Factors understand that having cash on hand can be the difference between growth and keeping your doors open. In most cases, your "credit" rating would not come into play. What does indeed matter is the power of your customer paying the invoice.
Maintain ControlNo one says you what to do with your hard earned money and no-one runs your business like you. When you sell a receivable and obtain some immediate cash, you select how to spend it. Settle payments, expand your business, or buy more equipment. No person is looking over your shoulder. You do what you think helps most.
Overall flexibilityThere are no permanent contracts, minimums, or extremum numerous of today's financing programs. You can choose the invoices you want to factor. Having a good month? Only factor what you need. Going through trouble of the 12 months? Factor some more invoices for the extra cash you need.
Extend Credit Terms ConfidentlyTake good thing about professional receivable management services. Factors can help underwrite a brand new customer, skillfully deal with paperwork, and improve on time receipt of payments to save some reduce bad debt..
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
- Evidence of Legal Business Organization
- Copy of Prior Year's Tax Return
- Sample Bill
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.