What is Invoice Factoring?
 

Invoice Factoring is a financial transaction that consists of a business selling its accounts receivables (unpaid invoices) to a financial institution at a discount (fee). In return for the sale of the invoice, the finance company provides the business access to a credit limit. Funds are generally advanced directly to the business bank account electronically within 24 hours of the request. Invoice factoring is NOT a loan therefore you do not incur any debt nor make any payments!
 

What are the Features?

Factoring is very easy to qualify for because a great deal of weight is based on the strength of your customer.

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• Access $10,000 to $10,000,000 limits (up to 95% of invoice value)

• No minimums (FICOS, time in business, volume)

• No hidden fees

• Start-up businesses and sole proprietors may also apply.

• Your unpaid invoices are an asset - so why wait to get paid?

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Invoice factoring provides your business the flexibility of obtaining fast cash when you need it. You pick and choose which invoices you want to use for funding.

 

Here are a few examples of how factoring can help your business:

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• Meet payroll deadlines, pay suppliers on time

• Purchase inventory or equipment

• Expand your business (marketing fees, hire new employees, take on larger orders)

• Pay administrative fees (taxes, legal, or other fees relating to running a business)

 

Industries Served 

There are many B2B (business to business) companies that utilize factoring. Here are just a few examples:

 

• Commercial and Industrial Service Providers (welding, machinery, piping, electrical)

• Oil and Gas, Temporary Staffing, Janitorial

• Construction, Contractors, Fiber Optics, Cable, Telecommunications

• Transportation, Security Guard

• Manufacturing, Distributors (including PACA), etc...

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Qualifying Factors

 

Generally, a B2B (business to business) owner that has qualifying accounts receivables (unpaid invoices) for goods or services provided to strong customers that they have written terms with (contract, purchase order, bill of lading, etc) and have a payment history of a net 30-60-90 days.

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Pricing

Pricing will vary for invoice factoring because there many components that are factored into the equation. Generally speaking, you are looking at an (all-inclusive) average fee of 2% to 3% for 30 days.

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Here are a few factors a finance company will take into consideration

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• Strength of your customer

• Volume of invoices that you would like to factor

• Time and effort it takes to verify your invoices for payment

• Quality of the invoice supporting documentation (customer portal, contracts, etc)

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What Do I Need To Provide to Qualify?

For starters, we will ask to review your accounts receivables aging report, copy of an invoice, along with its supporting back up documentation (contract, purchase order, bill of lading, etc.)

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Call 936-777-3444 or click  here to schedule a free 15-minute consultation or click here to apply now.