FACTORING
To get new projects off the ground, businesses often look to outside assistance for a boost in working capital. But that assistance can come with a high-interest price tag. When you’re looking to bring in extra capital to launch your next big idea, look to factoring. Factoring gives you cash for your AR without adding to your business debt.
FACTORING
What is Factoring?
You can solve the cash flow problem by selling your invoices, contracts, purchase orders, and other accounts to a factoring firm. The firm, or factor, buys the accounts for a percentage. Then, the factor collects payment straight from your clients. Once their investment is paid back, the remaining funds go to you, minus a small factoring fee. Most clients won’t even know you’re working with a factor. Factor large contracts or group multiple accounts. The next time you want to increase working capital, simply sell open invoices. Let us put you in touch with a factor that knows your industry for the best results.
ADVANTAGES
Get cash without incurring debt.
No interest payments.
Avoid the hassle of collecting.
Eliminate the wait for slow clients.
READY TO GROW YOUR BUSINESS?
FACTORING
Options
UNEXPECTED GROWTH
You’ve just landed a great client that brings big opportunities to your company. But, you’ll need additional supplies and personnel to put your best foot forward on the project. Factoring brings in the extra cash to make it happen without affecting your company’s credit or putting debt on your balance sheet.
SLOW CUSTOMERS
Giving your customers extended time to pay their accounts can be good for relations. But, if they take too long to pay, you could be in a tight spot. In some industries, a 90-day time frame is customary. When you can’t wait months for the cash to come in, get it from a factor and avoid the hassle of collecting.
STARTUPS
Starting your own business is exciting but often stressful. Some lenders don’t want to take a risk on borrowers without a lot of experience under their belt. But, if you have clients with a strong record of regular, on-time payments, you can leverage their reliability to bring in working capital without going through a traditional lender.
READY TO WORK TOGETHER?
Let’s connect and explore financing solutions
that align with your goals.
FAQ
Q. Is factoring a loan?
No, factoring is considered the sale of an asset. You don’t have anything to pay back unless your client fails to satisfy their invoices. There’s no payment plan and no interest charges. All you will need to pay is a small factoring fee for the service.
Q. How much do factors charge?
A typical factoring fee can be anywhere from 0.5% to 5% per month that the invoice remains unpaid. Amounts vary based on the factor, time frame, and rate structure. We’ll show you the factoring fees upfront so you can make an educated decision about what’s best for your business.
Q. When is factoring a bad idea?
If you don’t have accounts receivable to sell, you won’t be able to use a factor. You also can’t use a factor for accounts that are past due. If you need working capital without AR assets, we can show you solutions like a line of credit or a term loan.
Q. How does factoring affect my financial position?
Factoring frees up capital to help you avoid late payments and negative credit reporting. So, using a factor can have positive effects on your company’s financial position. If you have questions about other ways to boost credit, we can show you the right solutions for your business.