What is Invoice Factoring?

Invoice factoring is the selling of your invoices to a factoring company at a discount. Also known as accounts receivable factoring, you can sell some or all of your invoices (accounts receivable) for cash versus waiting 7-120 days to be paid by your customer. Factoring will get you the working capital you need now and improve you cash flow.

A factor will typically advance 70-90% against the invoice you generate and pay you the balance less their fee (typically 1-5%) when the invoice is paid. The fee is based on how quickly your client pays the invoice. Accounts receivable factoring is a tool that you can use to:

What Factoring can do for you:

• Raise additional working capital without borrowing
• Improve the cash flow of your business
• Take discounts on your material purchases
• Finance rapid sales growth
• Pay back taxes and liens
• Outsource the credit/collection process to professionals
• Get working capital without selling part of your company

As mentioned above, you can take advantage of trade discounts with our upfront cash and accelerate your cash flow by utilizing our professional collection techniques. You can also eliminate internal collection costs, reduce accounts receivable accounting expenses and reduce bad debt expenses.

Factoring can give you financial freedom by letting you grow at your own pace. As your sales increase so does your financing since Factoring accounts receivable does not obligate other assets. We work in tandem with banks and other lenders to provide additional working capital for your business by Accelerating your cash flow and maximizing sales volume.

Who Benefits:

• Your credit score - take vendor discounts
• Your employees - never worry about making a payroll
• Your Clients - you have the cash flow to service them
• You - Cash in the bank gives you piece of mind

It is a common myth that utilizing factoring puts you in a negative light with your clients or that a factor will interfere with your relationship. The exact opposite is true. Many of the largest companies in the world utilize factoring and fortune 500 companies and government all are used to paying factors. In addition, the account rep at your factor will deal with your clients accounts payable personnel with respect and professionalism. Your Days Sales Outstanding (DSO) will probably improve just by the fact that someone verifies that your invoices are correctly in the system to be processed and paid.