Resources:
Factoring FAQs!
What IS Accounts Receivable Financing/Factoring?
- A cash flow tool that allows you to use your accounts receivable as an asset to ensure the growth of your business, without diluting your existing equity or incurring additional debt.
- It is also an effective way to turn your accounts receivable into immediate cash which you can use any way you wish.
How is this beneficial to my business?
- The funds can be used for any business expense such as increasing inventories, capital expenditures, taking advantage of supplier discounts, hiring additional staff, and expanding facilities.
- Accounts receivable financing frees your staff from onerous billing, collection, and administration chores while eliminating costly mailing fees.
- The factoring company will take over the backroom operations for your credit and collections departments.
- Funds secured through a reliable factoring company will enable you to ensure your business achieves the growth it needs to flourish.
Who needs factoring?
- Undercapitalized or new companies
- Growth oriented companies
- Companies that cannot get adequate bank financing
- Companies with tax problems, liens, or working through a bankruptcy
- Companies with low or negative net worth
What are the advantages of factoring over borrowing?
When you borrow, it's a challenge because. . .
- Typically a lender will secure collateral equal to a minimum of three times the loan amount
- Your flexibility is restricted
- You cannot secure additional funds without renegotiating the loan
- You must meet monthly payment obligations
- You incur additional debt further leveraging your business
Yet, when you factor it becomes a benefit because. . .
- You don’t borrow money
- There are no monthly payments
- Mailing expenses and costs associated with follow-up management on accounts are eliminated
What factoring does. . .
- Improves cash position
- Increases purchasing power
- Works to improve your credit rating
- Makes it possible to increase production and sales
- Provides professional credit checking on your customers
- Provides complete accounts receivable portfolio management
What will my customers think?
For some people this question is the most important issue. Generally, most finance companies will want the customers (or debtors) to remit directly to them. In today’s environment, where factoring is more widely known, this seldom causes a problem. However, a well managed factoring company will typically have a Non-Notification program available for those situations where it is warranted.
Either way, factoring clients should take the time to inform their customers that a change with remittance will be taking place and that it is planned. Good business people know the value of open account terms and the importance of maintaining and enhancing terms. Factoring can help to ensure that everyone is paid on time. If clients, customers, and suppliers all cooperate, it becomes a win/win where everyone benefits.
How does factoring work?
- The factoring company purchases your approved commercial accounts receivable once the goods are shipped or services are completed;
- They handle the invoices, mailing, processing, and postage at no additional cost;
- They provide timely aging reports so you always know the status of your accounts receivable at any time with on-line web reporting;
- They provide up-to-date account information, customer balances, and detailed reports via the web, as well as providing the ability to monitor delinquent accounts 24/7;
- They offer professional accounts receivable management and collection services on your factored accounts.
What kind of industries can use factoring?
Any business engaged in creating business-to-business accounts receivable needing cash flow financing of $25,000 to $3,000,000 with minimum monthly billings of $25,000.
How can factoring work for me? By providing . . .
- the most competitive rates available
- financial strength and stability
- US offices coast-to-coast, in Canada and Worldwide
- Individualized service that is professional and unparalleled
- Over 30 years experience serving small-to-medium sized businesses
- Numerous programs and flexibility to meet the specific needs of individual companies
- Funding from $25,000 to $3,000,000 per month
- Web access to your accounting records to provide "real time" reporting
Are my invoices liened as collateral?
Yes, they are. The factoring company requires first position on invoices you have submitted to their accounts receivable financing program. In some instances they may elect to work with a bank or SBA lender who is also financing the end client. In these cases, the bank must be willing to subordinate its position on the accounts receivable.
For comments from satisfied business owners, please click Testimonials!
If you are ready to apply for business financing now, call us today to discuss the details of your business needs, and let our professional staff walk you through the process to help ensure your continued success. The application process is simple, and approval can be made quickly. Checks are issued within 24 hours of factoring your receivables.
Carpe diem!
Island Connections
9030 W. Sahara Ave., #236
Las Vegas, NV. 89117
702.242.3247
CashFlowAngels@aol.com
All rights reserved © 2010
*Disclaimer
With respect to factoring, this Internet site is designed to provide accurate and authoritative information with regard to the subject matter. However, it is not a substitute for legal, accounting or other professional services.
The funding investment opportunities have not been approved or disapproved by the Securities and Exchange Commission nor has the Commission passed upon the accuracy or adequacy of these private offerings. This is not nor shall be construed as an offer to buy or sell securities. Business plans or additional details on any of these ventures are available only to accredited investors or investment professionals upon registering with the network and use of private access password. Neither Island Connections, its management or affiliates make any representation or warranty, expressed or implied, as to the accuracy of the information contained within the business plans either orally or written. The aforementioned parties expressly disclaim any and all liability resulting from the use of such information which is subject to errors or omissions including legal, financial or otherwise. Financial projections are assumptions based on a variety of factors which may not prove to be correct. Prospective investors should carefully review and consider the risk factors on any venture prior to making an investment. Venture capital is considered high risk without any guarantees of financial return and should only be done under the guidance of your own professional advisors. No guarantees are provided for funding services.