Frequently Asked Questions
How soon can a proposal be
issued?
Normally, a proposal can be issued within a couple of hours after
receiving your information.
Is factoring a new funding option?
No, in fact, factoring or accounts receivable finnancing is one of
the oldest forms of funding. It has been around in one form or
another for more than 4,000 years. Until the mid 1980s, most people
thought accounts receivable funding was only used in the textile
and garment industries. Today, accounts receivable funding is a
widely used and viable financing solution for all types of
businesses that extend credit terms to their customers.
How can accounts receivable funding help my business?
By providing an immediate source of cash flow to your company. You
can use this cash for working capital, meet payroll, pay
taxes, replenish inventory, increase advertising, purchase
equipment, improve your credit rating, growth and more.
How is accounts receivable funding from your company different
than accounts receivable financing from a bank?
When making a funding decision, we focus on the creditworthiness of
your customers while banks will focus on your company’s financial
history and cash flow. Plus, since accounts receivable funding is
not a loan, there is no debt on your company’s balance sheet. Best
of all, we will make a quick funding decision, while banks may take
weeks—even months—to approve a loan.
Will my company be eligible for accounts receivable funding if it
has a bank loan or line ‘of credit?
If a bank has a lien on your company’s accounts receivable, you
should let us know right away. We will ask the bank to subordinate
that lien in our favor. Because this is a common occurrence, most
banks will accommodate the request, but we must know this
information in advance.
My company owes back taxes. Can I still apply for accounts
receivable funding?
Yes, Tax problems are handled on a case-by-case basis. Please let us
know immediately so that we can discuss the payoff of your back
taxes or a lien subordination with the IRS.
I have had a past bankruptcy, is accounts receivable funding still
an option?
Yes, we will still consider your application even if you have credit
problems or a past bankruptcy.
What information will you need from my company to begin the
accounts receivable funding process?
Along with the application, be sure to include your company’s most
recent accounts receivable and accounts payable aging reports,
Articles of Incorporation or DBA filing, a master customer list and
a sample invoice. For startup companies, please also submit a
business plan and projected sales forecast, and an owner/officer
history and profile.
Which customers would be good candidates for accounts
receivable funding?
Ideally, we would like to fund all of your customers. First, we need
their names, addresses, phone numbers and the amounts of credit
desired. This will save you time when submitting invoices to us.
Also, anytime you obtain new customers, fax the same information to
us, and we will check them out for you.
Can your company purchase only a portion of my company’s
invoices?
Absolutely, but remember that higher numbers of receivables
purchased on a regular basis can result in more competitive rates.
Terms can be especially flexible when there are large numbers of
invoices issued to a larger, rather than smaller, pool of your
customers.
What is the Advanced Rate?
The Advanced Rate is the percentage advanced on your invoices. For
example, you sent a $10,000.00 invoice to be factored, the factor
advances 90% of that invoice to you ($9,000.00) via wire transfer to
your bank account within 24 hours.
The additional 10% of the invoice is credited back to your account (less
the small service fee) once the invoice is paid by your customer.
Typical advances are 90% to 97% of the invoice, but the actual
Advanced Rate is based on the age of the invoice (10,30,60,90,120
Days), the financial strength and credit worthiness of your
customers and the overall merits of the transaction.
How much does it cost?
Our Factoring Fees are one of thre lowest in the Industry!
Our services are tailored to your specific business so the fees will
depend upon your specific needs. The fees are extremely
competitive.
Fees will also vary depending on the advanced rate, invoice aging,
and the total dollar amount you intend to factor on a monthly basis,
there are also volume discounts. However, specific Factoring Fees
cannot be quoted without information on your customers, invoices,
amounts you wish to factor, and your type of business.
You should know that we offer one of the lowest factoring fees in
the country. And, the fact is, we want to be your factor, so we will
be more than competitive. We will be happy to provide you with a
proposal. To GET PRE-APPROVED, please
CLICK HERE to complete our
short application.
I am currently factoring with another company, can you compare
our rates and perhaps lower are factoring fees?
As one of the lowest factoring fee factor in the industry, we should
be able to beat most other offers. If you are factoring now and
would like a factoring fee/rate comparison, please
CLICK HERE to
complete the short-form. The representative that handles your region
will contact you shortly.
How long does it take to receive the first funding?
Funding can be as fast as a few hours after we receive your signed
contract and invoices verified. The approval process from
application to funding is also simple and straightforward
and all done online. You can send your invoices to be
funded with the signed contract. After the initial funding, your
company can receive funds usually within 24 hours after
verification.
Are accounts receivable funding fees tax deducible?
Most accountants agree that accounts receivable funding fees are an
expense and should be treated as such.
Do you verify invoices with my customers?
Yes, invoice verification is an essential, and accepted part of funding. For the process to run smoothly,
your customer must be made aware that you are now working with a
factor.
What should I do if my customer mistakenly sends the payment
to my company?
This might happen, especially with the first invoice. If this
occurs, the check must be sent to us immediately. Your company
should never deposit invoice checks that were already purchased by
the factor. We also ask that you notify your customer to pay us
directly in the future.
What happens if my customer doesn’t pay the invoice?
This depends on whether your company entered into a non-recourse or
recourse agreement with the factor. In a non-recourse agreement, the
factor will absorb the credit-related loss. However, with a recourse
agreement, your company will have to reimburse the factor—either by
having the invoice deducted from the next advance or replace it with
another collectable invoice.
How can I be certain that the factor will treat my customers well?
The last thing we want is for you to lose a customer. We are not a
collection agency. We will never harass your customers for money.
Maintaining your customers’ goodwill and confidence are of utmost
importance to us.
