Accounts Receivable Factoring

Financing made for you to help your business stay ahead when your cash flow falls behind.

 

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What is Accounts Receivable Factoring and how does it work?

Accounts receivable factoring, often referred to simply as factoring, is a financial transaction where a business sells its accounts receivable (unpaid invoices) to a third-party financial institution, known as a factor. The factor then advances a certain percentage of the total invoice value to the business upfront, providing immediate cash flow.

The factor assumes responsibility for collecting payments from the customers who owe the invoices.

Flexible

weekly/daily payments

Scalable

Offers from
$5K-$300K

Dependable

over 20,000
small businesses funded

What are the advantages of getting an Accounts Receivable Factoring Loan or Funding?

  • 1

    Immediate Cash Flow Convert your accounts receivables into cash

  • 2

    Improved Working Capital Maintain healthy working capital by accelerating the collection of receivables

  • 3

    No Debt Incurred Access cash without incurring debt

  • 4

    Credit Risk Mitigation The factor assumes the credit risk of your business’s customers

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Minimum Requirements for Accounts Receivable Factoring.

Accounts Receivable Factoring is used for small to medium-sized enterprises to manage working capital effectively.

  • 6+ Months in business
  • Fair/Good credit score
  • $100k annual revenue
  • U.S. Based business locations

What could this funding be used for?

Working Capital Management

  • Day to Day Operations
  • Inventory Management

Business Expansion

  • Marketing & Sales
  • Geographic Expansion

Debt Reduction

  • Paying off outstanding debt

Research & Development

  • Innovation

Emergency Funding

  • Crisis Management

How small businesses have used Accounts Receivable Factoring Loans or Fundings.

Factor financing offers businesses a lifeline by converting outstanding invoices into immediate cash. With this infusion of capital, businesses can enhance cash flow, fuel expansion initiatives, manage seasonal fluctuations, navigate rapid growth, and mitigate credit risk.

By leveraging factor financing, businesses can unlock their full potential and propel growth without being hindered by cash flow constraints.

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FAQ’s

  • Why should my business choose Factoring Financing?
    Factoring is an advance on its accounts receivable invoices. If a business is waiting for payment on its current receivables, factoring them (selling them at a discount) can free up cash.
  • What are the requirements for factoring?
    Consistent receivables and customers are the easiest way to access receivables financing. Given it is secured by the payment of the receivables, the small business may not need to have good credit or be established.
  • What types of businesses utilize factoring?
    Businesses that sell any goods or services where its customers extend repayment terms of 30 days or greater should consider Accounts Receivable Financing. Common industries include staffing, transportation, manufacturing, distribution, technology, and logistics companies.
  • How does Factoring typically work?
    It is different from a conventional loan because it may be ongoing. The business will submit unpaid invoices for work completed and the factoring company will verify, sometimes by speaking directly to the customer, and then advance funds generally of up to 95% within a day or two.