factoring Archives • SmallBusinessLoansDepot

Factoring Invoices: Why do it?

Factoring lets business get money immediately against their Invoices. Businesses often have to wait 30 days or longer to get paid on their receivables. Factoring pays companies between 70% and 85% of the face value right away. Once it is paid, the remaining amount is paid less the fee. Apply below now!

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Help your company’s Cash flow, Expansions, New Markets, Working Capital, Advertising, New Employees, Inventory, Raw Materials, Staffing, Taxes, Equipment Acquisition…..or ANY REASON!

4 Reasons to Factor Invoices

Get up to 85% of the value of the receivable now.
Don’t want to wait to get your money? Now you don’t have to.
Improve your company’s cash flow immediately.
Use the money to begin new projects sooner. Those new projects can also be paid faster.

1 – 2 Day Approval Process. Generate more Revenue in your business!

In factoring, cash is paid against your unpaid invoices. The factor fronts your company the money today so your business does not have to wait 30 to 60 days to get paid. The charge is between 1% and 5% of the receivable. The amount depends on the strength of the company paying the debt.

Your business generates revenue by using cash, not waiting for companies to pay. Turn untapped cash in your company’s invoices into cash today. Credit requirements are easy to qualify for. Just a 1 page application and list of your company’s receivables is all that is needed to get started.

Do I Qualify for Factoring?

- Your business has invoices outstanding.
- The company paying is an established company. If so, they are likely already factor for other companies like yours.
- Amounts as low as $5,000 can qualify.

Consider our most frequent requests by callers:
“How do I get factoring?”. Callers also make other common requests.
“We need factoring” and “Tell me about factoring”. Other callers also ask, “Tell me about factoring”, and “We want information on factoring”.

How to get invoice financing.

Frequently asked questions

Why Factor?

Factoring is financing that allows a business to get most of what is owed to them on invoices within 1 or 2 days after they bill. Many businesses normally wait 30 days or longer to be paid on. This financing cuts down this time frame down to 24 hours.

Question: How much can I qualify for?

Answer: It depends on the amount of the Invoices that can be factored. A company that has $100,000 in qualified receivables often gets $75,000 to $85,000 within a day or two.

How soon can we be funded?

Once your account has been set up, invoices are normally paid within 1 to 2 days.

My business is only a few months old. Can we still qualify?

Yes. The age of your business is not important. It is on the company that is paying the invoice.

Question: How important is business and personal credit?

Answer: Personal and business credit is not important for the company that is waiting to get paid on their own invoice.

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What is Factoring?

Factoring is a form of financing which allows businesses to be paid for a product or service they have already provided to another company, but have not been paid for.

The major advantage is that it allows businesses that often have to wait up to 30 – 60 days to accelerate payment to them. They can then use the cash flow for other revenue generating purposes as opposed to basically not having access to those funds for the entire length of time they are waiting on it.

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Since most businesses business model generates significant revenue, cash is king. Cash on hand through factoring allows businesses to buy the next round of raw materials, inventory, have work in process, pay for finishing costs, pay staff or hire additional staff, pay for overtime, and deliver product. Processing the next round of product now using the cash sooner will mean they will be paid 30 – 60 days sooner for the next work in process.

Over the course of a year, this will speed up finished goods and in turn Gross receipts, by a multiple of 2 or 3. Factoring allows this speed up to occur. The cost of is often between 1% to 5%. If the cost to a business for is 3%, the additional revenues generated will typically far outweigh the cost of the financing.

How can I get Factoring?

FAQ’s

How can I factor invoices?

Consider the following example. A business has received an order for a product for $100,000 on January 1st, and delivers on January 31st. The company paying normally waits 30 days to pay the funds. If they pay on February 28th, and this cycle occurs 6 times per year, that is $600,000 in Gross Receipts. The company providing the product cannot fully or totally complete work on the next product until they receive the money. If they factor the invoice and receive $97,000 immediately, they can begin work immediately on the next product. $97,000 x 12 = $1,164,000.

Gross revenues are $564,000 higher by financing the invoices. There are other variables that affect the math but the basic concept is sound. Gross receipts can be significantly increased by factoring because the money is available much sooner to turn around product.

Studies have shown that some companies are apprehensive to engage in factoring primarily because they do not want their clients, whom they consider to be their customers, to know they have requested this type of financing. This fear is almost entirely unjustified. If any party would not want to be presented with the issue, it should the company which essentially owes the bill.

This is the company that has received a product or service, or both, from another company, has been presented with an invoice for payment by the provider of the product or service, and instead of paying immediately, waits 30 – 60 days to pay on monies owed. This company will not be surprised by a request to factor.

The company waiting to get paid that may not want their client to be presented with a financing request by them should recognize that their customer likely currently engages in factoring for the invoices of other companies, is familiar with it and consider it a regular practice.

The company that is owed the funds, therefore, may be denying themselves significant working capital for no good reason. Often the request goes directly to the Accounting department and the owners of the business are scarcely aware that a client is setting up factoring. An excellent manner in which to arrange this is to simply have your Accountant call up the Accounting department of the company your business is waiting to get paid by. If the owner of the business that has been invoiced is involved, your business can simply say that in order to accelerate cash flow, your own Accountant recommended factoring.

Don’t keep waiting on the cash flow that belongs to you!. Start factoring today and start dramatically accelerating your company’s cash flow.