Funding Process of Factoring Receivables

Open a factoring account
If your factoring account has not been established yet, you can get started by opening an account. It normally takes 5 to 7 business days to open your account and begin Factoring. Once your account is open you will be able to receive funding for your receivables within 1 business day.

An invoice is created
Your business has delivered products or services to another business or government. Your business has the option to use factoring and receive immediate funding for this invoice.

Send in the invoice for Factoring.
After an account has been established you may fax any new or outstanding invoices to the Factor that you wish to receive funding for. There is no minimum or maximum sized invoice. You may factor as much or as little of your receivables as you want. Use this service at your discretion.

Note: Invoices do not need to be sent in for factoring the day they are created. You can hold on to your invoices a few weeks to lower your factoring fees. The factoring fees do not begin until you have sold the invoice to the Factor.

Example: Customer ABC usually pays on 30 day terms, however your business needs the fund in 15 days. You can hold on to the invoice for 14 days before you send it to the Factor. This way you pay only 16 days worth of factoring fees instead of 30 (cutting your factoring costs in half).

Due Diligence.
Once the Factor receives the invoice from you, due diligence is exercised. The Factor analyzes your customer's (the account debtor) credit status and ability to pay the invoice when it is due. This is a one time process per customer and usually takes less than 24 hours. The advance funding amount and fee schedule is determined from the financial strength of your customer.

Funding Advance
When the due diligence process is completed your business will receive an immediate advance payment wired to your business bank account. The advance is usually between 70% and 90% of the original invoice amount. You are free to spend this money however you want, its yours!

Collection
The Factor does the administrative work of eventually collecting payment on the invoice. A notice is sent to the account debtor instructing them to send payment to the Factor at the time the invoice is due.

Final Funding
When the Factor receives payment in full from the account debtor, your business will receive the remainder of your advance payment minus the Factor's fee (the discount rate).

Asset Based Lending is when a line of credit is established for a business. The amount available is based on all of the combined assets of the company. Assets may include accounts receivable, inventory, real estate, and office equipment. Our minimum for this financing is $750,000.