If your business's cash flow is tied up in receivables, you need to
establish a relationship with a factoring company.
This is where we come in, with our experience we make the task of finding a
factor easy, we gather most of the information that the factor will require up
front thereby saving you time. Once we have gathered the information from you,
we pass it on to the companies that deal in your type of receivable. .
There are many different ways to structure a factoring agreement, because receivables are always changing, factors are flexible as to how they structure their arrangements.
Factoring is not a loan, but rather the outright selling of your receivable to a company for a discount. The discount rate varies from company to company and may also depend on the credit worthiness of the customer whose receivable you sell.
The discount rate is usually between 2 and 15%.
As an example if you sell a $10,000.00 receivable at a 5% discount, you can expect to receive $9,500.00. As that old saying goes "A bird in the hand is worth two in the bush".
Many times factoring can solve a company's money crunch and take away some of the risk with carrying back for your customers.
To get started you will need some documentation.
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