Having trouble getting a loan for your business? Consider factoring your account receivables instead. For many small businesses, factoring receivables provides a way to turn non-liquid assets such as invoices into instant financing without incurring debt or damaging credit.

Universal Funding, a receivables factor, can provide you with a cash advance based on a percentage of the total value of the invoices that you provide as collateral. Once your client pays the invoice, you would receive the remaining value, minus a small factoring fee.

Getting advanced financing for your invoices might be the right step for your business to take. In this new business era, factoring invoices can help your revenue multiply by removing the lag time of getting paid for the services you have rendered.

For more information or to have one of our factoring specialist contact you, please fill out a rate form.

Your company’s accounts receivable are considered to be a type of asset, and as such can be sold as collateral.

Some companies sell their accounts receivable to a factor at a discount. This allows the company to focus on the core of their business with a new surge of cash through factoring. The factor can purchase the accounts receivables with recourse and non-recourse terms. Click here to read more in-depth about the varying terms.

Selling accounts receivable at a discount is a great way to inject some much needed capital into your business whether you need to finance your payroll, pay for services or equipment, or even build venture capital to grow your company. It is especially attractive to businesses that cannot, due to a poor credit rating or a host of other reasons, get traditional loans. Even if you have a good credit past, you may simply be a victim of the times as the turbulent economy has made many banks much less willing to lend money.

Contact us today at 1-800-405-6035 to speak with one of our factoring specialists or get started with your risk free quote.

Debt factoring is the sale of a business’ invoices to a third party. The third party, or the receivable factor, is charged with processing the invoices, and the business selling the invoices is able to receive funds based on the expected payments on the invoices. Debt factoring is also known as the selling of account receivables.

There are many advantages to debt factoring. First, debt factoring provides a business with immediate cash flow for the accounts receivable of the customer. This facilitates smooth growth. Debt factoring also enables the business to reduce the time frame for its cash cycle, thus being able to purchase goods and sell them to make profit.  An added bonus to the selling of account receivables is that it helps protect the business from bad debts, especially when using non-recourse factoring. Finally, invoice or debt factoring offers a method of being paid right away on invoices that would normally take 30 to 90 days to pay otherwise.

Considering these advantages of selling account receivables, debt or invoice factoring is a wise solution for fast cash flow solutions.

To learn more, please go to our Get Rate page.

Many small and medium sized businesses may not be familiar with the term ‘factoring’. Big business has been using this little known financial instrument for decades, but only recently have some financial institutions begun to offer Invoice Factoring to small and medium businesses.

Basically, a financial entity like Universal Funding Corporation funds your accounts receivable for a pre-determined rate. This is not a loan, and no debt is entered on your company’s balance sheet. The credit of your customers is the primary concern of the factoring company.

Factoring solutions, including receivables factoring is a fairly new phenomena in small and medium sized businesses. They are just not used to the idea of AR funding. This type of system allows your cash flow to be much more fluid; instead of waiting 30 – 90 days for invoices to be paid, with accounts receivable factoring you get your money up front.

The rates are determined through a diverse set of variables; this will depend on volume of sales, the invoiced customer’s credit history and payment schedule with you. There are other factors involved with account factoring as well, but term rates are generally low.  Factoring also allows companies to take advantage of early-pay discounts often offsetting the cost of factoring in full while still allowing for a company to increase sales and grow.

For custom factoring solutions, factoring help and understanding how this tool can work to grow your company through accounts receivable funding, please go to our get rate page.

How fast can our factoring company fund your invoice? Typically within 24 hours. Factoring invoices is the fastest you can get standard commercial financing.  The application can be completed in as little as a few minutes. Within hours, a proposal offer is sent to you.

Once your factoring account is set up, getting an advance on each invoice can usually take anywhere from a few hours to the next day. So after submitting an invoice from a completed job, we fund you within 24 hours. As a tool for growth invoice factoring is very easy to set up and quick to deliver.

Universal Funding is a financial services company that provides personalized capital funding programs (invoice factoring, accounts receivable financing) to meet your cash flow needs. With over 65 years of combined experience our team has the expert knowledge to help your business grow and succeed.

Universal Funding is a stand-alone financial entity. All principals are on site, on staff and manage all facets of our daily operations. Working shoulder-to-shoulder with our management team, account associates and customer service agents ensures direct interaction with our clients. We want you to know exactly who we are and how we do business. In turn, we’d like to get to know you and how we can best fulfill your business needs.

Contact us at 800.856.7014 or email us at sales@universalfunding.com to get started.

To learn more, please go to our Get Rate page.

Non-Recourse Factoring is a type of factoring where the factor assumes the responsibility if the invoice does not get paid. This has many benefits:

The Debt is Assumed by the Factor

After you sell an invoice to a factor and it’s approved, a factor takes on the risk of non-payment.  If your customer fails to pay you will not be required to refund the advance back to the factor.

You can Eliminate Bad Debt

Non-recourse factoring will provide a greater amount of money received at the time of invoicing (also instead of waiting up to 90 days to being paid) and the factor assumes all of the credit risk.

Allows You to Do What You Do Best

Since non-recourse factoring transfers the risk of non-payment to a factor, this means you do not have to worry about being paid.  Non-recourse factoring allows you to move on to the next order or project and focus on doing what you do best – provide quality products or services to your customer!

Reduces Stress

Along with the previously mentioned benefits, non-recourse factoring can reduce or eliminate the stress that comes from collecting from customers and running a business.  You will have the peace of mind that whatever happens, your business will still be in good financial health.

To learn more, please go to our Get Rate page.

There are two types of invoice factoring; recourse factoring and non-recourse factoring.

In recourse invoice factoring if the customer doesn’t pay their invoice after an agreed amount of time, you will be responsible to buy back your invoice from the factor. However, if you regularly submit invoices for funding, the factor will usually offset the debt against other credit worthy invoices. The benefit of recourse factoring is that the cost is typically lower and more desirable than non-recourse factoring because the factor is not assuming the risk.

In non-recourse factoring, there are two options. In the first, you have liability related to the factored invoice based on the insolvency of your customer. If your customer doesn’t pay the invoice due to bankruptcy during the agreed amount of time, then you do not have to pay back the advance you received.

In the second option, the factor assumes the entire credit risk. If your customer doesn’t pay their invoice due to any credit reason where they do not file bankruptcy, the factor will assume the entire debt, even if it becomes uncollectable.

Non-recourse invoice factoring is usually more expensive than recourse invoice factoring.

To learn more, please go to our Get Rate page.

One of the differences between a line of credit with a bank and invoice factoring is the time it takes to keep up with the financing. A “borrowing certificate” is required when using a bank to borrow against your receivables.  It can be required every time you ask for an advance, or periodically during the financial relationship.  You must complete a form and certify the true value of your company assets, which then must be approved by the bank lender.

Additionally, banks and asset based lenders will require quarterly audits paid for by you, where a team of auditors come into your offices and audit your books.

With invoice factoring, however, all you need to submit is a legitimate, verifiable invoice to receive your advance. The availability grows exponentially with the size and scope of the incoming invoices without having to prove the overall financial condition of the company.

Additionally, receivables financing does not require an in-house audit. You can avoid the time and cost of producing one. Thus, factoring your accounts receivables is a simple to use, easy to access type of financing for a growing business.

sales@universalfunding.com

(800-405-6035)

To learn more, please go to our Get Rate page.

How Invoice Factoring Works

Invoice factoring is a financial transaction involving three parties: the one who sells the receivable (the business owed the financial asset), the debtor (the customer of the seller), and the factor.  The factor is the third party who buys the invoice or financial asset from the seller at a discount. The seller benefits because they get their invoice paid early, while the factor benefits by profiting from the discounted invoice.

The sale of the invoices essentially transfers their ownership to the factor, and all rights associated with it. This means that the factor obtains the right to receive payments made by the debtor and they must sometimes bear the loss if the debtor defaults on the invoice (in non-recourse factoring). In recourse factoring, the factor has the right to take action against the seller if the debtor hasn’t paid their invoice in a specified amount of time. In the event of non-payment by the customer, the seller must buy back the invoice with another credit worthy invoice.

Usually the debtor is notified when this financial transaction has taken place; but it can occur without the debtor’s notification.

Why Invoice Factoring?

Many businesses cash flow varies. It might be large in one period while lacking in another. Because of this, businesses find it necessary to both maintain cash on hand and to use such methods as invoice factoring to enable them to cover their short term cash needs in times of lacking finances.

Depending on the business’s cash flow needs, they may need a resource to obtain money. Invoice factoring provides this resource.

How is this Different from a Bank Loan?

In a loan, the bank typically looks at the credit worthiness of the business asking for the loan. In the case of invoice factoring, the factors make funds available based on the credit worthiness of the debtor, the party that owes the invoice balance.

Invoice factoring is a financial transaction involving three parties: the debtor, the seller and the factor. It is essentially a sale of the debtor’s invoice balance owed to the seller, sold to the factor at a discounted price. Both parties benefit. The factor profits on the balance discount while the seller profits by receiving the payment. While this is different from a bank loan, it is a common practice of many large and small businesses and corporations.

To learn more, please go to our Get Rate page.

Invoice factoring has been around, in some form or another, for centuries. It’s one of most tried and true forms of business financing out there.

Like all things in this day and age, technology has impacted the evolution of factoring. Businesses have begun to sprout up offering online auctions for a company’s receivables, where a business owner can post an invoice and have random investors buy it for a discount.

In theory that means an easy way to generate quick cash flow on an as-needed basis. Plenty of companies have tried these online factoring services, but some problems are beginning to surface. Problems that don’t happen when using a factor like Universal Funding.

When using an online auction-type factor, you never know who is buying your invoice. In fact, one invoice could be split between more than one investor. That may not seem like much a problem… until you consider that each invoice will be verified by the investor who buys it. That means your customers will be the ones bombarded with calls attempting to make sure the invoice is genuine. Do you want your customers dealing with the inconvenience and frustrations of that? That’s especially true if you do repeat business with the same customer over a long period of time. That customer is going to get awfully sick of fielding phone calls from different people every time you invoice them!

By factoring with Universal Funding, you still get a great rate and you get your cash just as fast. Plus, you always work with the same person and you know who is buying your invoices and can rest assured you and your customers will be treated with complete respect.

Unlike the auction sites, we are not a one-shot wonder factor. We build relationships with our clients and debtors and help businesses grow. We believe in and have adapted the latest technologies into our business, but one thing we’ll never stop doing is partnering with our clients and investing ourselves personally into their growth and success.

As our industry evolves, you can be sure our commitment to you and your business never changes.