Receivable factoring companies offer businesses an alternative to traditional commercial financing. Receivable factoring companies purchase open invoices and provide a large advance, giving these businesses the opportunity to secure the funding they need to expand their businesses, purchase additional raw materials, simply cover day to day operating expenses. Because this is not a loan, there is no repayment obligation nor is there any debt to record in the financial statements. Here’s how it works: Companies in need of funds contact accounts receivable factoring companies and offer open invoices in their A/R portfolio for sale. The receivable factoring company makes an offer for the advance rate and the factoring rate, if accepted, the transaction closes with the invoices being transferred to the receivable factoring company and the funds being transferred to the business. The process can take as little as 48 hours to complete, much faster than traditional bank loans and other financing products.
Factoring of Receivables
Factoring of receivables refers to the process of selling your open invoices for cash. Accounts receivable financing companies, otherwise known as factors, evaluate your invoices and assign them a value based on the creditworthiness of your customers, not your business. They will make you an offer and, if you accept, will close the transaction and forward you the money in days rather than the weeks it takes to undergo a loan approval process.
To find out how you can gain access to this fast cash flow solution call us at 1-800-405-6035 or click here to submit a rate form and one of our Business Development professionals will follow-up with you.