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Factoring Benefits
Is Factoring
For You
How Factoring Works
On-Line Factoring Request Form
Factoring Home Page
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We Can Offer You What Others Can't
How Factoring Works
The First Step:
The Client profile
You begin by filling out a simple client profile, which we will provide you. Please click here for profile. This
profile will cover basics such as your company's name and address, the
nature of your business, and information about your customers.
You may need to supply an accounts receivable aging report, existing
customers' credot limits, or other related documents. Remember the
factor will attempt to determine the creditworthiness of your customers
independent of their credit history with your business. We want a
broader view of their overall credit status.
During this initial stage you will also cover basic financial
arrangements with the factor. For instance, what will be the monthly
volume of invoices you want to factor(i.e. how liquid do you need to
be)? What will the advance rate and the discount rate be? How quickly
will the factor issue the advance to you?
In most cases, the answers to these questions will vary depending on
the financial strength of your customer(s) and the anticipated monthly
sales volume to be factored. Variations between industries, length of
time in operation, and general reputation of how risky a customer of
yours may be. For instance, a long list of high-risk clients will cost
you more in factoring fees than a short list of government agencies
with a slow-pay history.
In the factoring business, volume is all important. The higher your
volume(the dollar amount of invoices you factor), the more favorable
your rates will be.
The factor will use the client profile you submit to determine if your
business is suitable for factoring. This process is simply the factor
analyzing the risks versus the rewards, using the information you
provided.
Once approved, you can expect to negotiate terms and conditions. The
negotiation process takes several aspects of the deal into
consideration. For instance, if you want to factor $10,000, you can't
expect as good a deal as a company that wants to factor $500,000.
During the negotiation process, you will become well aware of what it
costs to factor your accounts receivable. After you reach an agreement
with the factor, the funding wheels begin to roll. The factor conducts
due diligence by researching your customers' credit and any liens
placed against your company. The factor also confirms the legitimacy of
your invoice before buying your receivables and advancing cash to you
To find out how we might structure
a factoring deal for you, please complete our
On-Line Factoring Request Form
To
learn more,
Please contact
one of our
regional offices
at
866-593-2195
admin@factormoney.com
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