FAQs
How soon can you issue a factoring proposal to my fashion
company?
A proposal for fashion factoring and/or
purchase order financing can be issued very quickly (usually within 1
hour) after receiving your information.
Is accounts receivable
funding a new financing option?
No. Accounts receivable funding
is one of the oldest forms of financing. It has been around in one form
or another for more than 4,000 years. Until the mid 1980s, most people
thought accounts receivable funding was only used in the textile and
garment industries. Today, accounts receivable funding is a widely used
and viable financing solution for all types of businesses that extend
credit terms to their customers.
How can accounts
receivable funding help my business?
By providing an
immediate source of cash flow for your company. You can use this cash to
provide working capital, meet payroll, pay taxes, replenish inventory,
increase advertising, purchase equipment, improve your credit rating,
and more.
How is accounts receivable funding from your
company different
than accounts receivable financing from a bank?
When making a funding decision, we focus on the creditworthiness of
your customers while banks will focus on your company’s financial
history and cash flow. Plus, since accounts receivable funding is not a
loan, there is no debt on your company’s balance sheet. Best of all, we
will make a quick funding decision, while banks may take weeks—even
months—to approve a loan.
Will my company be eligible for
accounts receivable funding if it
has a bank loan or line ‘of credit?
If a bank has a lien on your company’s accounts receivable, you
should let us know right away. We will ask the bank to subordinate that
lien in our favor. Because this is a common occurrence, most banks will
accommodate the request, but we must know this information in advance.
My company owes back taxes. Can I still apply for accounts
receivable funding?
Yes, Tax problems are handled on a
case-by-case basis. Please let us know immediately so that we can
discuss the payoff of your back taxes or a lien subordination with the
IRS.
I have had a past bankruptcy, is accounts receivable
funding still
an option?
Yes, we will still consider
your application even if you have credit problems or a past bankruptcy.
What information will you need from my company to begin the
accounts receivable funding process?
Along with the
application, be sure to include your company’s most recent accounts
receivable and accounts payable aging reports, Articles of Incorporation
or DBA filing, a master customer list and a sample invoice. For startup
companies, please also submit a business plan and projected sales
forecast, and an owner/officer history and profile.
Which
customers would be good candidates for accounts
receivable funding?
Ideally, we would like to fund all of your customers. First, we need
their names, addresses, phone numbers and the amounts of credit desired.
This will save you time when submitting invoices to us. Also, anytime
you obtain new customers, fax the same information to us, and we will
check them out for you.
Can your company purchase only a
portion of my company’s
invoices?
Absolutely, but
remember that higher numbers of receivables purchased on a regular basis
can result in more competitive rates. Terms can be especially flexible
when there are large numbers of invoices issued to a larger, rather than
smaller, pool of your customers.
What is the Advanced
Rate? (As high as 95%)
The Advanced Rate is the
percentage advanced on your invoices. For example, you sent a $10,000.00
invoice to be factored, the factor advances 90% of that invoice to you
($9,000.00) via wire transfer to your bank account within 24 hours.
The additional 10% of the invoice is sent to you by the factor (less
service fee) once the invoice is paid by your customer.
Typical
advances are 90% to 92% of the invoice, but the actual Advanced Rate (as
high as 95%) is based on the age of the invoice (10,30,60,90,120 Days),
the financial strength and credit worthiness of your customers.
How much does it cost?
Our Factoring Fees are
one of thre lowest in the Industry!
GREAT FACTORING RATES -
CLICK FOR A QUICK QUOTE
Our services are tailored to your specific business so the fees will
depend upon your specific needs. There are two types of fee. The first
is the cost of the money you use, which is extremely competitive. The
second is a service fee, which encompasses the collections service.
Fees will also vary depending on the advanced rate, invoice aging,
and the total dollar amount you intend to factor on a monthly basis,
there are also volume discounts. However, specific Factoring Fees cannot
be quoted without information on your customers, invoices, amounts you
wish to factor, and your type of business.
You should know that
we offer one of the lowest factoring fees in the country. And, the fact
is, we want to be your factor, so we will be more than competitive. We
will be happy to provide you with a proposal. To GET PRE-APPROVED,
please CLICK HERE to
complete our short application.
I am currently factoring
with another company, can you compare
our rates and perhaps lower are
factoring fees?
As one of the lowest factoring fee
factor in the industry, we should be able to beat most other offers. If
you are factoring now and would like a factoring fee/rate comparison,
please CLICK HERE to
complete the short-form. The representative that handles your region
will contact you shortly.
How long does it take to
receive the first funding?
The initial funding takes
between 1-3 business days after we receive your signed contract. If you
wish, you can send your invoices to be funded with the signed contract.
After the initial funding, your company can receive funds usually within
24 hours after verification.
Do you purchase outstanding
invoices?
Yes. For the first funding only, we can
purchase your invoices from your outstanding accounts receivable.
Are accounts receivable funding fees tax deducible?
Most accountants agree that accounts receivable funding fees are an
expense and should be treated as such.
Do you verify
invoices with my customers?
Invoice verification is an
essential, and accepted, part of funding. Because factors verify
invoices with customers, they can tell clients if there is a customer
service problem right away. A non-factoring client may not notice the
problem until the invoice becomes past due. By that time, it may be too
late to save the account. For the process to run smoothly, we suggest
that you call your customers or send them a letter in advance to let
them know that you are now working with a factor. If you need assistance
in writing the notification letter, we will be happy to provide you with
a sample letter.
What should I do if my customer
mistakenly sends the payment
to my company?
This
might happen, especially with the first invoice. If this occurs, the
check must be sent to us immediately. Your company should never deposit
invoice checks that were already purchased by the factor. We also ask
that you notify your customer to pay us directly in the future.
What happens if my customer doesn’t pay the invoice?
This depends on whether your company entered into a non-recourse or
recourse agreement with the factor. In a non-recourse agreement, the
factor will absorb the credit-related loss. However, with a recourse
agreement, your company will have to reimburse the factor—either by
having the invoice deducted from the next advance or replace it with
another collectable invoice.
How can I be certain that
the factor will treat my customers well?
The last thing
we want is for you to lose a customer. We are not a collection agency.
We will never harass your customers for money. Maintaining your
customers’ goodwill and confidence are of utmost importance to us!