>>SOLUTIONS

Factoring

What Is Factoring? Factoring is an asset based financing method whereby your company sells all or some of its accounts receivable or invoices at a discount to a factor (the finance company) for immediate cash. Depending on various characteristics of your business, a factor will advance from 80-90 percent of the face value of the invoice. The application process can take as little as 24-48 hours. Once a relationship with the factor is established, advances on your receivables can usually be made on the same day.

Who is Eligible for Factoring? Factoring can help businesses of all sizes, from startups to mature organizations. Factors look for companies with a creditworthy customer base. Factoring is based on your clients' credit, not yours!

Most factors prefer to work with companies in select industries, but rest assured, we can find a factor for yours. Invoices for products and services rendered are eligible, provided they are not due from consumers. Business-to-business (B2B) or business-to-government (B2G) types of receivables are preferred.

What are the Benefits of Factoring? Factoring can be a catalyst to business success. Some of the benefits include:

	Quick funding
	Improved cash flow (frees cash tied up in accounts receivable)
	Option to factor all, or only a portion of your receivables (which lowers total financing costs)
	Expand working capital financing
	Take advantage of supplier discounts
	No debt created (factoring is not a loan, it is an advance)
	Does not tie up all business assets as collateral
	Eliminates the sale-to-collection business cycle
	Some factors can advance on purchase orders

Companies that can benefit from factoring include:

	Startups
	Rapidly growing
	Seasonal
	Burdened by slow turnover of receivables
	Concerned about large concentration of receivables due from core customers
	Insufficient collateral
	Undercapitalized, over-leveraged balance sheet
	Transition, turnaround situation
	Acquisition, buyout situation
	Lack of, or unsatisfactory, credit history
	Unable to obtain conventional bank financing

As conditions warrant, we will work with you to move to a Commercial Line of Credit accommodation.

© 2003 Inspired Financial Solutions