Facts About Invoice Factoring

I hope the following questions and answers will provide you with an understanding of invoice factoring, what it is, how it works, and how your company can begin this funding process to enhance your working capital and cash flow.

1. What is Factoring?

Factoring is the purchase of valid Commercial Accounts Receivable [AR] for cash.

2. I thought factoring was used only by companies in trouble?

Factoring gives your business the power to grow, without giving away equity or taking on debt. Contrary to what you may have heard, factoring is NOT a tool used only by struggling companies. Financially smart companies use factoring as a powerful tool to release capital tied up in AR.

3. How is factoring different from a loan, say from a bank? Do I have to sign a Personal Guarantee?

Factoring is not a loan; it is the process of purchasing valid Commercial AR [invoices] from your business at a small discount. Unlike most banks and other factors, there is NO personal guarantee required with our professional funding services.

4. Does my business qualify for factoring?

Almost every business can qualify. Our guidelines are very simple: if you have AR, due to a sale in a business to business transaction, you may qualify. Any size invoice can be funded, provided the service you offer, or the product you sell has been completed and delivered.

5. How will my customers know where to send payment for invoices that I have chosen to factor?

Your customer will be notified to pay us directly. When invoices are factored they will be stamped with the address to send payment to prior to being mailed to your customer. Your company should never deposit invoice checks that were already purchased by a factor.

6. 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. Some banks will accommodate the request and others may decline depending on your circumstances. Our number one referrals come from loan officers willing to help out the client in cash flow needs. They are very familiar with this kind of interim financing. The other alternative is to pay off the loan if there are plenty of receivables to leverage the buy out.

7. How can I be certain that your company 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! 

Please contact us in confidence today to see how we can assist you with factoring services. Visit www.businesscash.com or call (561) 882-1331.

About the author

< href="http://www.chriscurtin.com/">Chris Curtin is the CEO and founders of Bankers Advocate. Bankers Advocate is a Boutique Sales, Mergers and Acquisitions firm serving companies with enterprise values up to $30 million dollars. They design successful Exit Strategies for Entrepreneurs. They also have a very active Targeted Business Search Program where our Individual, Corporate and Private Equity Clients entrust us to find them the right companies to purchase in the “Hidden Market”.

Chris is a board member of the Association for Corporate Growth (ACG), a board member of the Angel Investment Forum, and was the founding President of the Turnaround Management Association’s (TMA) Florida Chapter and served on the TMA’s Executive Board of Directors. He also served on the Micro Loan Committee for The Minority & Women Business Enterprise Alliance in Orlando and served the Board of the Palm Beach County Resource Center. He is also the long time treasurer of the GA Tech Alumni Club of the Palm Beaches and recently joined the board of Child and Family Connections, the lead agency for community-based care in Palm Beach County charged with management of the organization, enhancement, coordination, and oversight of foster care and related services.

Visit www.chriscurtin.com and www.bankersadvocate.com or call 561-882-1331.

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