What is Factoring?
Description:
Factoring is a method of financing in which you sell your Accounts Receivable at a discount to another company. The factoring company advances money to you and is, then responsible for collections.
There are two primary types of factoring, recourse and non-recourse. Recourse is when the client absorbs the risk of non-payment by the buyer. In the event of buyer default, the factors client is responsible for repayment. Non recourse factoring is when the factor takes the credit risk of the buyer. If the buyer becomes insolvent after the receivables are purchased, the factor absorbs the loss, not the client.
What Is Needed
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Good invoices from quality buyers average invoices should be at least 10,000 or more. Your Company can not have any judgments and liens against it. |
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Invoices are less than 90 days old. |
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The desire to have cash flow when you need it and to not rely on payments from your Clients in order to meet your businesses needs. |
Who Should Apply
New Businesses
High Growth Companies
Turnaround /Undercapitalized situations
Seasonal Business
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