From time to time, large and small companies alike run short on cash. At times like these, working capital may be hard to find. Accounts Receivable in many industries can be aged 45-60 days routinely. One solution for companies in need of short term cash is to borrow money today against Accounts Receivables, Purchase Orders or Assets Cash flow can be had in a short period of time as compared to obtaining a New Loan Approval, because the credit decision is based on the quality of your clients business and ability to pay the Receivable.
Typically a Factor discounts the Approved Invoice being purchased a fixed percentage and pays you the remainder immediately. The percentage rate is determined by the quality of the paper. The Factor obtains ownership of the purchased receivable, and many times will collect payment for you, allowing you to focus on new business development.
- Fast Cash
- No Long Loan Documentation
- Size of Your Business is usually NOT a consideration by a Factor
Each Factor will charge a specific fee based on the quality of the receivable.