Factoring Has Been Around for Eons
Now arriving ahead of schedule:
The first recognized use of this type of financing in American history was by early American settlers who sent their agricultural products back to England, the home country. Instead of having to wait the interminable time for the sailing ships to cross the Atlantic in two directions to receive payment, these settlers would accept discounted payments for their products from Factors who would then collect the debt from the British merchants.
Factoring is an exciting way to turn your outstanding receivables into a flood of cash and is used by businesses to improve cash flow. It is also a way to decrease the administrative costs of doing business. In this regard, see our “Credit Management Calculator” on this website.
We all know that “cash is king.” Having a strong cash flow and a healthy bank balance is the lifeblood of a business. Instead of being strapped for cash while you wait for your customers to pay, after delivery of goods or services and the production of an invoice, your company will have immediate access to cash advanced against that invoice. You can then use these funds in your business to satisfy those demands you deem appropriate. Use it to pay for the additional costs of expanding sales, or even to assist in the investment of capital equipment for your operations.
A factoring client can raise up to 90% of the face value of an unpaid invoice immediately, usually within 24 hours. Sometimes funds can be made available on the same business day as the production of invoices. Factoring turns any business into a cash business and best of all, funds availability grows in line with increasing sales – no need to go back to the bank to beg for an increase in your credit line, if you have one! Once the customer pays, the balance of the invoice less the factoring fee, the amount known in the industry as the “Reserve” is paid to you.
Designed to help you go the extra mile, our Factoring Programs offer easy deployment of the Working Capital you need in a way that is professional, quick and easy. When it comes to your productivity and peace of mind, every detail counts and our Credit processes and Portfolio monitoring services do just that.