The First Step:
The Client profile
You begin by filling out a simple client profile,
which we will provide you.
Please click here for profile. This profile
will cover basics such as your company's
name and address, the nature of your
business, and information about your customers.
You may need to supply an accounts
receivable aging report, existing customers'
credit limits, or other related documents.
Remember the factor will attempt to determine the creditworthiness of your customers
independent of their credit history with
your business. We want a broader view of their
overall credit status.
During this initial stage you will also cover
basic financial arrangements with the factor.
For instance, what will be the monthly
volume of invoices you want to factor
(i.e. how liquid do you need to be)?
What will the advance rate and
the discount rate be? How quickly will
the factor issue the advance to you?
In most cases, the answers to these
questions will vary depending on the
financial strength of your customer(s)
and the anticipated monthly sales
volume to be factored. Variations
between industries, length of time in operation,
and general reputation of how risky a
customer of yours may be. For instance,
a long list of high-risk clients will cost
you more in factoring fees than a
short list of government agencies
with a slow-pay history.
In the factoring business, volume is all important. The higher your volume(the dollar amount of invoices you factor), the more favorable your rates will be.
The factor will use the client profile you submit to determine if your business is suitable for factoring. This process is simply the factor analyzing the risks versus the rewards, using the information you provided.
Once approved, you can expect to negotiate terms and conditions. The negotiation process takes several aspects of the deal into consideration. For instance, if you want to factor $10,000, you can't expect as good a deal as a company that wants to factor $500,000.
During the negotiation process, you will become well aware of what it costs to factor your accounts receivable. After you reach an agreement with the factor, the funding wheels begin to roll. The factor conducts due diligence by researching your customers' credit and any liens placed against your company. The factor also confirms the legitimacy of your invoice before buying your receivables and advancing cash to you.
We are a nationwide company offering
customers tell us that our combination
other invoice factoring companies,
"In all my
years of finance experience I have found you as being the best source,
your personal touch and commitment to us has made our relationship a great
blend of business and friendship."