Factoring

When your working capital is comprised largely of open accounts instead of cash, it’s time to look at factoring as a solution to short-term cash flow concerns. 

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Accounts Receivable Factoring

Accelerate cash flow

Accounts receivable can be sold to a factor to provide immediate cash that you can use for any business purpose. The factor provides a percent of the amount owed, takes over payment processing and remits the remaining amount, minus their factoring fee, upon receipt of payment.
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Contract Factoring

Maintain cash on hand for operational flexibility

Businesses that operate on contracts such as construction, video and film production companies, auto dealerships and distributors may find themselves with an agreement, but no cash on hand to fulfill the job. Factoring the contract gives you the funds necessary to deliver work on time and on budget, then pays the remainder of profits, minus a factoring fee, upon payment by your client.
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Purchase Order Factoring

Fulfill high-value purchase orders with factoring

Small and medium-sized businesses used to be limited by their buying power. Today, with factoring, a business can fulfill a purchase order that is outside their normal scope. The factor will pay a percentage up front, giving your business the funds to fulfill the order. Upon remittance of the bill, the factor pays the remaining profits from the sale, minus a factoring fee.
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Advantages

Increase your capacity and accelerate your cash flow with factoring.

Access funds now that otherwise may slow down your operations or hamper your ability to do business.

Apply funds to materials, open to buy dollars, payroll, purchase orders, or any other legitimate business revenue-generating activity.

Avoid a credit check with factoring. Your customer’s history of payment has a much greater bearing on the agreement with your factor.

We’ve given a few examples of the most popular types of loans that bring cash into your business quickly.

There is always more to learn.

Is factoring a good deal?
Factoring keeps loan activity off of your books because it is considered the sale of an asset. Factoring fees are also quite competitive as compared with working capital loans. 
Is factoring risky?
Risk is determined by your client’s history of payments. If the client fails to pay or does not pay the full amount, you may owe back funds that were advanced, even though your client hasn’t paid for products or services delivered. Non-recourse factoring agreements come with higher fees, but further reduce your risk. Talk with a broker to find out what’s available.
When should I consider factoring?
The best opportunity for factoring arises when you have high-value accounts receivable and simultaneously have pressing business financial needs. Funding can be applied to any revenue-generating activity – production, payroll or goods on hand, for example. If your business is already highly leveraged against existing assets, factoring allows access to capital without adding debt to the books.

Here's How To Get Started

Complete a Short Questionnaire

The information you provide will help us begin creating a plan for where you want to go.  As we learn more about you, we’ll customize and adapt our solutions for your true needs.

Have an In-Depth Conversation with our Team

After reviewing the information, we’ll set up a conversation to understand your business more thoroughly.  With the full picture of you and your business, we will work with our network to generate offers and showcase the best solutions to you. 

Submit an Application

Our team will answer any questions you may have to this point.  When you are content with the answers and information, we’ll help navigate you through the loan application process. Take Advantage of Continual Support. Things change.  We get it. Our lending professionals and brokers will stand by to provide further advice or answer questions as needed, even after the initial application is complete. 

What is the working capital ratio?

If you don’t have enough money to pay employees and keep the lights on, then the value of your long-term assets matters very little. That money, used for almost all daily expenses is referred to as working capital. Most businesses try to maintain a working capital ratio between 1.5 and 2.0. If you’re not sure what your ratio is, simply divide your firm’s annual liquid assets by its annual short-term expenses. The result is your working capital ratio.

Is working capital financing right for my firm?

If you are looking to make a large investment or a long-term purchase, it is usually better to focus on certain tools (like a real-estate loan).  Working capital loans are usually better for short-term situations and boosting operational cash. If you are not in a rush for funds, other financing tools may be better for you, as working capital financing often comes with higher interest rates.

Will a factor impact my client relationships?
While not all factors interact with your clients in the same way, most clients won’t notice when you use a factor. In most situations, a simple notice of where to send payment is the only contact the client receives.
Are Hard Money Loans a safe option?
When you work with our network, you can rest assured that each lender has been thoroughly vetted, is licensed, and bears a reputation for integrity. All of our partners adhere to local and national laws and policies and meet established standards for credibility and trustworthiness. Additionally, if a Hard Money Loan is not the right tool for your business, our partners will tell you upfront and help you find a more appropriate financial solution. We are transparent with our terms and conditions and will answer any questions your team has. We want your business to feel safe and comfortable in its decision to work with us.