Q: What Is A Factoring Company?
A: A commercial finance company that specializes in the purchase of invoices or accounts receivable for cash.

Q: Is factoring a new financing option?
A: Factoring has been used for centuries. It's one of the oldest forms of financing. Until recently, factoring was primarily used in the garment and textile industries. Today, factoring is a $150 Billion/year financial product and is widely used, by all types of businesses that extend credit to credit-worthy commercial customers.

Q: How does factoring differ from bank funding?
A: Factors make funding decisions based on the credit-worthiness of your customers; a bank makes credit decisions based on your company's financial history, cash flow and collateral. Because factoring is not a loan, no liability appears on your balance sheet. Most importantly, a factor makes funding decisions in days or hours-while banks generally take weeks or even months.

Q. Do I have to factor all of my invoices when I start factoring?
A. No. You decide which invoices you want to factor and which invoices you want to keep as your own. There is no requirement to factor all of your invoices.

Q. How will my customers know where to send payment for invoices that I have chosen to factor?
A. When invoices are factored they will be stamped with the address to send payment to prior to being mailed to your customer.

Q. Are my receivables held as collateral?
A. Yes. A first position on all accounts receivable is required while you are factoring.

Q. Is additional collateral required?
A. No. Unlike traditional bank financing, factoring does not require that all assests of the business be offered as collateral. Factoring only requires a first position lein on your receivables.

Q. What if there is already a lein on my receivables?
A. This usually is not a problem. Most banks are willing to subordinate their first position lein on receivables to factoring companies.

Q: How will our customers be treated?
A: We recognize and respect the relationship and goodwill you have created with your customers. We will treat your customers with the same degree of integrity and professionalism. Any serious issues that arise will be discussed with you and handled in an appropriate manner after discussions with you.

Q: What is the major benefit of factoring?
A: You receive immediate cash for accounts receivable instead of waiting 30, 60 or even 90 days for customers to pay. The process works as if your clients are on a COD (Cash on Delivery) basis. You enjoy increased cash flow, while we provide credit and collection expertise and services, freeing you to concentrate on your core business. Also, perhaps most importantly, is our decision to finance your company is based on your customers' credit-worthiness instead of your balance sheet. If you can deliver the goods and services you've promised to your customers, and if your customers have good credit, we can provide a financial solution, no matter how limited or problematic your company's financial history.

Q: What does factoring cost?
A: Rates are based on individual and specific circumstances. Factoring rates depend on the credit-worthiness of your customers, your average invoice size, average payment cycle, factoring volume and other elements. In general, the cost of factoring is outweighed by its significant benefits: access to immediate cash, credit analysis, collection work and accounts-receivable reporting.