Business is great, orders are pouring in, but you lack the cash to meet the demand and you can't get a loan because you haven't been in business long enough or don't have collateral. Your solution? A Factor Company.
One of the oldest forms of business financing, factoring - selling accounts
receivable to a third-party funding source for cash - is the cash-management
tool of choice for many companies.
The difference between account receivable factoring service and other sources of financing is that the factor actually purchases and tracks commercial invoices. In addition to providing immediate cash on invoices, the factoring services company performs valuable credit analysis on new and existing customers and conducts professional, routine follow up on invoices as they become due.
Depending on the agreement, businesses can pick and choose
which invoices they wish to sell to the factor company, who immediately advances eighty
percent or more of the face value of the invoices. The balance of the funds, less the discount
fee, is released once the invoice is collected.
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factor, broker -- (a businessman who buys or sells for another in exchange for a commission)
Setting up a account receivable factoring service relationship is quick and easy in comparison to other forms of financing. Applications simply call for basic company information and a customer list. Years of profitability are not required which makes account receivable factoring services an option for startups generating receivables. It is possible that funding can occur in as little as a couple of days after the receipt of the application and invoices.
factor company benefits are:
(807) company -- (an institution created to conduct business; "he only invests in large well-established companies"; "he started the company in his garage")
2. (64) company, troupe -- (organization of performers and associated personnel (especially theatrical); "the traveling company all stayed at the same hotel")
5. (13) party, company -- (a band of people associated temporarily in some activity; "they organized a party to search for food"; "the company of cooks walked into the kitchen")
9. ship's company, company -- (crew of a ship including the officers; the whole force or personnel of a ship)
What the Factor Company Business Looks for
In order to expedite the funding transaction with you and the factor company, it is important that all the paperwork is filled out completely. With this in mind, the following are lists of what a factor looks for to proceed with your funding process: