Receivables Funding Process
Open
a factoring account. Get Started Today.
If your factoring account has not been established yet get
started now opening an account. It normally takes 5 to 7 business
days to open your account and begin Factoring. Once your account
is open you will be able to receive funding for your receivables
within 24 hours.
1) Credit is established on the customers who's invoices you wish to factor.
You provide the business name, address, and amount you wish to factor for that customer. Credit is pulled and a monthly limit is established for that customer. This credit validation service is free to you, the client. This is a nice benefit of factoring - free credit validation for your new customers.
2) Complete your business transaction as usual. Generate an invoice for products or services.
You generate an invoice for products delivered and/or services rendered for your customer.
3) You send in the invoices for Factoring.
Send your original invoice via Fed Ex (or any other 1 day service) to the factoring company along with proof of product/service delivery you normally receive from your customer. Invoices eligible for factoring are ones that are payable by other businesses or governments.
Note:
You do not need to send invoices in for factoring the day they
are created. You can hold on to your invoices for as long as you wish to lower
your factoring fees. The factoring fees do not begin until you
have sold the invoice to the Factor.
Example:
ABC Company usually pays on 30 day terms, however your business
needs the funds in 15 days to fulfill your next order. You can hold on to the invoice for
14 days before you send it for factoring. Therefore, you pay only
16 days worth of factoring fees instead of 30 and thus cutting your factoring
costs in half. |
4) Factoring company verifies that products were received and/or services rendered.
5) You receive funds wired to your business banking account. Funding
Advance.
Your business will
receive an immediate advance payment wired to your business bank
account. The advance is usually between 80% and 90% of the original
invoice amount. You are free to spend this money however you want,
its yours!
6) Factoring company stamps your invoice and sends it to your customer.
The invoice is stamped with the payment address of the factoring company and sent to your customer. Your customer follows the instructions stamped on the invoice by sending payment to the factoring company.
7) Your customer pays the invoice when its due.
When payment is received in full from your customer,
your business will receive the remainder of your advance payment
(wired to your account) minus the Factor's fee (the discount rate).
8) You can monitor the status of all your transactions from your online account.
Its that easy!
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