The line is tied to your sales and will grow with your business It minimizes the uncertainty of when you'll get paid for your invoices.Using factoring to finance your business has a number of benefits. One of the advantages of working with us is that we can help you evaluate the credit worthiness of your customers and help you improve your credit decisions. We also use public sources and our own trade experience to make funding determinations. However, there are not our only source of credit performance. To do so, we rely on a number of credit bureaus such as Dun and Bradstreet, Experian and Ansonia. Checking the commercial credit of your customers is one of our most important functions when financing your invoices. In effect, the transaction is being financed based on your client's ability to pay your invoice in full when it's due. The most important requirement is that your customers must have good commercial credit. Have invoices that are free of liens or encumbrances.Have commercial or government customers with good credit.The qualification criteria for factoring invoices is simpler than the criteria for most other products. Once your customer pays the invoice, the factoring company advances the remaining 20%, less the funding fee.This installment averages 80% of the invoice (this varies) and is usually sent to you within one business day. You sell your invoice to a factoring company, who immediately advances you the 1st installment.Your company delivers the goods/services to the client.Transactions are usually structured using two payment installments and follow this format: Transaction structureįactoring is relatively easy to use and can be integrated into most businesses. It also enables you to offer payment terms to your customers because you will no longer need to wait up to eight weeks to get paid for your invoices. It provides your company with immediate funds that can be used to operate the business and pay critical expenses. Factoring solves this problem by financing your open invoices. However, not every company can afford to wait that long for payment. Offering payment terms is expected in today's marketplace, especially if you have large customers. Most business owners have to offer their customers up to 60 days to pay an invoice. This product is designed for resellers, importers and distributors. Specialized financing for companies that resell products to other companies or government entities.
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