Commercial Factoring

What Commercial Factoring is:

Most of us are familiar with “Consumer Factoring”, which is what credit card companies do for merchant who sell items to consumers. The credit card company pays the merchant immediately (less a discount) and then collects from the card holder. “Commercial Factoring” is where a “Factor” pays a commercial business an advance on their invoices (less a discount) and collects from the business’s customer.


How Factoring Works:

  • Factoring clients simply submit approved invoices, along with “proof-of-delivery” backup to the Factor, who will provide a sizable advance to the client within 24 hours (usually 80-95%),
  • The Factor then immediately sends the invoices to the customers, and customer confirms that they will forward the payment to the Factor under the normal trade terms being offered,
  • The Factor takes on the administrative and collection duties associated with those invoices,
  • In addition, the Factor will perform free credit checks on current and future customers, helping the clients establish credit levels that are appropriate for each of their customers.

Firms that Use Factoring:

  • Small to Medium sized companies across North America use this financing vehicle to increase cash
  • Flow
  • Start-up companies with growth potential who can’t access capital from conventional bank sources
  • Companies who have had their bank lines reduced or eliminated and need to maintain cash flow
  • Companies with the opportunity to grow quickly without the financial resources to make it happen

Benefits of Factoring:

  • Cash for Invoices within 24 hours
  • No Up-Front Application Fees
  • Highest Advances in the Industry
  • Competitive Rates
  • Free Credit Checks on your Customers
  • Non-Recourse (Credit Guarantee) Programs
  • Free Invoice Mailing and Processing
  • Collection Services Included
  • Customized Online Reports
  • Dedicated Account Executives
  • Real Time Reporting—Online Access

What a Factoring Program can do for your firm:

  • Improve Cash Flow and Reduce Credit Risk
  • Reduce employee workload by outsourcing credit checking, invoice mailing, and collection duties
  • Utilize the credit strength of their customers to help create a strong credit standing of their own
  • Receive invoice payments by direct deposit when money is most needed
  • Have ready and available cash to pay suppliers and efficiently grow the business