Factoring
Factoring allows businesses to sell its unpaid invoices to a factoring company in
exchange for immediate cash.
Benefits: Improves cash flow without taking on new debt, reduces waiting time
for payment, and can be easier to qualify for than traditional loans.
Considerations: Factoring is only for business to business receivables.
- Dollar Amount: Predicated on outstanding receivables (75 – 85% advance of outstanding invoices)
- Term: 30-120 Days
- Buy Rate: N/A
- Revenue Requirement: N/A
- Time in Business: N/A
- Credit Score: N/A
- Restricted States: None
- Restricted Industries: Construction
- ABD/Neg Days: N/A
- Fees: 1 – 3%
- Prepays: N/A
- Commission: 1 – 3%