Accounts Receivable Financing

Accounts Receivable Financing is a type of business loan where a company is able to borrow money using there accounts receivables as collateral. Accounts Receivable Financing is available to both large and small firms, and this website will explain how these loans work.

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1. Accounts Receivable Financing - Info

2. Factoring versus Bank Loan

3. How it Works

4. Benefits

5. Which Companies Are Eligible?

6. Commercial Invoices versus Government Invoices

7. Possible Problems

8. Recourse versus Non-Recourse

9. What to Look For in a Factoring Company

Accounts Receivable Financing - Info

Accounts Receivable Financing is essentially the selling of invoices to receive immediate income and capital for a business. Also know as Invoice Factoring , it is a billion dollar industry. Unbeknownst to most small companies, invoice factoring has been around for years and is often utilized by larger companies. It is only recently that this service has been offered to small companies which have a great deal of trouble getting funding from banks and financial institutions.

Accounts Receivable Financing is based on the overall credit rating of the invoiced customer and not solely on the credit rating of the client company. This allows client companies with less than two years of history. It also allows companies in financially difficult times to utilize accounts receivable financing.

The overall funding process is simple enough. Your company invoices your customer for services or goods you provided. Your company sends in the invoice to the factoring agent. Funds are then either wired or deposited directly into your account. The process takes about 48 hours to receive the funding. Once the invoice has been paid by your customer, the factoring agent takes out the factoring fee, generally 2% to 3% from the 20% to 25% of the invoice face value not funded. Any remaining funds are then transferred directly to you. Again, this process takes about 48 hours.

Small Business Factoring involves the act of selling of outstanding invoices to other companies that then take on the debt owed. Companies that offer accounts receivable financing solutions buy invoices at discounted rates and the money serves as a source of fast cash for businesses in need of cash.

Factoring versus Bank Loan

Many small businesses have difficulty acquiring loans or a Line of Credit from traditional financial institutions. There are a number of reasons for this. Credit history, length of time in business, collateral, and the type of industry all play heavily into a bank's decision to loan or not to loan money.

Additionally, banks may be ill equipped to handle the job of monitoring invoices and inventory of a particular industry. They may not want to take on the risk associated with that type of funding option. Furthermore, they may not fully understand the industry that your company competes in. To a banker, a lack of understanding equals greater risk and greater risk often times equals a denial.

By contrast, Factoring Companies rely on the creditworthiness of your clients. There are no rigid standards to meet on your company's part. New business and old businesses alike can benefit. Furthermore, some factoring agencies actually offer factoring solutions to companies under bankruptcy protection.

There are a number of benefits derived from the use of Accounts Receivable Financing solutions. First, the company that is selling invoices can rid themselves of the hassle of handling various debts-the debts become the problem of the company offering accounts receivable financing solutions. Also, a company in need of money can get their hands on some fast cash, thanks to Accounts Receivable Financing services.

How it Works

The initial application process is completed relatively quickly. The paperwork is minimal for the world of corporate finance. Most of the paperwork should already be on hand or easily obtainable. Paperwork includes a two year history, if applicable, of the company P&L, balance sheet, and income statement. Prior invoices may need to be submitted so that the factoring agent may get a better understanding of the invoicing process and format used in your industry and by you and your clientele. The packet is then reviewed by the factoring agent. Upon approval, a Letter of Intent (LOI) is submitted to the client company. This LOI is then signed by the company and returned. A contract is submitted. Due diligence is performed one last time by the factoring agent. Final approval is granted. The invoice factoring begins. The entire application process takes as little as two weeks. If open invoices are submitted during the application process, funding for these invoices generally takes a few additional days due to the newness of the account.

A R Factoring AR Factoring

The funding process takes 24 to 48 hours. This is the amount of time from submission of the invoice until funding is received into the business account. As any business owner can tell, this is a fraction of time when compared to waiting 35 to 45 days for payment of an invoice.

Small Business Factoring Receivable Financing

Funding amounts vary depending on the terms of your businesses loan. Typically, the factoring is done at 80% of the face value of the invoice. Say for example the invoice your company submits to the factoring agent is for $200,000. The amount of funding your company would receive initially would be 80% of the face value which would be $160,000. Once payment is received by the factoring agent, the factoring fee is taken out of the remainder. This can be anywhere from 2 to 3% of the funding amount. At a 3% funding rate the fee would be $4,800. This amount is then deducted from the $40,000 and the remainder is transferred directly into the account.

Benefits

Accounts receivable financing offers the client company numerous benefits which help ensure the growth and the stability of the funded company. By factoring invoices, money can be obtained more quickly and provide much needed capital for the day to day operations of the company. The client company may actually be able to reduce overhead by paying some of their own invoices early enough to receive any discount offered.

A R Factoring AR Factoring

The client company enjoys the benefit of an increased credit rating by having the funds available to make payments on time and even ahead of schedule. In addition, since the client business now has the capital to operate on hand there is no reason to seek outside funding such as venture capital. Such funding options often require the relinquishment of equity in the company. Equity now can remain with the business owner.

Small Business Factoring Receivable Financing

Client companies also can reduce the amount of early payment discounts they offer their customers. This saves the client company money while still allowing that company to receive the funding needed to operate. Additional savings can be realized by volume discounts on purchases due to increased cooperating capital.

Which Companies Are Eligible?

While any company can benefit from accounts receivable financing, some company's find the experience more fruitful than others. Industries such as construction, trucking, manufacturing, textiles, staffing, and engineering companies utilize accounts receivable financing on a daily basis. As well, any business which has customers with a solid rating or contracts with the government and doesn't want to wait for 30 to 90 days for the invoice to be paid can reduce cash flow stress through this type of funding option.

Invoice Factoring Line of Credit

Companies that do not meet the traditional criteria for a bank loan often find that this type of funding is able to meet their needs. Additionally, businesses with credit problems or less-than-perfect credit enjoy the fact that the funding is based on the credit rating of their customer. This takes a great deal of pressure off the client company.

Invoice Factoring Line of Credit

Furthermore, companies that are experiencing a period of hyper-growth and are having trouble keeping up with the financial needs of the business tend to do well under these types of programs. This allows the company to continue on with the growth without acquiring vast amounts of debt.

Commercial Invoices versus Government Invoices

It would stand to reason that an invoice is an invoice regardless of whether or not the client is a commercial entity or a governmental agency. This, however, is not the case with invoice factoring. Factoring government invoices requires much more forethought and planning on the part of the business owner than say an invoice to Coca-Cola.

Accounts Receivable Factoring Accounts Receivable Financing

The reason this is true is because of the government regulations required to complete the initial funding requirements are monumental. It is best to go ahead and negotiate the idea of factoring invoices before award of the contract. Doing so will alert the contracting officer ahead of time so that fewer problems arise later on during the fulfillment of your contract to the government.

If however, your company has already been awarded the contract and has begun performing the services required, you may be in for more of a challenge than you'd hoped. It is not a simple matter of faxing the latest invoice off to the factoring agent and waiting on the funding to arrive. Speak to the factoring agent ahead of time about the contract. Additional forms need to be submitted to the contracting agency of the government department you are contracted with. Essentially, a modification must be completed prior to factoring the first invoice. As with most things dealing with government contracting, this process may take several weeks to complete. Be patient and work with both the factoring agent and the contracting agent. It can be worked through for long term results.

Commercial Factoring Discounting Factoring

Another issue to be concerned about with factoring government invoices is the businesses Cage Code. In the paper reduction world of the government only one account is authorized in conjunction with this code. Once the payment is sent it will go directly into that account. Hence, once the factoring has begun for your company and you modify your CCR registration to go directly to the factoring agent, as required by the factoring contract, all government invoices must then be processed through the factoring company. Say, for example, your business was awarded a $1 million contract which required your company to go out and begin accounts receivable financing in the first place. In the meantime, during the life of this big contract, your company continues to sell smaller items to the government. The average invoice amount for these projects is $20,000. After a few invoices under the bigger contract have been funded, you've been able to shore up your reserves to a point where you don't particularly need to factor the smaller invoices, especially at a 3% funding fee of the invoice value. Whether you choose to factor the invoice or not, the payment from the government will still go to the account on record for your business's Cage Code. If the factoring agent has not funded the invoice they will then transfer the funds directly to you. This process will add at least 48 hours to your payment being received.

Possible Problems

One of the pitfalls with factoring and one not readily discussed by factoring agents can occur, and usually will occur at the worst possible time for the business and produce a situation where the invoice in question is simply not funded or funded at a fraction of the face value. The problem is not with the invoice, but with the company to which the invoice was issued. Likewise, this typically happens with factoring accounts that have little activity or are at the beginning of the relationship.

Commercial Line of Credit Small Business Financing

Accounts receivable financing is based primarily on the credit rating of the company being invoiced. This allows for the client business to establish credit in their name without having to meet overly stringent regulation. The situation arises when the company invoiced does not meet the requirements of the factoring agent.

Say for example, you've created a teaming arrangement with an 8(a) company in Anchorage, Alaska. Your headquarters are in Atlanta. Your factoring agent is in Florida. Chances are the factoring agent has never heard of the 8(a) company and has no prior knowledge of their services of reputation. The factoring agent then researches the invoiced company. If he is not satisfied with the information he gets back, perhaps he pulled an incomplete file, there is a good chance that the funding will not happen.

Commercial Line of Credit Small Business Financing

On the flip side of this coin is a company the funding agent does know a good deal about. Unfortunately, everything he knows is negative. The company has recently lost major contracts. The company has a habit of paying late on most invoices. In this case, you will have a great deal of trouble getting any invoice sent to this company funded by the factoring agent.

Recourse versus Non-Recourse

Unfortunately, businesses do fall on hard times and the companies your business deals with may be no exception. What happens if the company invoiced is unable to make payment on the invoice in question? The answer depends on the terms and conditions of the factoring line. It's a difficult situation to deal with, but one which must be addressed early on in the factoring relationship. This will help avoid nasty surprises if and when the situation arises for your company.

Factoring Companies Factoring Company

Recourse factoring allows the factoring agent to come back to the client company for payments should the invoice go unpaid. This can come as quite a shock to the client company if this situation is unforeseen. The client company must then pay back the funding or submit another invoice of equal or greater value. This type of funding holds the least amount of risk for the factoring agent thereby reducing the amount of fees charged.

Non-Recourse transactions transfer the entire amount of solvency directly to the factoring agent. Should the invoice go unpaid, the factoring agent cannot come back to the client company for payment for any reason. The risk for this type of factoring is the greatest for the factoring agent causing the fees to be at their highest level.

A third option has emerged to the recourse dilemma. This is the option of Modified recourse factoring. With this option the client company purchases insurance which covers all parties should the invoice go unpaid. In the event of the invoiced company filing for bankruptcy, the insurance would cover the amount of the funding.

Factoring Companies Factoring Company

Choosing which factoring recourse option is best for you depends greatly on your individual situation. If you feel very confident in your clients ability to repay the invoice, then there may be little question of recourse in your mind. If however, you are unsure of your client and their ability to pay timely or at all, you may want to consider your options. Many factoring companies do not offer non-recourse factoring so shop around for the company which offers the best value for your particular situation.

What to Look For in a Factoring Company

The use of accounts receivable financing services is a way for a business to clear up any debt they may have in addition to providing the business with money that it requires to continue to be successful. There are literally hundreds of companies nationwide which offer the service of Accounts receivable financing or Invoice factoring. Many will claim to offer the fastest turn around time on funding or the lowest rates available. Be cautious and take your time to find the right company for your individual needs.

Factoring Companies Factoring Company

First and foremost, become your own expert in the matter. Investigate local companies which offer this service. Is it possible to have a face to face interview with a representative? If so, what information are they willing to provide you with up front? Factoring company representatives should be able answer all the questions you will have before and during the application process. A face to face meeting can help determine whether the relationship will be a beneficial one for both parties involved.

Avoid high pressure sales techniques when seeking accounts receivable financing options. Your business is not buying a used car after all. The invoices you submit to your customers are the very heartbeat of your company. You should not feel pressured into this type of funding option. You may find that after a thorough review of all of the issues involved that invoice factoring is not a good fit for your situation. That's a perfectly legitimate position to take. No one should make you feel guilty or pressured into signing up for the funding if you are not comfortable.

Working Capital Management Comercial Finance Broker

Lastly, remember than the company you choose to use for invoice factoring will be one with whom you will develop a long term relationship with. Make sure that this is a company that you can trust. You need to do some research. Contact the Better Business Bureau and make sure that there are no complaints. A company should always research the accounts receivable financing company they plan to work with long before they enter into any negotiations. Contact the state business license office and make sure that it is a reputable company that has been around for awhile. Finally, ask for local references that you can call and inquire about the quality of service and the support through the overall process. No one can give a bird's eye view like a current customer.

International Factoring Services

Factoring for Distributors

Having trouble fulfilling purchase orders due to cash flow shortages?

1st Commercial Credit offers receivable finance for distributors experiencing working capital shortages. Our Receivable Factoring and Letters of Credit service provides the utmost flexibility for enhancing your company’s capacity to grow without having to worry about pledging additional collateral. We leverage your credit line solely on your customer’s financial strength, not your company's.

Receivable financing rates as low as 1.59%

Receivable Financing Program for Distributors - No financials - No monthly minimums - No invoice minimums - No facility fees - No audits - No up-front fees - No hidden fees - Set up account in 3 to 5 working days - 24 hr funding thereafter - Receivable credit lines starting at $5,000 & up to $10 million - Customer referrals upon your request WE MAKE SAME DAY DECISIONS!

We Make Receivable Finance a Simple Process! A two page application An accounts receivable aging report A customer list with credit limit request Copy of articles of Incorporation or DBA filing Rate confirmation agreement Invoices to factor That's It, its that simple: View Recent Transactions Most of our clients are either: experiencing cash flow shortages due to a slow turnover in accounts receivable fast growing companies whose past earnings and sales histories will not justify traditional bank loan financing start-up businesses with no financing base companies with seasonal or uneven sales patterns principals with good or bad credit and cannot obtain traditional financing have lost their line of credit due to covenant violations

All your Business Needs is Receivables

Distributions facilities that need to offer credit terms to customers utilize our funding program. Resellers and distributors can easily tap into their receivables asset for immediate cash flow. You may offer credit terms to new and larger customers at an affordable cost, take advantage of early pay discounts offered by your suppliers, buy larger quantities with additional discounts, and countless other opportunities that your distribution business is missing out on.

Financing Staffing Firms

Meeting staffing payroll during growth can be a challenge. 1st Commercial Credit can help you grow your company with unlimited payroll funding , whether you're a start up or a multi-million dollar operation. Call us now and get initial funding in 3 to 5 working days. No financials needed, No up-front fees to set up, it is that easy. We can accommodate factoring credit lines to new staffing companies with minimal funding needs and up to $10 million for large staffing agencies.

Temp-Staffing Receivable Financing - Receivable financing rates at 1.59 for 30 days. - No financials - No monthly minimums - No invoice minimums - No facility fees - No audits - No up-front fees - No hidden fees - Set up account in 3 to 5 working days - 24 hr funding thereafter - Receivable credit lines starting at $5,000 & up to $10 million - Customer referrals upon your request WE MAKE SAME DAY DECISIONS!

We Make Receivable Finance a Simple Process! A two page application An accounts receivable aging report A customer list with credit limit request Copy of articles of Incorporation or DBA filing Rate confirmation agreement Invoices to factor That's It, its that simple: View Recent Transactions Most of our clients are either: experiencing cash flow shortages due to a slow turnover in accounts receivable fast growing companies whose past earnings and sales histories will not justify traditional bank loan financing start-up businesses with no financing base companies with seasonal or uneven sales patterns principals with good or bad credit and cannot obtain traditional financing have lost their line of credit due to covenant violations

Financing the Staffing Industry

Is your business growing faster than your operating capital?

At 1st Commercial Credit, our accounts receivable financing service is a flexible source of funds for Staffing Companies. We simply utilize your accounts receivable as the collateral and advance funds against the face value of your invoices. The receivable credit line grows proportionately with your sales cycle and we can fund as little as $5,000 a month and up to $10 million for larger companies.
and see if this financial method will work for your business.

What kind of staffing companies come to us for funding?

• Young companies experiencing growth and need cash today. In most cases they have been turned down by traditional banks.

• Mature companies that have capped their working credit line established by a bank and need more leverage.

• Companies that are experiencing lack of service from another factoring company.

Financing Staffing firm Invoices for as little as $5,000 a month and up to 10 million for larger companies.

• Credit line based on percentage of eligible accounts receivable.

• Easy to understand financing fees.

• Invoices funded within 24hrs.

• Eliminate the need for bank loans or SBA loans.

• Funding can take place in 3 to 5 working days.

• Start up staffing companies welcomed.

Why do Staffing firms benefit by financing account receivables with us?

• The use of back-office support for collections and mailing out your invoices sometimes offset the financing fees or decrease internal overhead related cost.

• Free credit analysis and collection assistance to prevent bad debt.

• Free Reports and statements of your account status via internet.

• Optional full service available with payroll and tax services.

What is needed to finance an Employment Staffing and IT Consulting Firms.

1. You send the original invoices with proof of performance (time sheets). The service must be performed before funding.

2. The invoice is verified and then the advance is funded, typically 90% of the invoice depending on the credit worthiness of your customers. Funds will be advanced within 24hrs. following verification of the invoices. This is usually completed the same day that they are received. The balance of the advance is called the "Reserve". The reserve is held back until the customer pays the invoice in full.

3. Payment of the invoices are made directly to us from your customers. Once received, the reserve is paid to you minus the discount fee.

4. At your option, the funds are sent via wire transfer, ACH or check.

5. Credit approval for new accounts is easy. All is needed is the name and address of the customer.

6. Due diligence of liens and pending lawsuits of your company will be performed prior to funding.

We service the following Staffing Industries.

• Professional

  • Twin Plant Management and Engineers

  • Sales - Marketing - Sales Managers

  • Accounting - Controllers - CPA's

  • Healthcare - PTs - RNs - CNAs - OTs - MDs

  • Data Processing - I.T. - Web Design

  • Mid Management - Administrative - Technical

• Office Services

  • Office Managers - Administrators

  • Full Charge Bookkeepers - Accounting Clerks

  • Admin Assistants - Executive - Legal Secretaries

  • Clerical - General Office - Data Entry

  • Doctor's Office Assistants - Medical Secretaries

  • Call Center Phone Attendants and More

• Manufacturing

  • Assembly - Warehouse - Quality Control - Quality Assurance

  • Plastic Injection Molding

  • Warehouse distribution

  • Skilled - Unskilled Labor

  • Light Industrial - Machine Operators

  • Fork Lift Operators - Loaders /Unloaders

  • Electronics Assembly - Packers

Factoring Service Providers

Factoring Service Providers

Service providers benefit the most by factoring receivables. If you review most businesses that are providing a service to commercial accounts, they rarely can offer tangible assets to pledge against a loan. Banks prefer to lend against land or property, inventory and auctionable assets that can easily be liquidated. It is for this reason, that many service industries are turned down for a loan or are approved with limited funds for working capital.

Service Industries benefit by factoring rather than borrowing form a bank.

Offering credit terms to commercial accounts can get your business in a cash flow shortage. At 1st Commercial Credit, we can assist your business by allowing you to offer credit to commercial accounts and grow your business. The extension of credit is evaluated by the financial strength of the customer (Buyer), not our client (The seller). This method allows our prospective clients to acquire funds within days of completing an application with minimal paper work.

Receivable Financing for Service Providers - Receivable financing rates as low as 1.59% - No financials - No monthly minimums - No invoice minimums - No facility fees - No audits - No up-front fees - No hidden fees - Set up account in 3 to 5 working days - 24 hr funding thereafter - Receivable credit lines starting at $5,000 & up to $10 million - Customer referrals upon your request WE MAKE SAME DAY DECISIONS!

We Make Receivable Finance a Simple Process! A two page application An accounts receivable aging report A customer list with credit limit request Copy of articles of Incorporation or DBA filing Rate confirmation agreement Invoices to factor That's It, its that simple: View Recent Transactions Most of our clients are either: experiencing cash flow shortages due to a slow turnover in accounts receivable fast growing companies whose past earnings and sales histories will not justify traditional bank loan financing start-up businesses with no financing base companies with seasonal or uneven sales patterns principals with good or bad credit and cannot obtain traditional financing have lost their line of credit due to covenant violations

Medical Accounts Receivable Financing

Providing Medical Financial Services Nationwide.

What is Medical Accounts Receivable Financing? Medical receivable financing is a means by which the healthcare provider is granted an asset based credit line that is based on the net realized value for his/her billings to third-party payors (i.e. commercial insurance companies, HMO’s, Blue Cross-Blue Shield, Medicare and Medicaid).

For medical providers that have accounts receivable with a net realized value (NRV) of $500,000 or less, we offer our medical factoring program which is a funding program that purchases your billings (net realized value) at a discount. Clients that exceed $500,000 in accounts receivable (NRV) and meet our criteria for financing will be proposed an asset based receivable financing program that is priced at a prime plus schedule.

1st Commercial Credit provides medical receivable funding for two types of medical provider clients. If you are a Medical staffing agency invoicing to a commercial account (i.e. Hospitals, Nursing Homes, etc.) please go to this web page " Medical Staffing Finance".

1st Commercial Credit realizes that a successful health care practice depends as much upon effective financial management as it does on quality care. For this reason, an increasing number of health care providers are looking for finance companies that can help them handle their cash flow requirements. 1st Commercial Credit can facilitate financial funding of medical receivables and has a well seasoned staff that was created specifically to handle this unique financial niche.

The long delay between the time you perform a medical service and the time you are ultimately paid, coupled with a bureaucratic and very cumbersome third-party billing structure has resulted in diminishing your business cash flow. Our mission is to provide capital to a nationwide network of healthcare providers including, but not limited to sole practice physicians, group practice physicians, nursing homes, hospitals, home healthcare companies, rehabilitation -physical therapy companies, durable medical equipment providers, MRI, radiology centers, ambulance service providers and laboratories. While many industries are very familiar with the use of accounts receivable financing to improve the consistency of their cash flow and increase their bottom line, the overwhelming majority of health care providers have never heard about this service, and do not realize what accounts receivable financing can do for them.

Frequently asked questions about our healthcare provider financing program

Our Clients:

- Too new to obtain bank financing (under 3 years old)

- Needs accounts receivable financing for payroll

- Needs expansion and/or working capital

- Needs acquisition financing

- Growth strategies, including new facilities

- Restructurings, DIP and post -bankruptcy financings

Asset Based Revolving Line of Credit Terms

Minimum of $500,000 of eligible receivables based at NRV. Receivables must be payable by Commercial Insurance companies, Medicare-Medicaid, Blue Cross-Blue Shield, HMO-PPO, Municipalities and Institutions aged no more than 150 days from the service date. Terms are 1 year minimum. Rates and fees may be fixed fee financing or prime based. Typical 4 to 6 weeks from receipt of initial underwriting package.

Mainstream Accounts Receivable

The "mainstream" types of accounts receivable that we will consider for funding are accounts receivable which are generated by a healthcare service company and are due from third party payors which include the following payor categories: Medicare, Medicaid, Commercial Insurance, Private Insurance, HMO/PPO, and Managed Care. The average time to collections for most of the Accounts Receivable that we fund range from 90 - 150 days (we will also consider receivables which collect in longer time periods). Request a proposal online

Accounts Receivable Which Are Non-Mainstream, But Are Acceptable:

We will also consider funding accounts receivable whereby the payors are actually healthcare facilities themselves, such as a nursing home or a hospital, whereby the healthcare provider client is contracting to provide its services to the healthcare facility. Other types of accounts receivable that we will consider funding on a case by case basis may include the following: non-litigation worker's compensation. Request a proposal online

Accounts Receivable Which Are Not Acceptable:

We presently do not fund accounts receivable that are owed by patients directly (also known as self-pay). In addition, we do not fund certain types of longer turning worker's compensation, personal injury, or no-fault accounts receivable.

Nurse Registry (Medical) Temp Staffing Receivables Factoring:

We currently can establish factoring programs for temporary employment staffing agencies for as little as $5,000 to 10 million a month volume. Temp-Staffing businesses generate commercial receivables and fall under our commercial receivables program so long as the receivables are not owed by Medicare, Medicaid or individuals. New business start ups are welcomed. Request a proposal for Medical Temp-Staffing Factoring

Factoring Government Contract Receivables

We know your government contract cash flow problems.

- Big contracts use up all your operating capital and pay net 30 to 60 days later.

- Cash flow shortages in weekly payroll and fixed overhead.

- Passing up new contracts and sometimes can't even fulfill the ones you have on hand.

At 1st Commercial Credit, we can provide immediate funding for your business. The invoices to your customers for goods delivered or services rendered can be converted into a "Business Credit Line" from which you may draw cash to better manage your business.

We have experience in financing receivables to companies whose primary business is performing technical services or manufacturing for the federal government. Technical service companies may include those that provide computer-related services, communications systems, computer systems maintenance, programming support, facilities management, logistics, engineering, and military related products, temporary staffing, distributors and other types of manufacturers.

The most common problem that businesses find in trying to find funding for government receivables:

Most factoring companies do not want to fund receivables that contain high concentration in a few customers which is very common in the government contract industry. One recent transaction funded in the range of $736,000 for just one invoice.

Some receivable finance companies do not have the knowledge in dealing with government receivables. We have specialized experts that are familiar with the "Assignment of Claims" which is a federal law which allows and specifies the procedures for assigning financial rights to invoices of government contractors. The Federal Acquisition Regulation (FAR) also governs how we carry out our responsibility for effecting the assignment.

Any Business can qualify for a factoring receivables credit line if:

- Any Business can qualify for a factoring receivables credit line if:

- Sell credit worthy businesses or local, state or federal agency so long as a notice of assignment is accepted.

- Have not pledged accounts receivable as collateral.

- You have completed the work or delivered the product and your customer has accepted the invoice.

What kind of government contractors come to us for funding?

- Young companies experiencing growth and need cash today. In most cases they have been turned down by traditional bank loans due to a lack of a financial track record.

- Companies that are experiencing lack of service from another factoring company.

- Mature companies that have capped their working credit line established by a bank and need more leverage. This situation may require to pay the financial institution off so the client can establish an unlimited factoring credit line that will be based on the customer's credit worthiness.

Is your business growing faster than your operating capital?

Facility Structure	Collateral Accepted	Industry	Funding Type	Min and Max Monthly Volume	Country
Business and Finance	Account Receivable	Trucking	Invoice Factoring	$10,000 to 25 million	USA, CANADA
Business and Finance	Account Receivable, inventory, Real Estate	Trucking	Asset Based Line of Credit	2.0 million to 25 million	USA, CANADA
Business and Finance	Account Receivable	Temporary Staffing	Invoice Factoring	$10,000 to 25 million	USA, CANADA
Business and Finance	Account Receivable	Temporary Staffing	Asset Based Line of Credit	2.0 million to 25 million	USA, CANADA
Business and Finance	Account Receivable	IT Consulting	Invoice Factoring	$10,000 to 25 million	USA, CANADA
Business and Finance	Account Receivable	IT Consulting	Invoice Factoring	2.0 million to 25 million	USA, CANADA
Business and Finance	Account Receivable	Hospitals	Invoice Factoring	100k to 25 million	USA
Business and Finance	Account Receivable	Medical Physicians Practice	Invoice Factoring	50k to 25 million	USA
Business and Finance	Account Receivable	Transportation	Invoice Factoring	$10,000 to 25 million	USA, CANADA
Business and Finance	Account Receivable	Nursing Homes	Invoice Factoring	50k to 25 million	USA
Business and Finance	Account Receivable	Cable Installation and Telecommunications	Invoice Factoring	50k to 10 million	USA Only
Business and Finance	Account Receivable	Air Conditioning and Heat Maintenance	Invoice Factoring	$10,000 to 25 million	USA, CANADA
Business and Finance	Account Receivable	Advertising Company	Invoice Factoring	$10,000 to 25 million	USA, CANADA
Business and Finance	Account Receivable	Aerospace Repair	Invoice Factoring	$10,000 to 25 million	USA, CANADA
Business and Finance	Account Receivable	Environmental Measuring Service	Invoice Factoring	$10,000 to 25 million	USA, CANADA
Business and Finance	Account Receivable	Computer Manufacturer	Invoice Factoring	$10,000 to 25 million	USA, CANADA
Business and Finance	Account Receivable	Packaging Manufacturer	Invoice Factoring	$10,000 to 25 million	USA, CANADA
Business and Finance	Receivables, Inventory	Moving and Storage	Asset Based Line of Credit	2.0 million to 25 million	USA
Business and Finance	Receivables, Inventory and Real Estate	Agricultural Equipment	Asset Based Line of Credit	2.0 million to 25 million	USA
Business and Finance	Receivables, Inventory and Real Estate	High Tech Temp Agency	Asset Based Line of Credit	2.0 million to 25 million	USA
Business and Finance	Receivables, Inventory and Real Estate	Business-Critical Printers	Asset Based Line of Credit	2.0 million to 25 million	USA
Business and Finance	Receivables, Inventory and Real Estate	Telephone Answering Devices	Asset Based Line of Credit	2.0 million to 25 million	USA
Business and Finance	Receivables, Inventory and Real Estate	Linens for Waterbeds	Asset Based Line of Credit	2.0 million to 25 million	USA
Business and Finance	Receivables, Inventory and Real Estate	Forrest Products	Asset Based Line of Credit	2.0 million to 25 million	USA
Business and Finance	Receivables, Inventory and Real Estate	Apparel	Asset Based Line of Credit	2.0 million to 25 million	USA

What to Look for in a Factoring Company?

There are six major attributes you should look for in choosing the right factoring company for your business. A successful factoring company should have a quality credit department, a professional collection staff, a long track record, industry specialization, financial strength, and up to date technology in keeping their customers informed with real time data.

Unlike a bank or a finance company, a factoring company has a day-in, day-out relationship with its client, so choosing the right factoring company boils down to who can you get along with. Sometimes, the answer to this question is the factoring company with the lowest discount fee and sometimes it will be the factoring that meets some other need better than the one with the lowest fee. Ultimately, determining the overall cost can prove difficult, so you might want to consider other important variables. In the final analysis, factoring is not a commodity item like a mortgage loan. There are many variables besides just the stated discount fee that will come into play when selecting the factoring company best suited to your company’s needs. These distinctions are seldom pointed out in the factoring proposal, so here’s your opportunity to pick the perfect factoring company for you.

Does the factoring company have a credit department?

A factoring company that has a great credit department, for example, might be your pick if you are looking for a factoring company that will help you make prudent credit limits for your customers. A factoring company that does not have a fully staffed credit department, likely will not approve appropriate limits and as a result, may expose your company to inappropriate levels of risk. On the other hand, a factoring company that doesn’t approve enough credit to accommodate your needs may unnecessarily restrain your company’s ability to grow.

Does the factoring company have a collection department?

On the other hand, a factoring company with a fully staffed collection department might be your pick. Most factoring companies assign the task of collections to the account representative. It might surprise you to learn the many factoring companies don’t even have a collection department. If you are serious about finding a factoring company that takes its job of collecting receivables seriously, the factoring company will assign two points of contact to you—an account representative AND a collection specialist (accounts receivable management). One person cannot perform both functions as well as two.

Does the factoring company have a long track record?

A factoring company that has been in business more than ten years likely has the experience you need to provide an adequate level of service. A factoring company that has weathered multiple business cycles demonstrates staying power, but not necessarily solid capitalization. If in doubt, ask your factoring company or a factoring company you are talking to for bank references or a thumbnail sketch of their financial condition. Most importantly, ask your factoring company for client references—preferably clients in your industry.

Is the factoring company a specialist in your industry?

You may be looking for a factoring company that knows your industry. Industry specialization is extremely important. If you own a trucking company, you should seek out a truck factoring company –in other words, a factoring company specialist for trucking and transportation. For example a trucking factoring company will be familiar with your freight brokers and shippers, because likely, a truck factoring company will already have its own first-hand experience with tens of thousands of freight brokers. If a truck factoring company already knows your customers, you will save money, because you won’t have to spend money on credit reports.

If you own a staffing firm, you should be considering a staffing factoring company or a factoring company commonly referred to as a full service factoring company that not only can provide you with traditional accounts receivable factoring, but also many back office functions such as payroll checks, payroll deposits, payroll reporting, payroll software, invoicing and invoice mailing. Often, full service factoring (companies) for staffing firms provide all these services under one roof and for one fee. Sometimes the factoring company will outsource some back office functions to an affiliate or strategic partner with greater expertise. These third-party arrangements are common and perfectly acceptable, provided the client is informed about all work that is outsourced to third parties and the client approves.

Is the factoring company the right size for your company?

You might be interested in a small or a large factoring company, depending on your philosophy. Your best bet may be a factoring company that is somewhere in between—small enough to provide personalized service and access to top management, but large enough to provide financial stability, the ability to accommodate your needs, and the ability to weather tough economic times.

A factoring company that sends an executive officer, or top manager out to visit you may be of interest to you. Very few factoring companies do so. If it is important for you to know who you are dealing with, ask the factoring company you are talking to if they will send an officer or top manager out to visit you. A very large factoring company likely will not be able to comply with such a request (unless they are located right down the street). If you are lucky, you might get a visit from a salesman. It is unlikely that the factoring company that sends a salesman to visit you will give that salesman any operational authority, so it’s best if you can get an executive, officer, or top management person.

A factoring company that is too small may not have the financial resources to satisfy your needs or may be too conservative in making decisions that effect your business. A factoring company that is too small may be too restrictive on which of your customers they will approve and for how much. A small factoring company also may not have the capital to purchase all your receivables.

Does the factoring company embrace technology?

More and more, clients are demanding factoring companies to provide them with the most technologically advanced reporting systems. You may want to avoid a factoring company that does not provide access via Internet to your factoring data. You may also seek out a factoring company that allows you to obtain credit decisions on line via Internet. A factoring company that embraces new technologies will ultimately save you money. For example, if you have to send all your invoices and a full set of copies to your factoring company via overnight courier, you are probably picking up the tab. If your factoring company can accept digital copies via e-mail or can scan your originals, your packages will be less costly to send. A factoring company that can handle your customers’ EDI system is also a plus.

In summary, there are numerous variables to consider when selecting a factoring company. Sure fees are important, but often, the Devil is in the details. Ask lots of questions. Here are a few questions we have addressed in this article:

1. Does the factoring company have a credit department?

2. Does the factoring company have a collection department?

3. Does the factoring company have a long track record?

4. Is the factoring company a specialist in your industry?

5. Is the factoring company the right size for your company?

6. Does the factoring company embrace technology?

If you feel that your business would benefit by setting up an account receivable factoring program.