Products | Receivable Factoring
Are you looking for information or quotes on factoring receivables?
Factoring receivables (or invoice factoring as it can be called) is an excellent way to unlock the cash your company possesses in its unpaid invoices. Unlocking your cash flow in this manner leaves you in a healthier financial position to take advantage of opportunities, allowing you to take your company to the next level.
If you are interested in a factoring receivables quote then click here to get invoice factoring quote from Americus Credit group.
How does invoice factoring work?
Factoring works as follows: The factor fully manages your sales ledger and provides you with credit control and collection services of all your outstanding debts. The invoices you issue upon a sale are sent to the factor who typically advances up to 80 to 90% of the invoice amount to you. The balance, less charges, is paid when the customer makes payment directly to the factor. The service is disclosed to your customer who typically receives a letter from the factor, or attached note to your invoice, containing payment instructions to the factor.
Funds are typically released to you within 24 hours of issuing the invoice.
There are typically two costs involved: a service charge expressed as a percentage of sales factored and an interest charge for the cash advances. The service charge, covering sales ledger management, collections services and, if you wish, bad debt protection can range between 0.60% and 3.0% of turnover. The main considerations in determining the service charge are your annual turnover, number of invoices and number of customers. The interest charges calculated on the daily usage of funds is typically comparable to normal secured bank overdraft rates.
The advantages of invoice factoring
Funding is flexible and linked to your current and future trading levels and needs. This is in contrast to traditional finance, which is based on historical balance sheet ratios. You can plan ahead more confidently, because you know that a fixed percentage of monies invoiced out will actually be available at any given time.
Extra up-front finance gives you extra bargaining power in dealing with suppliers. You can take advantage, for example, of bulk purchase, or prompt payment discounts.
Access to credit ratings allows confident trading with new enquirers, ensuring that your hard work attracting customers is not wasted through bad debts. Professional credit control gives speedier cash flow, providing freedom to grasp business opportunities.
At any time to receive a quotation based on your business’s projected activity. Please call 323-936-0555 ext. 11, or fill out a request for proposal, and we will respond promptly.