Advantages of Factoring

Advantages of Factoring

Some of the more common advantages of Accounts Receivable Factoring include:



  1. 24 hour electronic funding in US or Canadian Dollars are made after the required documents are supplied.

  2. Because we are an international company over 200 years old, there are massive cash resources available.

  3. $5 million maximum outstanding per client at any one time provides immediate injection of working capital.

  4. There is NO time based contracts or minimums required although most factors start above $50,000 pm.

  5. The client is free to choose which ever customers and invoices it wants to factor at any time. The more invoices factored, the lower the rate. Clients are never obligated to factor any fast (under 15 day) paying customers. Discounts apply for all fast payers.

  6. The factor does not concern itself solely with the credit of the client, but looks closely at the spread of its clients’ credit approved customers.

  7. Professional credit checking and collections are done. Credit is either “a scientific art” or “an artistic science” and because the credit department may give a certain credit limit, does not mean that payment (without insurance) is guaranteed. Good customer credit checking prevents clients’ losses.

  8. Collections are often done a lot faster & more efficiently by the factor than directly by the client.

  9. Spot factoring – the purchase of individual invoices, is also available, giving clients great flexibility. Spot confirmations are rare and often done as a PR exercise.

  10. The factor can provide a letter of undertaking FREE of charge to the client’s North American suppliers stating that payments can be made directly by the factor to the client’s supplier within 24 hours of delivery or completion of the service with its customer or debtor.

  11. Set up of new accounts is a lot faster than banks which may often take over 6 weeks initially.

  12. Hands on management, after sales service, including short term loans to purchase AR generating assets.

  13. Monthly aged accounts receivable listings are provided free of charges electronically through the web.

  14. Feedback from confirmations done by the factor, are given timeously for the benefit of the client.

  15. Our clients’ customers often prefer that they are factoring which is NOT evident on the client’s financials and there is no dilution of equity.

  16. Voluntary credit protection / insurance can be arranged for the client.

  17. Major cost reductions can be effected for the client by funding part way into the due date period. e. g. Instead of funding on day 1, the client asks the factor to make payment later on the 45th day thus reducing the cost of factoring substantially.

  18. The cost of factoring can be set off against many advantages of supplier discounts, the client’s ability to always make payroll on time, tremendous increases in sales by being able to extent terms to customers.

  19. We explain how and why customers are requested to sign the factor’s assignment letter agreeing to pay the factor instead of the client – thus protecting the client.

  20. We do not take mortgages on property or leases on equipment. We are only concerned about the quality of your well spread under 90 days credit approved company receivables.