1. WHAT IS A FACTORING COMPANY?
A commercial finance company that specializes in the purchase of invoices for cash from its clients who, in turn, have under 90-day quality receivables. The Factor uses those receivables as its collateral to provide its clients with earlier access to money. the factor also does credit checks, collections and provides live AR listings to help clients save time running thier business.
2. WHAT STEPS ARE REQUIRED BEFORE FUNDING?
After you complete our CLIENT APPLICATION, we check credit, do legal searches and register securities, draw and have legal documents signed, obtain clients' invoices with confirmed proof of delivery or completion of services.
3. IS FACTORING A TYPE OF LOAN?
NO! Factoring is the purchase of a client's company receivables using those receivables as collateral. It is not a loan.
4. WOULDN'T A BANK LOAN MAKE MORE SENSE?
Banks often have restrictive lending requirements relating to cash flow, ratios, profitability and years in business. These restrictions often prohibit them from making certain loans. Indeed, many bank officers suggest that their clients contact a factoring company. Factoring companies are not in the lending business, and the decision to purchase invoices is influenced by the quality of the customer base and the performance of client's customer's — not the client's own qualifications.
5. WHO IS THE CLIENT (VENDOR) AND WHO IS THE CUSTOMER (DEBTOR)?
The client requires the factor's funding while the clients' customer buys the goods or services from the client and repays the factor directly.
6. IF A FACTOR BUYS A CLIENT'S INVOICES, WHO ACTUALLY BILLS THE CUSTOMER?
Clients prepare their customer's invoice and forward it to the factor for an immediate cash advance. The factor bills the invoice to the customer and then follows up on it to ensure receipt of payment.
7. HOW ARE THE FEES FOR FACTORING SERVICES DETERMINED?
Although Money on Tap -iFactoring is very aggressive, and its rates are the most competitive, fees do vary from company to company and for client to client. They are determined by a combination of the credit worthiness of the clients' customer base, average terms, invoice number and size, the factoring volume and the perceived profile of clients.
8. WHAT ARE SOME OF OUR FAVOURITE INDUSTRIES?
Trucking, transportation, temporary staffing – personnel, apparel, cleaning, distributors, eyewear, furniture, gifts, importers / exporters, manufacturers, printing, signage, and so much more.