Why do I need it? Your business delivers goods to the end customer. Upon receipt, the end customer is issued an invoice. In order to create liquidity to pay vendors, working capital is needed right away. You can sell your invoice or receivable to us for a discounted fee to access immediate liquidity. Distributors, wholesaler and trucking companies would all qualify for account receivable (AR) financing.
How does it work? Your first step is to submit a valid invoice. Once verified, we advance 70-90% of the invoice to you. Upon payment from the customer, we will net our discount fees, and immediately wire you the balance. You can choose which invoices you want to be factored or elect to get a revolving line of credit against your entire receivable pool. We are flexible based on what is best for your company.
How long does it take? From the time you submit the application and due diligence materials, it takes approximately a week to underwrite and another 1-2 weeks to complete the account debtor notification process. We have funded transaction in as quickly as 14 business days.
How much does it cost? As with PO, the cost varies for each transaction. The monthly percentage is based on:
The creditworthiness of the account debtor
History of payments with account debtor (do they force discounts for late shipments)
Consignment and performance standards in contract with account debtor.
Is it worth it? While there is cost associated to these financing tools, how much more profit could you earn or how many expenses could you save with added liquidity? Usually, the earned revenue is more than the cost of the funds, which is beneficial to any business.