Frequently Asked Questions
What Is Invoice Factoring?
Invoice Factoring is a financial transaction in which your company sells its creditworthy invoices at a discount for immediate cash. Factoring is NOT borrowing, so there are no monthly payments to make and no additional debt to carry on your company’s balance sheet.
How Does It Work?
After establishing an account with BUSINESS FINANCE CORPORATION, you present those invoices you want to factor. After processing, the money is deposited into your account. Funding can usually be provided within 24 hours.
How Much Money Can I Get For My Receivables?
Your business will be approved for a monthly invoice factoring amount. You can factor invoices up to that amount. Typically we will advance from 70%-80% of an invoice, with the balance held in reserve until the invoice is paid.
What Does Factoring Cost?
The typical factoring transaction costs 3%-5% of the invoice amount sold, essentially comparable to the costs of a merchant credit card account. There is also a small setup fee and a monthly maintenance fee.
Are There Monthly Minimum Factoring Amounts?
No, you are not required to factor a minimum amount of invoices each month. You sell us only the invoices you want to factor, when you want to factor them. It is your business decision, based on your business cash flow needs.
What If My Business Can’t Qualify For A Loan?
Factoring isn’t a loan, so the fact that your company doesn’t have the right “ratios” or that banks have turned you down for a line of credit or working capital loan doesn’t matter. If you have creditworthy business clients, and good receivables, you may be a candidate for factoring.
Will My Clients Think I Am In Financial Trouble If I Am Factoring Their Invoices?
No! In fact having a financing line of capital for your business in this economy is a badge of honor. In many parts of the country, and in many industries, factoring is a routine and commonly used method of asset based financing. It does not reflect badly on a business at all, and in fact it demonstrates to your clients that you actively and aggressively manage your business and your cash flow.
How Will Business Finance Corporation Treat My Clients Whose Invoices I Have Factored?
In any contact we may have with your clients, such as verifying that invoices are correct or following up on a late payment, they will be treated with the utmost respect, and in some cases, may not even know that they are not dealing directly with your company. We want your clients to be happy. Happy clients pay their bills.
What If My Client Doesn’t Pay An Invoice That I Have Factored?
We can discuss the disposition of an unpaid invoice with you. Your reserve account may have enough funds to cover a seriously delinquent invoice. In other cases, you might replace it with an unpaid invoice from another client. You can then take whatever collection steps you wish with your client, or if you prefer, we can assist you.
How Do I Find Out More Information And See If My Business Qualifies?
Fill out and submit the “Let’s Get Started” form below, or call (702) 947-3800 to set up an appointment.