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Invoice Factoring
Rate Benefits
Is Invoice Factoring
Company For You
How an Invoice Factoring Rate Works
On-Line Factoring Rate Request
Form
Factoring Home Page
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We Can Offer You What Others Can't
Unlike other
invoice factoring companies, our program includes the following features at
no additional charge:
24 hour funding on approved
invoices
Highest advance rates in the industry
Credit analysis on new
and existing customers
Continuous collection management and follow up on
factored invoices
Invoice and statement mailing (postage included)
Account status inquiries anytime; 24/7 online account access.
Our flexibility allows you to maintain control:
You select accounts you prefer to
factor on an invoice by invoice basis.
You control total factoring costs by
only factoring on an "as needed" basis.
Up
to 97% Invoice Factoring Advance Rates:
Advance rates are based on overall risk
associated with a particular industry as well as experience and track record. We
hold reserve accounts to accommodate industries which typically experience
dilution and that we would otherwise not be able to service. Advance rates range
from 80% to 97% of the gross invoice amount.
Invoice
Factoring Rate Fee Structures:
Fees are determined based on your
industry, the credit worthiness of your customers, how quickly your invoices
turn, and monthly factoring volume.
To
learn more,
Please contact
one of our
regional offices
at
866-593-2195
admin@factormoney.com
On-Line
Invoice Factoring Rate Request Form
Invoice Factoring
Rate Website
We are
currently invoice factoring nationwide including the following states: Alabama,
Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida,
Georgia, Hawaii, Idaho State, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi,
Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New
York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode
Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,
Washington, West Virginia, Wisconsin, and Wyoming.
What is Invoice Factoring ?
Cash flow is one of the
main reasons businesses fail. At one time or another, every business, even
successful ones, have experienced poor cash flow. Cash flow does not have to be
a problem any more. Do not be fooled -- banks are
not the only places you
can get funding. Other solutions are available and you do not have to borrow.
One solution is called invoice factoring. Factoring is
the process of selling invoices to an
investor rather than waiting to
collect the
money from the customer.
Oh,
the Irony
Invoice Factoring has an ironic
distinction: It is the
financial backbone of many of America's
most successful businesses.
Why is this ironic? Because invoice factoring
is not
taught in business colleges, is seldom mentioned in business financing plans and
is relatively
unknown to the majority of American business people. Yet it is
a financing process that frees up billions of dollars every year,enabling
thousands of businesses to grow and prosper.
Invoice
Factoring has been around for thousands of years. Factors are investors who
pay
cash for the right to receive the future payments on your invoices.
An unpaid receivable or invoice has value. It is a debt your customer has
agreed to pay in the near future
Is an Invoice
Factoring Company For You?
The key to knowing if
factoring is for you is to not to look only at the bottom-line invoice factoring
fee, but also to consider how your company may increase
its profits through
factoring.
Is Invoice Factoring For You?
The key to knowing if factoring is for you
is to not
to look only at the bottom-line factoring fee, but also
to
consider how your company may increase it's profits through
factoring.
Here is additional information on
factoring
to help you with your decision.
How are fees and advance
invoice factoring rates determined?
It is based on several factors:
The creditworthiness
of your clients
Your monthly billing volume
Average invoice
size
Average days to payment
Fees can range from 2-5 % of the invoice's
face value.
For example if the invoice's value is $1,000; a fee of 3% equals
$30.
What is an invoice factoring rate advance?
The amount of money you receive immediately
when we
buy your invoice. The balance is returned to you when
your
customer pays the invoice.
Advances range from 60-95% of the invoice's face
value.
For example if the invoice's value is $1,000 an advance
rate of
80% equals $800. The balance of $200 less the
factoring fee is returned to
you when your customer pays the invoice.
Comparing Bank Lending Rates
to Invoice Factoring Rate?
When compared to bank lending rates, factoring
initially appears to be very expensive. Here are five typical
questions/concerns that are raised by potential factoring clients
- Wow! 3 points per month! That's 36 percent year!
It is tempting to
annualize the numbers, but that is an "apples and oranges" comparison.Banks loan
money at an annualized interest rate, 12 percent per year for example. We
purchase your receivables at a discount. The products are different and there
are other inconsistencies to this inappropriate comparison
The bank
provides the money only one time, the day that you receive the loan; we provide
money continuously. As an example, consider a bank loan for $100,000 at 12
percent. You receive the $100,000 just one time and then pay $1,000 interest per
month interest and you still owe the $100,000. Or the bank could provide you
with a line of credit that you use only when you need the money but the bank is
charging you for that privilege and if you need to increase your line you need
to go through the qualifying process all over again.
When you factor
$100,000 each month for a year you have the use of $1.2 million (12 x $100,000)
over the year. Unlike a bank loan where you have just $100,000 one time.
Assuming a 3 point discount, the fees over the year will be 12 x $3,000 or
$36,000, which is still 3 percent of $1.2 million. And at the end of the year
you have no debt!
- I'm only making 3% profit, how can I pay you 3 points?
A company
making only 3% net profit can do more business volume as a result of factoring,
and the larger volume will result in a higher profit margin because fixed costs
do not increase with volume. The added business at a higher marginal profit
leads to an increased overall profit margin. As the volume increases, the cost
of production decreases, so that profits increase. Fixed costs i.e., rent,
electric, insurance, etc., increase very little or not at all with volume. An
increase in business will not affect rent. Electric bills may rise slightly.
Workers compensation insurance may rise slightly. These costs do not increase as
do direct production costs.
Let's graphically do the math assuming you
can double your sales
Without Invoice Factoring
| Monthly Gross Sales |
$50,000 |
|
| Cost of Goods Sold |
$30,000 |
60% of Gross Sales |
| Monthly Gross Profit |
$20,000 |
40% of Gross Sales |
| Fixed Expenses |
$10,000 |
|
| Variable Expenses |
$8,500 |
17% of Gross sales |
| Factoring Fee |
N/A |
|
| Total Expenses |
$18,500 |
37% of Gross Sales |
| Monthly Net Profit |
$1,500 |
3% of Gross Sales |
With
Invoice Factoring
| Monthly Gross Sales |
$100,000 |
|
| Cost of Goods Sold |
$60,000 |
60% of Gross Sales |
| Monthly Gross Profit |
$40,000 |
40% of Gross Sales |
| Fixed Expenses |
$10,000 |
|
| Variable Expenses |
$17,000 |
17% of Gross Sales |
| Factoring Fee |
$3,000 |
3% Fee |
| Total Expenses |
$30,000 |
30% of Gross Sales |
| Monthly Net Profit |
$10,000 |
10% of Gross Sales |
- But I only get 80% of my money upfront!
Let's assume an advance
rate of 80%. Let's also assume that you begin factoring in January. You have
factored $100,000, we pay you $80,000 of that money upfront, with the remaining
money making up the fee (3%) of $3,000 and the reserve (17%) of $17,000.
Now
in February, you once again factor $100,000 and receive $80,000. However. you
also receive your January reserve of $17,000(assuming your customer pay in 30
days). So for February, you actually receive 97% of your money, instead of
80%.
In the second month and going forward you are basically receiving 97% of
your cash flow.
- But what if my customers take longer than 30 days to pay?
You have
several options, Assume your client takes 60 days to pay you bill your client in
the normal fashion and simply allow 30 days to go by prior to factoring that
invoice. That way you pay the 30 day fee.
Another way is to factor your
faster customers first for the cash you need.
To find out how we might structure
a factoring deal for you, please complete our
On-Line
Factoring Request Form
To
learn more,
Please contact
one of our
regional offices
at
866-593-2195
admin@factormoney.com
On-Line
Invoice Factoring Rate Request Form
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Are
We Crazy?
Use No Other
Invoice Factoring Company
Until You
Have Seen
Our Sensational Plans
including unique 97%
Advance Rates
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