What is Factoring?
Factoring is a process that helps a business improve cash flow by selling reliable accounts receivable at a discount. It is a viable method of building working capital without taking on an equity partner or adding new debt. Factoring can serve as an additional source of capital when combined with bank credit lines currently in place.
How Does Factoring Work?
Advantage Business Capital purchases your accounts receivable and advances up to 90% of verifiable invoices. The balance of the invoices, less our discount, is paid to you after we receive payment from your customer. Funds are typically available within 24 hours of request.
What Does Factoring Cost?
There are no upfront fees or maintenance costs when you use Advantage factoring services. The only fee you pay is a discount fee for each invoice factored. This fee depends on the monthly factoring volume, the creditworthiness of your customers and the length of time expected to be paid. Advantage, one of the most trusted factoring companies in Houston, offers both fixed and floating fee structures to meet your specific needs.
What is My Obligation?
There are no long-term contracts or agreements. You choose which accounts to factor, and you may discontinue the service at any time.
What Collateral is Required?
The only collateral typically required for a factoring line is your company’s accounts receivables.
What Types of Companies Qualify?
Qualifying companies must provide a product or service to creditworthy commercial customers while offering 30- to 60-day payment terms. Advantage reviews your customers’ financial strength and payment history.
How Do I Know the Invoices Are Paid?
Advantage’s state-of-the-art software program provides a timely, detailed report on each invoice payment. These reports, along with copies of their respective checks, are available the same day, online.
How Long Does Approval Take?
After an application and related documents are received, client approval and initial funding take approximately 2-5 days. Subsequent funding is typically made within 24 to 48 hours.
What Benefits Does Factoring Offer?
- Turn Accounts Receivable More Quickly While Improving Cash Flow
- Reduce Costs Associated with Credit Losses, Credit Research and Bookkeeping
- Maintain a Healthy Balance Sheet
- Provide Operating Capital Without Additional Debt
- Increase Inventory
- Meet Unexpected Cash Demands and Off-Cycle Expenditures
- Commit Confidently to Large Orders
- Take Advantage of Vendor Cash Discounts
- Improve Credit Status for Traditional Financing
- Stay Current on Tax Deposits
How Do I Get Started?
Contact Advantage Business Capital at 832.485.2385 with any additional questions, or to get the ball rolling. You may also visit their website, advantagebusinesscapital.com. To expedite the process, have the following information available:
- Current Accounts Receivable Aging (showing pay history, if available)
- Customer List Showing Complete Names and Addresses (if not listed on aging)
- Current Financial Statements (last year-end and most recent interim)
Please Note: Additional documentation may be requested prior to funding.