Working With Business Factoring Companies

Use US factoring companies to help you build your business

Your accounts receivable are a valuable part of your business; you can sell them to factoring businesses who will give you a percentage of the total up front and the balance -- minus a fee -- after they receive the money from the customer. There isn’t any waiting to get the payment from your customer and no need to seek a loan. Best of all, if you’re a new business, your customer’s credit is the basis, instead of yours.

Working with business factoring companies means understanding the advance you’ll receive, the fees involved and the final amount you’ll get. You also need to select invoice factoring companies that’ll let you choose which invoices you want to factor and the length of time you’re committed to factoring them.

You can try to locate an invoice factoring directory, which will help you make these decisions, or consider the following when working with business factoring companies:

1. Select a factoring company that will pay you the largest percentage of your accounts.

2. Find an accounts receivable factoring company that has a low fee.

3. Choose a small business factoring company that specializes in buying invoices from small businesses.

4. Check out national factoring companies that guarantee 24-hour financing.

 

Locate a factoring business that gives you the most up-front money

Companies offering factoring services advance you anywhere from 65% to 97% of your receivables. When you are working with business factoring companies, be sure the company is offering an advance up to at least 90%. This will give you more up front money for whatever you need.
Try: Olympic Credit Fund, established in 1991, offers up to 97% advanced rates. Fostrian Business Capital provides working capital to emerging businesses unable to arrange bank financing. It offers up to 90% advanced rates. Commercial Finance Group caters to businesses that don’t qualify for bank financing and gives advances up to 90%.

Choose a business financial factoring company that charges a low factoring fee

US factoring companies have fees as low as 1% and as high 5% of your receivables. Select a factoring company that charges 2% or less in order to find the best prices for your factoring needs.
Try: If you are a small or mid-size business, try Commercial Capital. Your advance may be as high as 90% and your rate could be as low as 1.5%. Inzap, founded in 1999, advances the full amount of receivables minus their fee, which is usually 2%. It caters to small businesses. Advanced Commercial Capital specializes in 24-hour funding and offers low fees and high advances.

Find an accounts receivable factoring company that caters to small businesses

Factoring companies that specialize in factoring to small businesses are more likely to give you more personalized service, better rates and higher advances. Find the one that will service all your needs.
Try: Rexford Funding's account executives have offered small businesses factoring for more than 30 years. Farrago Capital caters to small businesses and has more than 20 years combined experience in factoring. 1st Trust Factoring specializes in small business factoring and offers up to 90% advanced rates.

Select a factoring company that guarantees a speedy turnaround time

Some factoring businesses assure you of a fast turnaround time. Find one that offers this service to see if it meets your other requirements as well.
Try: Riviera Finance is a nationwide company that guarantees 24-hour funding. It’s been in business for almost 40 years. New Century Financial, founded in 1985, caters to small and medium businesses and guarantees 24-hour funding. Porter Capital specializes in providing working capital overnight. It’s been in business since 1991.

 

• When working with business factoring companies, you need to understand whether the accounts receivable factoring company you picked uses recourse or non-recourse. Recourse means that the factoring company can sell the invoice back to you if no one pays it within a certain amount of time. With non-recourse, the factoring company absorbs the loss.

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