|
Factoring
is the sale of accounts receivable or invoices at a small
discount to obtain immediate cash. Factoring gives businesses
the ability to ensure growth without diluting equity or
incurring debt. Factoring is one of the oldest forms of
commercial finance and is used extensively both nationally and
internationally.
Factoring is NOT a loan. No money is loaned and no
interest is paid or earned. Instead, the factor receives a fee
for its services. Those fees are based on the dollar amount of
the accounts receivable purchased. A main difference between
factoring and a bank loan is in factoring you use your
customers’ credit strength not yours as support for funding
versus a bank loan which is typically based on your assets,
equity, profitability, cash flow and liquidity, thereby limiting
the amount of funding. Under a factoring facility your available
funding is virtually unlimited, which allows you to meet
operating demand and provide for future expansion.
At
USAFG, our factoring solution allows businesses to leverage up
to 100% of their accounts receivable with typical advance rates
between 70 - 85%. It covers industry lines such as temporary
staffing, manufacturing, distribution and transportation. Our
pricing is based upon the credit strength of the debtor’s
factored, collateral administration and financing volume.
|
