WE AREN'T ESPECIALLY CONCERNED ABOUT YOUR CREDIT
Factoring is an arrangement whereby a business that supplies goods or services to its customers on credit (for example, payment due 30 days after delivery) assigns, by way of legal assignment, its current (not past-due) accounts receivable to a finance company (factor) at a discount. This transaction is similar in effect to an asset-based loan secured by a borrower's accounts receivable, with the following material differences:
This type of transaction enables a business to monetize its receivables immediately, increasing its available working capital in exchange for taking a small discount to the value of the receivables.
Invoice Factroing takes place when a Business Client sells its Invoice to a Factor ( Funding Source ) at a Discount for Immediate Funds.
After The Factor provides Advance Funding to the Business Client it then waits on terms from the Business Client's Customer for Settlement.
After Settlement has been made, The Factor Pays the Business the remaining balance of the Invoice less a small fee for Advance Services.
In Reality factoring is a form of Asset-Based Lending.
Asset-Based Lending takes place when the Funding Source provides a Collateralized Loan to a Business. CHOOSE FACTOR MASTERS !
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