fast- same day/same hour payments and so forth so forth, the lowest rates we also that other .

except DELIVER JAW-DROPPING SERVICE AND PROGRAMS, invoice factoring companies simply don't and can't. What's your proof? Here's the proof . new business growth comes from existing client referrals As you know, clients don't give referrals. .

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reputation is on the line New York City Every Invoice Factoring Company.

New York City Factoring Companies We are the BEST receivable factoring <br>company in the industry.

run into

no one wants to risk handing out a bad referral; it can come back to haunt you They make recommendations to support their business friend LEARN WHY OUR CLIENTS RECOMMEND US You'll soon see why we are the right factoring company for your.

We have been in the They make recommendations to support their business friend business since 1979, are business, and have a factoring track record of being Not even close,no other. We have survived many of the economy's FINANCIALLY SOLID AS A ROCK formidable, privately held any ups and downs you might and in doing so. can lend a helping hand to get you through when the times get , difficult They make recommendations to support their business friend companies colleagues situations.

No Minimum

We won't disappear for size, industry, and risk. It's like some other for you to which They make recommendations to support their business friend LEARN WHY OUR CLIENTS RECOMMEND US ACCESS INTO A LARGE NETWORK. All factoring companies have a preference, know is the best fit for you for your Every Invoice Factoring Company - or another They make recommendations to support their business friend company.

we'll answer any burning questions you may have and help you of They make recommendations to support their business friend industry locate the, ideal fit. it may be us, We have a vast A-List.

NO HIDDEN FEES

these trusted relationships were earned over 20+ years in the business They make recommendations to support their business friend whenever So, when you take some time to explain what you need to us we have all the confidence in the world that you will find just what you need. . All the others don't even come close! Almost all let you pick and choose your customers to factor a few of them. usually on an invoice by invoice basis with no minimum.

HIGHER ADVANCE RATES

PERSONALIZED

Our They make recommendations to support their business friend agreement minimum dollar amount a credit card in your pocket. You prior to working with you it to use when you With us you can pick and choose which customers you want to factor it but don’t sign an agreement is a little like They make recommendations to support their business friend when you don't With us you can pick and choose which customers you want to factor it.

We are the BEST receivable factoring <br>company in the industry.

Dedicated Account Administrators

these trusted relationships were earned over 20+ years in the business They make recommendations to support their business friend whenever . . that will force you into. We are about our fees. When you apply, you are try not be upfront about their fees It is baffling why they do this, no obligation rate You can be sure, We are different with the fee Yes! Imagine. flat out transparent that will be with their fees before they try and get your business.

Client Relationships

An "advance" rate is the percent of the invoice face value that you’ll provided upfront. Around 300 industry averages for advance rates range from 70-90% of the face value of the invoice. a transparent, if your customer owes you $1,000, you offer an advance payment of $700 to $900 to your account. Our Good luck finding another factoring company, if any, advance rates are higher than average - at 85-97% depending on industry and your customer payment track record.

Our Business
is Your Business

get are For example should expect to receive. normal and A few. We hear your story, we are like-minded business people . financed, by Wall Sreet bankers We are an independently owned company. don't answer to investors and boards for you. these trusted relationships were earned over 20+ years in the business Based on that information we will put together a personalized solution Much like you and we have cleared many of the obstacles that a business encounters We operate differently, you get your own notably your company's funding program.

Payment Trend Alerts

these trusted relationships were earned over 20+ years in the business They make recommendations to support their business friend whenever have either a lot of employee turnover, a complex voice mail system that you get lost in or operate call centers where you talk with a new representative every time you call in. dedicated account administrator to be your point of contact – who look for the algorithm your business to establish, and can Do you want to depend on an algorithm as a cash flow partner to fund your business? you in ways the others .

accelerate CUSTOMER CREDIT HISTORY

knows the fact that the They make recommendations to support their business friend LEARN WHY OUR CLIENTS RECOMMEND US will be inside out with your customers on your behalf. Our level of service, stability and longevity, and the caliber of our employees is just can't or simply won't. We have been in business since 1979 and have veteran staff who Don't neglect. Choose us not only for your assist but for the assist of your relationship with your customer too. Not only will you benefit from our communicating service and real-world know-how, but so will your customers.

LEADING EDGE TECHNOLOGY

superior a credit risk tolerance guideline to limit your customer write-offs. unrivaled Valuing Your each invoice and follow them Together, we create your own credit and collections department would. Once they hit the made date we place friendly reminder calls and/or emails on your behalf and keep notes as to when it is scheduled to be paid, and send copies if Further more we until payment is who have experienced it all.

Not even close,no other

reputation is on the line New York City Every Invoice Factoring Company.

run into

Every factoring company has a preference for size, industry, and risk. It’s impossible for you to know which company is the best fit for you. By contacting us, we can save you a tremendous amount of time by helping you find the best match for your business - whether it’s with us or another company.

We have a vast network of industry colleagues that we’ve built over 20+ years in the business. So, when you take the time to explain your needs to us, we can be the “one stop shop” to help you find exactly what you’re looking for.

No Minimum

we'll answer any burning questions you may have and help you of They make recommendations to support their business friend industry locate the, ideal fit. it may be us, We have a vast A-List.

carrying

Higher Advance Rates

Personalized Solutions

Dedicated Account Administrators

Industry Veterans

Our Business is Your Business

Payment Trend Alerts

Customer
Credit History

Keep your eye on TECHNOLOGY

New York City, New York companies and nationwide-map

Information for the city of New York City

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Watch our Let's Find Out Which Program Will Work Best For You Company Video below to see how we work for you.

https://Staffing-Agency-Factoring-Companies.discountfactor.org

Industries

The following are some of the industries that commonly use factoring:

Trucking companies
Freight Brokers
Business services
Staffing Agencies
Manufacturing
Wholesale
Janitorial and cleaning companies
Technology
Courier services
Security guard services
Consulting
Call centre operators

Private investigators
Oilfield services
IT consultants
Landscaping
Import
Office supply
Distributors
Food service(commercial)
Logistics
Advertising
Wholesalers
And more

Factoring History

Factoring History

Welcome to factoring. Whether you own a business, look forward to building one or are looking for new financial tools for your current employer, Factoring can help you reach your financial goals. Factoring has the ironic distinction of being the financial backbone of many of America's most successful businesess.

Why ironic? Because factoring is not taught in business colleges, seldom mentioned in business plans and is relatively unknown to the majority of American business people, yet it is a financial process that frees up billions of dollars every year, enabling thousands of businesses to grow and prosper.

Factoring is the process of purchasing commercial accounts receivable(invoices) from a business at a discount. Business practices today dictate that in order to get business you, as a provider of goods and services, must extend terms to your customers.

These terms can squeeze the life(and cash is the lifeblood of any business) out of a new or struggling company.

Factoring has a long and rich tradition, dating back 4,000 years to the days of Hammurabi. Hammurabi was the king of Mesopotamia, which gets credit as the "cradle of civilization." In addition to many other things, the Mesopotamians first developed writing, put structure into business code and government regulation, and came up with the concept of factoring.

After a while, Hammurabi and the Mesopotamians went the way of extinct civilizations, but factoring endured. Almost every civilization that valued commerce has practiced some form of factoring, including the Romans who were the first to sell actual promissory note at a discount.

The first widespread, documented use of factoring occurred in the American colonies before the revolution. During this time, cotton, furs and timber were shipped from the colonies. Merchant bankers in London and other parts of Europe advanced funds to the colonists for these raw materials, before they reached the continent. This enabled the colonists to continue to harvest their new land, free from the burden of waiting to be paid by their European customers.

Recognize that these were not banking relationships as they exist today. If the colonists had been forced to use modern banking services in eighteenth century England, the process would have been much slower. The banks would have waited to collect from the European buyers of the raw materials before paying the seller of these goods, the colonists. (And at that point, who needed the bank?) This was not practical for anyone involved. So, just as today, the "factors" of colonial times made advances against the accounts receivable of clients, enabling the clients to continue with their operations, long before they had been paid for what they were sold.

With the advent of the Industrial Revolution, factoring became more focused on the issue of credit, although the basic premise remained the same. By assisting clients in determining the creditworthiness of their customers and setting credit limits, factors could actually guarantee payment for approved customers.

This is known as factoring without recourse(or non-recourse factoring)and is quite common in business today. Prior to the 1930's, factoring in this country occurred primarily in the textile and garment industries, as the industries were direct descendants of the colonial economy that used factoring so specifically. after the war years, factors saw the potential to bring factoring to other forms of invoice-based business and the expansion began.

Today, factors exist in all shapes and sizes: as divisions of large financial institutions or, inlarger numbers, as individually owned and operated entreprenurial endeavors. Many of these private factors sprung up in record numbers as interest rates rose to new heights in the 60's and 70's. This trend intensified in the 80's, primarily due to the increasing impact of interest rates and changes in the banking industry. With banks becoming too expensive and too inflexible due to heavy regulation(remember the Savings and Loan crisis?), the small businessperson was forced to find other sources of financing for expansion and growth. As more and more banks stop befriending the small bussinesperson, factoring is becoming an increasingy popular option.

This year alone thousands of businesses will sell billions of dollars in accounts receivable, and they are doing it for profit, growth, and in some cases , their very survival.

How Factoring Works

The First Step:
The Client application

You begin by filling out a simple client profile, which we will provide you. Please click here for profile. This profile will cover basics such as your company's name and address, the nature of your business, and information about your customers.

You may need to supply an accounts receivable aging report, existing customers' credit limits, or other related documents. Remember the factor will attempt to determine the creditworthiness of your customers independent of their credit history with your business. We want a broader view of their overall credit status.

During this initial stage you will also cover basic financial arrangements with the factor. For instance, what will be the monthly volume of invoices you want to factor(i.e. how liquid do you need to be)? What will the advance rate and the discount rate be? How quickly will the factor issue the advance to you?

In most cases, the answers to these questions will vary depending on the financial strength of your customer(s) and the anticipated monthly sales volume to be factored. Variations between industries, length of time in operation, and general reputation of how risky a customer of yours may be. For instance, a long list of high-risk clients will cost you more in factoring fees than a short list of government agencies with a slow-pay history.

In the factoring business, volume is all important. The higher your volume(the dollar amount of invoices you factor), the more favorable your rates will be.

The factor will use the client profile you submit to determine if your business is suitable for factoring. This process is simply the factor analyzing the risks versus the rewards, using the information you provided.

Once approved, you can expect to negotiate terms and conditions. The negotiation process takes several aspects of the deal into consideration. For instance, if you want to factor $10,000, you can't expect as good a deal as a company that wants to factor $500,000.

During the negotiation process, you will become well aware of what it costs to factor your accounts receivable. After you reach an agreement with the factor, the funding wheels begin to roll. The factor conducts due diligence by researching y our customers' credit and any liens placed against your company. The factor also confirms the legitimacy of your invoice before buying your receivables and advancing cash to you.

Why Factoring?

Why Factoring is Necessary

"A sale is not a sale until you collect the money"

Are you a part-time banker for your customers??

Take a look at your accounts receivable aging schedule and count the number of accounts over 30 days.Congratulations, you are extending credit to those customers. You are not getting paid for delivering your end of the deal in a timely manner and as a result you are providing the use of your money to your customer for free. Not exactly the business you thought you were getting into, is it?

Ask yourself this question:

If those customers of yours went to a bank, borrowed the same amount of time, would they expect to pay a substantial amount of interest for the privilege? Of course they would!

And consider this:

Not only are you receiving no interest on that money, but most importantly,you are also losing the use of that money while you are waiting for your customer to pay you. What is the cost of not having this money available? In essence, your customers are asking you to finance their business by extending terms and allowing them to pay in 30 days (and usually longer, right?).

But what is it costing you in "missed opportunities" when your money is tied up in your accounts receivable?

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 invoice factoring fees and advance 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 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 Factoring?

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! (Rates range from 1.5- 3 points) 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 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 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

But I only get 80% of my money upfront!

(Advances typically range from 80%-97%) 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.

Credit Risk

Quick Continuous Cash Yes!

You Also Get Our Credit Risk Expertise at No Additional Fee

Accurately assessing credit risk is really the essential part of our factoring business. Few, if any, business clients can perform this function as objectively as we will.

For no additional fee, we act as your credit department for new and existing customers. This provides you with a huge advantage over in-house performance of these functions.

Consider the scenario where a salesperson has a new account with a potential for large purchases. The salesperson wants the business-so much so that he or she may overlook red flags associated with credit difficulties. The salesperson may even walk the account through your own internal credit checking procedures, in order to side step established controls. While this may get you the sale, it won't get the money, and with no money, there is no sale.

This will not happen with us. We make credit decisions with full knowledge of the new customer's credit situation. We will not buy the invoices of a poorly-rated customer and risk nonpayment. But don't look upon our participation as a tightening of credit to the extent that your business will be affected in a way that is beyond your control.

If you have a new customer with questionable creditworthiness, the decision to do business with that person is still yours. (However, we will reserve the right to say "I told you so!")

We may not buy those invoices, but you are still free to extend credit terms as you see fit. You remain in control Whatever decisions are made, you can be assured that, because of the factor's participation,you will be making decisions and extending credit based on more complete, objective and higher quality information than you have in the past.

We will fully research new clients and, equally important, we will routinely check the credit ratings of your existing customers. This contrasts greatly with most businesses, where routine credit updates are seldom run on the established customer base. This is potentially a huge mistake.

When a business does opt to do a credit check, it is usually too late and the problem is already out of hand. On the other hand, we will inform you immediately if there is a change in the credit status of one of your existing customers.

In addition to the specific customer credit information that we provide, you will have the benefits of comprehensive, detailed reports on your accounts receivables as a whole. As a part of the process you will receive accounting, transactional details, aging reports and financial management reports that allow you to incorporate this data into your own sales tracking, account history and in-depth analysis

We have more than 70 years of successful cash flow and credit management experience we would love to put to work for you.

Switching Factoring Companies

Everything you need to know about changing factoring companies.

Looking for a new factoring company?
Unhappy with your current factor?
Thinking of leaving your factoring company?
What do I need to know if I want to change factoring companies?

Here are the answers to these questions and more:

What is a UCC and how does it apply to me wanting to change factoring companies?

It is standard industry practice for a factoring company to file a blanket Uniform Commercial Code (UCC) to secure the factor's first position security interest on the invoices funded.

The UCC is a way for factoring companies, banks and commercial lenders to keep straight who is lending on what assets. Because receivables change on daily basis as new invoices collect and old invoices are paid, factors must file what is called a 'blanket' UCC filing collateralizing all of your receivables even though you may only be factoring a portion of your sales. It's simply impossible for factors to file a new UCC for each invoice funded. The UCC is simply a flag for other lenders who chose to run a search indicating a Security Agreement exists between your company and the factoring company.

The details of your particular factoring arrangement, such as rates and which accounts are factored, are outlined in the Security Agreement itself which is not public not. A UCC is similar to a first mortgage on your business.

The Buyout Process

The lender with the oldest dated UCC filing is said to be in 'First Position' on the pledged collateral. For example, a factor has first rights to collect payments on your invoices and all the related surrounding instruments.

Factoring companies do not take a second position because the lender in first position could legally take the check right out of the hands of the second position factor at any time and have every legal right to do so. It's a similar concept to ensuring you get the pink slip when purchasing a vehicle. You wouldn't want to have someone come along one day, unannounced and take the vehicle you thought you owned and have every legal right to do so!

To change factoring companies the old factor must be paid off by the new factor. Simultaneously the old factor's lien is released and the factor's lien is filed which is similar to refinancing your home.

A 'buyout' is the practice where the new factoring company pays off the old factoring company using proceeds from your first funding. The Buyout Agreement outlines the transition process and is a three party agreement signed by the old factoring company, new factoring company and your company. In the Buyout Agreement you approve the 'buyout figure' provided by the old factoring company.

How is the Buyout Figure Calculated:

The buyout figure is generally calculated by taking the Gross Receivables Outstanding subtracting any reserves and then adding in fees due to the old factoring company. If not automatically provided, it's best to ask for a breakdown as to how your figure was calculated. This way you can be sure you understand if any early termination fees or other fees on top of your usual factoring charges have been included.

It's important to understand the buyout figure because once you authorize that amount the old factor is paid off you have released any recourse to old factor. From that point forward you are only dealing with the new factor.

If you are going from a factoring agreement with an 80% advance rate to a 90% advance rate it's possible there will be enough proceeds to payoff the old factor without your having to come up with additional invoices.

How much does the buyout cost?

If you are able to submit brand new invoices to the new factoring company which they can use to payoff the outstanding invoices at your old factor then there would be no additional cost to you to make the change. Then, as the payments come in on the old invoices outstanding from the old factor, as part of the buyout agreement, those payments are forwarded to the new factor who would turn around and forward those to you as non-factored at no cost.

That is an ideal situation however, to come up with the payoff figure most companies need to resubmit at least a portion of invoices already factored with the old factor to the new factor. If that is the case, the invoices part of the 'overlap' will incur factoring fees from both factors.

Therefore, depending on your fee structure your factoring fees the first month of the change could be higher than normal. If you'll be getting a lower rate from your new factoring company you can calculate how many months it will take you to recoup that expense and run a cost benefit analysis.

Depending on the size of the transaction, some factoring companies offer reduced fees on invoices part of a buyout. You also want to make sure you give the proper notice of intent to terminate to your old factor (if required) to avoid any early termination fees to leave their contract early (refer to the Security Agreement Section titled 'termination or early termination.'

How long does a buyout take?

When you are changing factoring companies it's best to plan on the first funding taking a two to three more days than the normal factoring application setup process. The added days will be needed at the time of invoice verification and just before funding as buyout figures are calculated and sent to you for your approval.

It's not uncommon for buyout figures to change because fees continue to accrue and invoices collect so it's sometimes necessary to get updated buyout figure at the very last minute. By aligning yourself with a factoring company familiar with the buyout process they can guide you through timing to minimize any delays in your funding as a result of the transition. This is especially critical if you have weekly payroll to meet and cannot spare a few days delay in funding.

What if my situation is not that easy? Although it is not common industry practice, it's possible the old factoring company and the new factoring company can work together via an Intercreditor or Subordination Agreement until the old factor is paid off.

Depending on the circumstances, factors have been able to 'draw a line in the sand' where the old factor has rights to invoices up to a certain date and the new factor has rights to all invoices after that date.

Questions you wish you had asked before you signed up with your current factor:

How many factoring companies can I use at one time? By the way, the universal answer is one (per the Uniform Commercial Code/UCC).

If I decide I want to change factoring companies how much notice will I need to give?

What is the penalty if I want to leave without giving the required notice and please provide an example of how the fees would be calculated. Caution: be on the look out for 12 month factoring contracts where requiring a certain factoring volume per month.

For example, a 12 month contract where you've agreed to factor $100,000 per month at a rate of 2% means you promise to pay them $2,000 per month in factoring fees or $24,000 in total factoring fees over the next year.

If you want to leave after 6 months they will charge you the fees you would owe them for the remaining 6 months in the contract which in this example equals $12,000. That is cost prohibitive for most companies especially trucking companies working on very low profit margins. You're stuck!

Even worse, the trucking industry in specific is very volatile and it's hard to know how many trucks you will have running for you over the course of the next year. Can you imagine committing to factor $100,000 per month and then having some unexpected circumstance require you to let go half of your owner operators yet you still have to pay the factor $2,000 per month regardless of how many trucks you are running?

Do you use a bank lock box to post my customer payments?

If so, how many days does it take for one of my customer's payments to post to my account from the date the bank receives my customers check? This process has been known to artificially inflate the invoice turn and therefore increase your factoring fees.

How many days do you hold my original invoices before mailing them out to my customers?

The answer should be same day. Invoices are cash and should not be left sitting around. Not to mention, this is another way to artificially inflate the invoice turn and increase the factors fees. How many different people will I work with at your company? Some factoring companies have either a lot of turnover or operate call centers where you start with a new representative every time you call in. Other factors offer dedicated account administrators to be your point of contact.

Do I need to pay for postage for you to mail my invoices?
That should be included in the factoring fees.

Do you charge me every time I have a new customer to credit check?
Do you charge me every time I setup a new customer?
Do you 'batch' my invoices and make me pay fees on all the invoices
submitted in a particular batch until the very last invoice in that batch has collected?
Do you start holding reserves once a customer hits 60 days even though I have 90 day recourse?

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