Factoring is an over 100 billion dollar industry designed to make businesses of all sizes run more efficiently and be more profitable. Although there are many ways in which it works, the basic idea is for professional financial organizations to purchase the accounts receivable (invoices) of businesses, even as they come in from customers, and immediately provide the funding (cash flow) to those businesses. The financial organization takes a small percentage as its discount fee and the business gets paid for its goods or services within hours instead of days or months. This allows the business significantly increased financial flexibility to make improvements and pursue its goals.
Not to First Financial Factoring it isn’t. We don’t even look at your company or personal credit history. Our focus is on your customers’ creditworthiness, not yours.
Yes, most likely. This is, as you might expect, a very common circumstance for businesses. As long as we know in advance, we can determine the best strategy to leverage your situation for you. For instance, you might have enough current receivables to pay off the bank, or you might need a subordination agreement from your bank to allow you to proceed with First Financial Factoring. We have a lot of experience and a lot of successes in this area and would handle the negotiations with those lenders for you.
Simple. Your invoices come to us electronically and we advance you up to 97% of their total within hours. Later, when we receive full payment from your customers, you get the remaining portion minus a small discount fee for our services. (Advance rates and discount fees are based on your industry type, monthly volumes, average invoice size, and other variables).
In most cases, you’ll have it in about 2 hours, no more than 24 hours. Just fill out the application and you’re on your way.
Within 3 to 5 business days total, you’ll have funding. After an initial conversation with one of our professionals, you’ll get a customized proposal within a couple of hours. Once you accept, we overnight the formal sign-up package. Sign and return the materials with your first batch of invoices on the same day you get it, and we’ll fund you within the next 2 days. As long as you respond relatively fast, it’s all done in 3 to 5 days.
Practically any business at all can benefit from First Financial Factoring. The only criterion is that you generate a verifiable invoice for goods or services.
No, we don’t. Your customers’ creditworthiness is what we review. The only exception is for medical receivables companies, not including nursing homes.On large dollar amount facilities, we need financial statements and sometimes an audit.
You may be surprised to find out how many of them already use factoring themselves. It is a very widely used practice that benefits all parties. If your clients don’t already know the benefits from personal experience, they should be very pleased to learn your business is becoming more streamlined and efficient, which means you’ll almost certainly be providing better service and value to them.
No, it is not—especially not with First Financial Factoring. Consider your own business where you must occasionally call a client to ask about payments. You don’t badger them or threaten them–they are your valued clients. Our highly trained professionals share that philosophy and support it with interpersonal skills designed to maximize results while respecting and empowering every customer. Plus, we keep you informed as we gather information on your behalf. We understand that we’re representing you.
Actually, we encourage you to do just that. We want to work with you as a team, making sure that, between us, your clients aren’t getting extra phone calls with the same questions. Their peace of mind is as important to us as it is to you.
Speed. Service. Value. Unlike a bank loan that can take weeks (and that’s an optimistic estimate), First Financial Factoring completes the entire process in 3 to 5 business days. We like to think of ourselves as your partner, with extra services like customized collection management, credit analysis and monitoring for no extra fee. A bank will usually give you a basic line of credit, then hit you with those extra service fees as your needs evolve.
No, in order to manage these accounts, we need to receive payments mailed directly to us.or wire the funds. Your clients will get a letter called a “Notice of Assignment” which is signed by you. In it, you’ll inform them that payments need to go to a new address, or new wire instructions. They may choose to remit either as payment to your company name or in our name.
No, you can’t factor with two factoring companies simultaneously. You may switch from another factor, depending on your actual contract. If you would like us to review your current factoring agreement,email us or fax us a complete copy and we will look for ways to help you.
With a bank loan, you incur debt, which is reflected on your balance sheet. But your company’s balance sheet is not affected by factoring and you need no on-hand cash to repay principal and interest.
Yes, but existing receivables are advanced with a lower advance rate. To determine the exact rate, we analyze a number of variables about your existing receivables on a case-by-case basis.
Yes, and we will work out the details for you, including paying the IRS, if you have enough receivables to pay them or if we can get a lien subordination from the IRS. Also, if you have installment payments with the IRS, we can review that and probably take control of the payments, so you won’t need to worry when to send the payments.
You need to submit a complete application. You’ll also need a fully detailed aging report, articles of incorporation or fictitious name certificate or DBA filing or partnership agreement, W9, permits (if your industry requires a particular permit such as ICC/MC authority for trucking) and proof of insurance if your industry requires it.
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Yes, we can. If you are still in the contemplation stage, please have your lawyer contact us to ensure he or she presents all the required documents to the court. If you are already in Chapter 11, then we need a court order permitting you to factor with us. Usually this can be handled by your attorney.
We’ll try to be brief. Factoring means an immediate increase in cash flow for very little cost. Consequently your company runs more efficiently and is enabled to take more orders than previously possible, back when your money was all tied up in accounts receivable. Additional sales deliver more income, especially for small margin operations. Now you can negotiate discounts based on your ability to pay quickly and in cash. Bank, insurance and government penalties are avoided because you’re never late with payments. Plus, the extra revenue and growth allow for better fixed-operating costs and better bottom line profits. It just keeps going and going and going.
Surprise. Factoring makes it easier. Since factoring its accounts receivable lets your company reduce debt, your debt-to-equity ratio improves. You become a better loan candidate in the eyes of the bank. On top of that, your stronger cash flow keeps you able to pay the bank on time every time.
No. We purchase millions of dollars in accounts receivable every month and we know almost every industry in detail. At First Financial Factoring, we pride ourselves on our diversity of accounts, large and small, and our dedication to every one of them.
No, it is completely up to you. Just remember that we base our rates on your factor volume per month. So the more volume we handle for you, the better your discount fees.
Primarily we use your monthly dollar amount factored, the average dollar amount size of your invoices, the average days your customers take to pay their invoices and your customers’ creditworthiness.
Yes, we finance start-up businesses all the time. We find them exciting. |
Absolutely. In fact, we encourage prospective clients to call our established clients to check us out. We believe you will be impressed. We want you to feel confident that you are dealing with a leading company with an excellent reputation in the industry. If you wish, we can provide you with a confidential list.
We’re all human and it’s easy to forget some details. But we do need your help to maintain the simple elegance of this system. For instance, you should not deposit any checks of monies that correspond to invoices open on our books. Sometimes you might get checks from customers who have forgotten that we are the new receiver. Also, please remember to deduct all advances on invoices, so as not to create a shortage. Of course, things do happen. But you can be assured we will always resolve questions with your best interests and valued business in mind.
We’re prepared to customize large or small business factoring plans for every new client, and we can even offer international.
