What is FACTORING? Factoring (fak-ter-ing): The sale of a company’s accounts receivable invoices to a factor to obtain working capital; this is also known as receivables factoring, invoice factoring, bill factoring, accounts receivable factoring, accounts receivable funding and invoice discounting. It is a popular method of financing used worldwide to help all types and size of companies. With a tough lending climate, companies of all types are turning to factoring to gain access to steady cash flow for their business. So what is factoring, and how can it help your business? Factoring in a nutshell Factoring is simply a cash flow solution that turns your invoices into quick cash. It is extremely common to use factoring services in the freight industry, as companies are then able to use the advanced funds for fuel needs and overhead business costs instead of having to wait 30, 60, or even 90 days for a payment. Factoring works like this: 1 The carrier sends their unpaid invoices, along with some basic documentation, to their factoring company 2 The factoring company pays the carrier up to 80-90% of that invoice in 24 hours, while keeping the rest in a reserve account 3 Your customer sends the invoice payment to the factoring company 4 The carrier receives the remaining invoice amount that was in the reserve account minus a small fee It’s a relatively simple process that gives carriers access to their working capital while allowing them to focus on growing their business. Recourse and non-recourse factoring There are generally two major types of accounts receivable factoring that companies can choose from: recourse factoring and non-recourse factoring. In a recourse arrangement, you always remain responsible for nonpayment. In a non-recourse factoring arrangement, the factoring company will cover the loss if your customer files bankruptcy. Think factoring services are exactly what your company needs? Give us a call at 800.705.1500 or send us an email at [email protected]. Got a question? Need some advice? Give us a ring. 800.705.1500 eCapital.com Who is eCapital anyway? We’re in the business of buying your accounts receivable to give you fast cash and financial freedom. Connect with us and find out more. T1213

What is factoring?

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Learn what invoice factoring is and how it can help small business owners improve cash flow. With a tough lending climate, companies of all types are turning to factoring to gain access to steady cash flow for their business. So what is factoring, and how can it help your business? Factoring in a nutshell Factoring is simply a cash flow solution that turns your invoices into quick cash. It is extremely common to use factoring services in the freight industry, as companies are then able to use the advanced funds for fuel needs and overhead business costs instead of having to wait 30, 60, or even 90 days for a payment.

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What isFACTORING?

Factoring (fak-ter-ing):The sale of a company’s accounts receivable invoices to a factor to obtain working capital; this is also known as receivables factoring, invoice factoring, bill factoring, accounts receivable factoring, accounts receivable funding and invoice discounting. It is a popular method of financing used worldwide to help all types and size of companies.

With a tough lending climate, companies of all types are turning to factoring to gain access to steady cash flow for their business. So what is factoring, and how can it help your business?

Factoring in a nutshellFactoring is simply a cash flow solution that turns your invoices into quick cash. It is extremely common to use factoring services in the freight industry, as companies are then able to use the advanced funds for fuel needs and overhead business costs instead of having to wait 30, 60, or even 90 days for a payment.

Factoring works like this: 1 The carrier sends their unpaid invoices, along with some basic documentation, to their factoring company

2 The factoring company pays the carrier up to 80-90% of that invoice in 24 hours, while keeping the rest in a reserve account

3 Your customer sends the invoice payment to the factoring company

4 The carrier receives the remaining invoice amount that was in the reserve account minus a small fee

It’s a relatively simple process that gives carriers access to their working capital while allowing them to focus on growing their business.

Recourse and non-recourse factoringThere are generally two major types of accounts receivable factoring that companies can choose from: recourse factoring and non-recourse factoring. In a recourse arrangement, you always remain responsible for nonpayment. In a non-recourse factoring arrangement, the factoring company will cover the loss if your customer files bankruptcy.

Think factoring services are exactly what your company needs? Give us a call at 800.705.1500 or send us an email at [email protected].

Got a question? Need some advice? Give us a ring. 800.705.1500eCapital.com

Who is eCapital anyway? We’re in the business of buying your accounts receivable to give you fast cash and financial freedom.

Connect with us and find out more.

T1213

http://www.ecapital.com