FAQ'S FREIGHT FACTORING
FACTORING FAQs | FREQUENTLY ASKED QUESTIONS | TRUCKING & TRANSPORTATION FACTORING
How soon can you issue a
factoring proposal?
A proposal can be issued very quickly (usually within 1 hour) after
we have received your information.
Is accounts receivable funding
a new financing option?
No. Accounts receivable funding is one of the oldest
forms of financing. It has been around in one form or another for
more than 4,000 years. Until the mid 1980s, most people thought
accounts receivable funding was only used in the textile and
garment industries. Today, accounts receivable funding is a widely
used and viable financing solution for all types of businesses that
extend credit terms to their customers.
How can accounts receivable
funding help my business?
By providing an immediate source of cash flow for your company. You
can use this cash to provide working capital, meet payroll, pay
taxes, replenish inventory, increase advertising, purchase
equipment, improve your credit rating, and more.
How is accounts receivable
funding from your company different than accounts receivable
financing from a bank?
When making a funding decision, we focus on the creditworthiness of
your customers while banks will focus on your company’s financial
history and cash flow. Plus, since accounts receivable funding is
not a loan, there is no debt on your company’s balance sheet. Best
of all, we will make a quick funding decision, while banks may take
weeks—even months—to approve a loan.
Will my company be eligible
for accounts receivable funding if ithas a bank loan or line ‘of
credit?
If a bank has a lien on your company’s accounts receivable, you
should let us know right away. We will ask the bank to subordinate
that lien in our favor. Because this is a common occurrence, most
banks will accommodate the request, but we must know this
information in advance.
My company owes back taxes.
Can I still apply for accountsreceivable funding?
Yes, Tax problems are handled on a case-by-case basis. Please let us
know immediately so that we can discuss the payoff of your back
taxes or a lien subordination with the IRS.
I have had a past bankruptcy,
is accounts receivable funding stillan option?
Yes, we will still consider your application even if you have credit
problems or a past bankruptcy.
What information will you need
from my company to begin theaccounts receivable funding process?
Along with the application, be sure to include your company’s most
recent accounts receivable and accounts payable aging reports,
Articles of Incorporation or DBA filing, a master customer list and
a sample invoice. For startup companies, please also submit a
business plan and projected sales forecast, and an owner/officer
history and profile.
Which customers would be good
candidates for accountsreceivable funding?
Ideally, we would like to fund all of your customers. First, we need
their names, addresses, phone numbers and the amounts of credit
desired. This will save you time when submitting invoices to us.
Also, anytime you obtain new customers, fax the same information to
us, and we will check them out for you.
Can your company purchase
only a portion of my company’sinvoices?
Absolutely, but remember that higher numbers of receivables
purchased on a regular basis can result in more competitive rates.
Terms can be especially flexible when there are large numbers of
invoices issued to a larger, rather than smaller, pool of your
customers.
What is the Advanced Rate?
The Advanced Rate is the percentage advanced on your invoices. For
example, you sent a $10,000.00 invoice to be factored, the factor
advances 90% of that invoice to you ($9,000.00) via wire transfer to
your bank account within 24 hours. The additional 10% of
the invoice is sent to you by the factor (less service fee) once the
invoice is paid by your customer. Typical advances are
90% to 92% of the invoice, but the actual Advanced Rate (as high as
95%) is based on the age of the invoice (10,30,60,90,120 Days), the
financial strength and credit worthiness of your customers.
How much does it cost?
Our Factoring Fees are one of thre lowest in the Industry!
GREATFACTORINGRATES.COM - CLICK FOR A QUICK QUOTE!
Our services are tailored to your specific business so the fees will
depend upon your specific needs. There are two types of fee. The
first is the cost of the money you use, which is extremely
competitive. The second is a service fee, which encompasses the
collections service. Fees will also vary depending on the
advanced rate, invoice aging, and the total dollar amount you intend
to factor on a monthly basis, there are also volume discounts.
However, specific Factoring Fees cannot be quoted without
information on your customers, invoices, amounts you wish to factor,
and your type of business. You should know that we offer one
of the lowest factoring fees in the country. And, the fact is, we
want to be your factor, so we will be more than competitive. We will
be happy to provide you with a proposal. To GET PRE-APPROVED,
please CLICK
HERE to complete our short form.
I am currently factoring with
another company, can you compareour rates and perhaps lower are
factoring fees?
As one of the lowest factoring fee factor in the industry, we should
be able to beat most other offers. If you are factoring now and
would like a factoring fee/rate comparison, please CLICK
HERE to complete the short-form. The representative that handles
your region will contact you shortly.
How long does it take to
receive the first funding?
The initial funding takes between 1-3 business days after we receive
your signed contract. If you wish, you can send your invoices to be
funded with the signed contract. After the initial funding, your
company can receive funds usually within 24 hours after
verification.
Do you purchase outstanding
invoices?
Yes. For the first funding only, we can purchase your invoices from
your outstanding accounts receivable.
Are accounts receivable
funding fees tax deducible?
Most accountants agree that accounts receivable funding fees are an
expense and should be treated as such.
Do you verify invoices with
my customers?
Invoice verification is an essential, and accepted, part of funding.
Because factors verify invoices with customers, they can tell
clients if there is a customer service problem right away. A
non-factoring client may not notice the problem until the invoice
becomes past due. By that time, it may be too late to save the
account. For the process to run smoothly, we suggest that you call
your customers or send them a letter in advance to let them know
that you are now working with a factor. If you need assistance in
writing the notification letter, we will be happy to provide you
with a sample letter.
What should I do if my
customer mistakenly sends the paymentto my company?
This might happen, especially with the first invoice. If this
occurs, the check must be sent to us immediately. Your company
should never deposit invoice checks that were already purchased by
the factor. We also ask that you notify your customer to pay us
directly in the future.
What happens if my customer
doesn’t pay the invoice?
This depends on whether your company entered into a non-recourse or
recourse agreement with the factor. In a non-recourse agreement, the
factor will absorb the credit-related loss. However, with a recourse
agreement, your company will have to reimburse the factor—either by
having the invoice deducted from the next advance or replace it with
another collectable invoice.
How can I be certain that the
factor will treat my customers well?
The last thing we want is for you to lose a customer. We are not a
collection agency. We will never harass your customers for money.
Maintaining your customers’ goodwill and confidence are of utmost
importance to us!