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Factoring is the process of purchasing
credit-worthy accounts receivable at a discount. Factoring can provide immediate
cash flow to a growing business at an affordable cost. Through factoring, you no
longer have to wait for the check in the mail. Cash is available to your
business immediately. If you need more working capital to help your business
grow, factoring is the solution for you.
Benefits of Factoring
invoice factoring
Account receivable factoring
Most businesses struggle to maintain
a steady cash flow. Factoring allows for a steady and predictable source of
cash. Also, many businesses face the fact that most of their cash is tied up in
accounts receivable. SDCF can make that cash available to your business
immediately.
SDCF can also work with businesses that are "Non-Bankable."
Banks typically require 2 years of financial statements in order to qualify a
business for a loan. Factoring is concerned more with the credit worthiness of
the receivable than the credit standing of our client.
Factoring with
SDCF can also offer your company the following benefits:
• 24 hour funding on approved invoices
• Highest
advance rates in the factoring company industry
• Credit analysis on new and
existing customers
• Continuous collection management and follow up on
factored invoices
• Invoice and statement mailing (postage included)
•
Account status inquiries anytime; 24/7 online account access.
Is 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 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!
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
Sales |
- But I only
get 80% of my money upfront!
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.
More companies thae we provide factoring for:
Staffing invoice factoring company
Building Products Distributor invoice factoring company
Building Products Waterproofing Distributor invoice factoring company
Farmer invoice factoring company
Manufacturing invoice factoring company
Maintenance Service specializing in lighting invoice factoring company
Bean Marketing invoice factoring company
Machine Knives invoice factoring company
Custom Auto Body for Emergency and invoice factoring company
Municipality Vehicles invoice factoring company
Emergency and Municipality Vehicles invoice factoring company
Parts and Installations invoice factoring company
Metalized coating invoice factoring company
Auto Parts invoice factoring company
Powder Coating invoice factoring company
Utility Construction invoice factoring company
Commercial Diving /Ship repair by divers invoice factoring company
Machine Shop invoice factoring company
Tutoring invoice factoring company
Trucking invoice factoring company
Trucking - Refrigerated Freight invoice factoring company
Trucking - Dry Freight invoice factoring company
Trucking - Over the Road invoice factoring company
Security Services invoice factoring company
Commercial & Industrial Refrigeration invoice factoring company
Repair & Maintenance invoice factoring company
Freight Forwarding invoice factoring company
Freight Expediting invoice factoring company
Metal Distributor invoice factoring company
Consulting invoice factoring company
Software Development invoice factoring company
Commercial Paving Services invoice factoring company
Prototyping/Production invoice factoring company
Gaming Manufacturer invoice factoring company
Mobile Car Wash invoice factoring company
Mobile Dent Repair invoice factoring company
Training & Education for Medical Equipment invoice factoring company
Commercial Landscape, Irrigation and Lighting Services invoice factoring company
Jewelry sales/design invoice factoring company
Import Tabletop Manufacturing (dinnerware) invoice factoring company
Transport & Logistics invoice factoring company
Rebuild Industrial Vacuum Pumps invoice factoring company
Freight Brokerage invoice factoring company
Precision Sheet Metal Fabricator invoice factoring company
Custom Art Sales invoice factoring company
Custom Embroidery & Silk Screen Printing invoice factoring company
Medical Case Management invoice factoring company
Direct Importing of Baseball Caps invoice factoring company
Hospitality Staffing invoice factoring company
Distributor of Building Products invoice factoring company
Healthcare Staffing invoice factoring company
Nursing Agency invoice factoring company
Medical Staffing invoice factoring company
Legal Staffing invoice factoring company
IT Staffing invoice factoring company
oil refinery inspection services invoice factoring company
local delivery service invoice factoring company
transportation company invoice factoring company
transportation company (hauls cars for dealerships) (auto transport) invoice factoring company
telecommunication tower constructions & maintenance invoice factoring company
hydraulic service, repairs & maintenance company invoice factoring company
Construction account- Patch work, painting and landscaping invoice factoring company
Commercial Laundry Systems Installer invoice factoring company
Language Translation Services invoice factoring company
Airline Maintenance invoice factoring company
Trucking / Container Freight invoice factoring company
Pharmaceutical Market Research invoice factoring company
Staffing invoice factoring company
Building Products Distributor invoice factoring company
Building Products Waterproofing Distributor invoice factoring company
Farmer invoice factoring company
Manufacturing invoice factoring company
Maintenance Service specializing in lighting invoice factoring company
Bean Marketing invoice factoring company
Machine Knives invoice factoring company
Nurse Staffing invoice factoring company
Cable Sales and Installation invoice factoring company
Cable Sales and Marketing invoice factoring company
Cable Collections invoice factoring company
Cable Construction invoice factoring company
Aviation Parts Broker invoice factoring company
Steel Base Manufacturing invoice factoring company
Hydraulic Equipment Repair invoice factoring company
Cellular Tower Maintenance invoice factoring company
Software Services invoice factoring company
Security and Private Investigator Services invoice factoring company
General Maintenance Services invoice factoring company
Pharmaceutical Market Research receivables factoring
Staffing receivables factoring
Building Products Distributor receivables factoring
Building Products Waterproofing Distributor receivables factoring
Farmer receivables factoring
Manufacturing receivables factoring
Maintenance Service specializing in lighting receivables factoring
Bean Marketing receivables factoring
Machine Knives receivables factoring
Nurse Staffing receivables factoring
Cable Sales and Installation receivables factoring
Cable Sales and Marketing receivables factoring
Cable Collections receivables factoring
Cable Construction receivables factoring
Aviation Parts Broker receivables factoring
Steel Base Manufacturing receivables factoring company
Hydraulic Equipment Repair receivables factoring
Cellular Tower Maintenance receivables factoring
Software Services receivables factoring company
Security and Private Investigator Services receivables factoring
General Maintenance Services receivables factoring
Machine Shop receivables factoring
Delivery / Courier Services receivables factoring
Technical Staffing receivables factoring
Underground Utilities receivables factoring
Drug Testing receivables factoring
Software & IT Services receivables factoring
Commercial Cleaning and Services receivables factoring
Travel Nurse Staffing receivables factoring
Camouflage Apparel receivables factoring
Retail Fixture Installation receivables factoring company
2 way radio, communications provider/service receivables factoring company
IT Consulting receivables factoring company
Fitness Equipment Manufacturer receivables factoring company
Security Staffing receivables factoring company
Purchase names for mass mailers and sold to Universities (Broker of Mass receivables factoring company
Mailing Lists) receivables factoring company
Financial Recruiter receivables factoring company
Commercial Landscape Maintenance receivables factoring company
Nurse Staffing to Prisons receivables factoring company
Printed Materials, Forms - Papers receivables factoring
Computer/Project Consultants receivables factoring
Janitorial Services receivables factoring
Medical Transcription Services receivables factoring
cable tv construction (low voltage wiring) receivables factoring company
metal distributors receivables factoring
drayage trucking company receivables factoring company
trucking company: intermodal container freight receivables factoring
consultants and specialized transportation receivables factoring company
hanger manufacture and recycling receivables factoring
Pallet Manufacturing & Recycling receivables factoring
Food Industry receivables factoring
Temporary Employment receivables factoring
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Quick
Continuous Cash Yes!
And 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
Types of Companies We Work With.
Business Services Companies
Trucking and Transportation Companies
Government Contractors Suppliers
Security Companies Guard Agencies
Staffing Temporary
Employment Agencies
Partial List Of Industries That
We Provide Factoring
Invoice Factoring
Staffing company
Financing credit for
staffing service companies.
Factoring Building Products Distributor company
Financing invoices for clients in
the Building Products Distributor industry
Factoring Manufacturing company
Financing invoices for
manufacturing
companies
Invoice Factoring Maintenance Service company
Financing credit for maintenance
service companies.
Factoring Service Providers company
Financing invoices for small and medium sized service
companies
such as commercial suppliers, technology consultants
and
janitorial companies,etc.
Factoring Metalized coating company
Financing credit for metalized
coating service companies.
Invoice Factoring Auto Parts company
Financing invoices for auto
parts
companies
Factoring Powder Coating company
Financing invoices for companies that provide services
and products
to Powder Coating clients
Factoring Cable Contractors company
Financing invoices for cable
contractors
companies
Factoring Utility Construction company
Financing invoices for utilty
construction
companies
Invoice Factoring Machine Shop company
Financing invoices for machine
shop
companies
Factoring Oil and Gas Industry company
Financing invoices for companies that provide services
and products
to Oil and Gas Companies
Factoring Trucking company
Financing invoices for trucking companies,
freight
brokers and commercial transportation companies
Invoice Factoring Freight Forwarding
company
Financing invoices for freight
forwarding
companies
Factoring Healthcare Staffing company
Financing invoices for
staffing
companies
Factoring Government Contracts company
Financing invoices for companies that provide services
and products
to state and federal government agencies
Invoice Factoring Distributors company
Financing invoices for
distributor
companies
Factoring Freight & Trucking company
Financing credit for freight and trucking
service companies.
Invoice Factoring Manufacturers company
Financing invoices for companies that provide services
and products
to Maunfacturing clients
Financing Medical Practitioners company
Financing credit for medical practitoner
firms
Factoring Security Guards company
Financing invoices for companies that provide security
guards
to commercial, industrial and government sites
Invoice Factoring Temp Staffing
Agencies
Financing invoices for staffing
and temporary employment
in the business and medical services
field
And Many
More
We are currently providing account
receivable factoring services nationwide including the following states:
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware,
Florida, Georgia, Hawaii, Idaho State, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New
Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas,
Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and
Wyoming.
Alabama invoice factoring
Alaska invoice factoring
Arizona invoice factoring
Arkansas invoice factoring
California invoice factoring
Colorado invoice factoring
Connecticut invoice factoring
Delaware invoice factoring
Florida invoice factoring
Georgia invoice factoring
Hawaii invoice factoring
Idaho invoice factoring
Illinois invoice factoring
Indiana invoice factoring
Iowa invoice factoring
Kansas invoice factoring
Kentucky invoice factoring
Louisiana invoice factoring
Maine invoice factoring
Maryland invoice factoring
Massachusetts invoice factoring
Michigan invoice factoring
Minnesota invoice factoring
Mississippi invoice factoring
Missouri invoice factoring
Montana invoice factoring
Nebraska invoice factoring
Nevada invoice factoring
New Hampshire invoice factoring
New Jersey invoice factoring
New Mexico invoice factoring
New York invoice factoring
North Carolina invoice factoring
North Dakota invoice factoring
Ohio invoice factoring
Oklahoma invoice factoring
Oregon invoice factoring
Pennsylvania invoice factoring
Rhode Island invoice factoring
South Carolina invoice factoring
South Dakota invoice factoring
Tennessee invoice factoring
Texas invoice factoring
Utah invoice factoring
Vermont invoice factoring
Virginia invoice factoring
Washington invoice factoring
Washington, DC invoice factoring
West Virginia invoice factoring
Wisconsin invoice factoring
Factoring is a word often misused synonymously with accounts
receivable financing. Factoring is a financial transaction whereby a business
sells its accounts receivable (i.e., invoices) at a discount. Factoring differs from a bank loan in three main ways.
First, the emphasis is on the value of the receivables, not the firm’s credit worthiness.
Secondly, factoring is not a loan – it is
the purchase of an asset (the receivable).
Finally, a bank loan involves two parties whereas factoring involves three.
The three parties directly involved are: the seller, debtor, and the factor. The seller is owed money
(usually for work performed or goods sold) by the second party, the debtor. The
seller then sells one or more of its invoices at a discount to the third party, the specialized financial
organization (aka the factor) to obtain cash. The debtor then directly pays the
factor the full value of the invoice.
GET YOUR CASH TODAY
Call our factoring specialists at
1-866-713-6153
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