Q.Does Factoring Associates buy our accounts receivable (invoices) ?
A. Yes. We do not lend you money, instead, we make an outright purchase of the financial rights to the invoices at the time of billing.

Q. How do you collect?
A. The same way your company currently collects: by invoicing your client for the service you preformed.

Q. Do we bill on our letterhead or yours?
A. With factoring, you continue to invoice as normal. The main difference is that checks may be made payable to you, but must be mailed to our address.

Q. What are your requirements for buying an invoice?
A. The work or service that is invoiceable must have been completed, delivered and accepted. As well, your client must be a creditworthy risk.

Q. Can we qualify with a history of credit problems such as bankruptcy, IRS liens or judgments ?
A. Although this surprises many of our clients, the answer is yes.Factoring Associates is quite experienced with making arrangements with the IRS or the courts.

Q. What geographical restrictions does your service have?
A. Generally we will buy invoices for any creditworthy government agency or business in the USA or Canada. We do frequently deal with international receivables, but these require special arrangements.

Q. Can we qualify if we already have existing credit lines or SBA loans?
A. Yes. Factoring generally works well as a compliment to your existing financing arrangements and allows you access to larger funding amounts than might have been possible with credit lines alone.

Q. Our business just started. Can we qualify despite the fact that we have no real credit history?
A. Factoring acceptance depends more on the creditworthiness of your customers, so if their credit is good, you will automatically be accepted.

Q. What are the costs involved?
A. We ensure you know the rates of the transaction before we begin factoring. We will also provide you with a full rate schedule on request.

Q. How does Factoring Associates make money?
A. Factoring Associates collects a fee once the invoice is completely paid. In effect, we buy the invoice from you and then collect a fee for waiting to get paid. Meanwhile, you have received immediate cash to help with working capital.

Q. What types of receivables does Factoring Associates buy?
A. We buy almost every valid receivable for a service preformed or a product delivered to any Business or Governmental entity. However, we do reserve the right to accept or reject any invoice.

Q. Can you give me an example of how factoring works?
A. Your company has completed agreed-upon work and delivered all goods or services. It is invoicing time. Let's say, as an example, that your invoice is between $2,000 to $100,000. As a first step, you simply contact us by telephone or fax, and let us know the total invoice amount you would like to receive as cash immediately.

Next, simply overnight the original invoices ready for mailing to your client. Once they have been received, Factoring Associates processes the invoice within 24 hours or less. Once the invoice has been verified and assigned to us, we immediately wire or overnight the Advance (60% to 80% of the invoice) to your company. Once we receive full payment from your client, we rebate your company the remaining funds (20% to 40%) less our fee (2 to 4 points). Factoring Associates is not paid until your client pays the invoice in full.

Q. What is the average invoice amount Factoring Associates deals with?
A. In the past, we have worked with clients that invoice anywhere between one thousand ($1,000) and one million ($1,000,000) dollars.

Q. Is there an upper limit on the invoice amount you can accept?
A. Currently, there is no upper limit to the size of invoice Factoring Associates can accept. We have access to funds to provide services for any size transaction.

Q. What is a Receivable Based "Credit Line"?
A. We can convert your customer invoices into a credit line from which you can draw cash to better manage or stabilize your business. With this credit line product, you can draw only as much as you need at anytime and pay only for what you use. You can easily multiply your total working capital by turning it using this line.

Compared to bank credit lines, our receivables-based line uses far less collateral, requires a minimal amount of paperwork, can be in place in less than than a week and, best of all, grows with your business. Why not let our credit line service compliment any loans that you have today.

Q. What happens if my client does not or cannot pay?
A. Due dilegence is a large and crucial part of the factoring process. We purchase all of our invoices on a non-recourse basis, so if your customers should default after all other avenues of collection have been exhausted, litigation is generally our only recourse. Of course, we will include your company in the process so as not to disrupt your relationship. This inherent risk is built-in to our fee structure.

Q. Will factoring be good for my business?
A. Factoring helps hundreds of businesses like yours gain access to immediate cash everyday. Factoring Associates can help your business grow, too.

Please feel free to contact us with any questions, or apply now to begin factoring today.

FAQ | Glossary | Process | Required Documents | Services
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