Accounts receivable factoring (factoring) provides companies with the working capital financing they need to pay operating expenses, fund inventory and pay for machinery and equipment. Factoring also provides credit management services, collections and in most cases credit protection on invoices as a result of a customer default.
Transaction Size: Revolving lines of credit starting at $100,000 (based on outstanding accounts receivable invoices).
Criteria:Most companies qualifying for First Capital factoring services are B2Bs (business-to-business) in manufacturing, wholesale, distribution and/or services generating commercial accounts receivable invoices. In most cases, yearly sales must exceed $1 million.
If you think invoice factoring is right for you, contact us
Factoring is a complete financial solution that combines credit management, working capital financing, credit protection, accounts receivable bookkeeping, and collection services. First Capital provides business factoring services as well as international factoring for clients doing business around the world.
Accounts Receivables factoring is an agreement between your business and First Capital.
1. First Capital establishes credit lines for your customers and clients based on our credit management expertise and years of experience.
2. You ship goods or provide services to your customers and clients as usual and assign the commercial accounts receivable invoices to First Capital.
3. First Capital performs collection services on accounts receivables in a customer-friendly fashion once the invoices become due.
4. Payments are remitted to your company less a small fee.
5. If the customer or client becomes unable to pay because of financial inability, First Capital pays your company for the outstanding invoices.
Accounts receivable factoring provides a business line of credit that allows you to borrow against your factored invoices for working capital needs such as inventory and equipment financing.
Online reporting allows you access to your account to monitor accounts receivable agings as well as individual invoices.
Basically, accounts receivable financing is a form of outsourcing with a built-in revolving line of credit feature. By using First Capital to factor commercial invoices, the accounts receivable servicing function can be converted from a fixed cost to a variable cost while obtaining a higher level of expertise, more years of experience, and better consistency than a company can usually do on its own.
Although you do not have to borrow against your outstanding accounts receivable invoices, it’s like having an active business line of credit whenever you need it.
Small to medium-sized (and in some cases large) businesses that make or distribute products and/or provide services to other businesses in virtually every industry can employ receivables factoring services. The main requirement is simply commercial accounts receivable, payable from other businesses. Whether you're in high-growth mode, turnaround, or anywhere in between, First Capital’s receivables factoring program may be right for your company.
Learn more today how factoring your accounts receivable invoices can help you better run your business operations and provide an immediate business line of credit. Compared with many other forms of outsourcing and commercial financing, an accounts receiable factoring arrangement can be put into place fairly quickly and easily.
To get started factoring your accounts receivable invoices, contact us.