Portia Ramassar Paragon Financial Group Factoring 101
Factoring is the sale of your accounts receivable (invoices) to a funding source at a discount off the face value in return for immediate cash. The funding source is known as a Factor. What is Factoring?
Why Factoring vs a Bank Line • Business Less than Two Years Old • Losing Money • High Client Concentration • Based on YOUR Client’s Credit Worthiness • Balance Sheet Issues • Personal Credit • Bank Line Too Small • Hyper Growth • Defacto Credit Department (Credit Protection)
What Type Business can Factor • Staffing/Labor Providers • Manufacturing • Distributors • Trucking • Government Contractors • Service Providers • International Sales • Healthcare • Construction (Limited) • And many more……
How to Get Started with A Factor • Factor’s Two Page Application • AR Detail • Copies of Contracts • Copies of Invoices • Other Industry Related Documentation
Questions to Ask a Factor • Client (Debtor) Perception • How are My Clients Treated? • Verification Process • Recourse vs Non-Recourse • Advance Rate & Fees • Time Frame-Approval & Funding
Factoring 101 Thank you for your Time! Portia Ramassar Paragon Financial Group