ForumsFinancing Tips

Ed,

There are basically two costs to factoring - the factoring commission and the interest charged on advances against receivables. Factoring commissions are a percentage of factored volume. The rate is based on: Factored sales volume, Average invoice size, Terms of sale, Number and type of customers. Interest on advances is charged monthly based on the average daily amount advanced. It is tied to a major rate index and is comparable to any short term revolving credit interest charge. Factoring is different from bank financing in a couple of ways. Since factoring, unlike lending, results in the purchase of accounts receivable, it doesn't show as a debt on the client's balance sheet. Also, advances are based on the credit-worthiness of the client's customers, not it's own credit situation.

Benefits include:
Protection from credit losses. We largely eliminate bad deb for clients. We do the investigation for each client and determine the credit-worthiness of it's customers. On all eligible receivables the client transfers the risk of customer non-payment to us.
Increased borrowing power and increased cash flow
Factoring provides a similar benefit to the client as selling on a COD basis.
Improved collections
As the owner of the invoices, the factor performs the collection work. The factor takes advantage of it's size, collection experience and customer relationships to speed up the process, allowing the client to benefit from better cash flow.

Please let me know if any of your clients could benefit from this type of financing.

Thanks.

LUCKIEST,

Thanks for the note. We're looking to do business, so I hope I can help some of the small and medium sized companies grow their business safely.

Factoring is just one of the products we offer.

We do a huge amount of Credit Insurance. Credit Insurance insures Accounts Receivable against virtually any contingency that would make your customer unable to pay. By shifting the risk to the insurance company you are better able to extend larger lines of credit to your customers. Larger lines of credit mean more sales. The cost of this type of insurance is so small that the additional sales done often pays for the cost of the insurance.

You should also know that lenders love Credit Insurance. We work with BOA and all the other banks. When we insure the A/R a lender is ofter able to offer more favorable terms and or pricing because the risk is guaranteed by insurance. Banks often will not lend against foreign A/R, but with insurance, the often will. I have helped close loans that would not have taken place without the insurance in place.

We are also one of the largest Collection Agencies in the world. We collect here in the US or just about anywhere in the world. We are very effective, because often times we are insuring the A/R. If we can't collect well, we take losses. Since we have offices is 60 countries, we can collect foreign A/R. We know the local laws and speak the local language.

If anyone is interested in any of these products, please contact me (212) 560-0419 and I will be glad to assist you.

Regards,

Grow_Safely

I am passing one of my clients to you - they are also out of New York City and based on your address they can't be too far from you either. These guys are building expeditors, who work with the city and the various boroughs to manage the paperwork for architects and contractors. They actually were looking for professional debt collectors, but I think your firm makes more sense. They did a million two in sales last year (All with my brilliant coaching of their sales staff) I assume this is in line with what you consider small to medium sized business?

Who is the contact person at your firm? Is it Mike?

Thanks for the advice. I'll be sure to do that.

Grow_Safely

We can help out with any sort of accounts recievables financing. Give me a call if you'd like to discuss things further.

Josh

B2 Business Finance
704.900.7003
jbernstone@b2businessfinance.com