Accounts receivable financing

FactoringClub Articles

Tax Form 8821 and Invoice Factoring

Recently, I had a business prospect applying for factoring services and she became a bit frustrated because the factoring company required tax form 8821. Her thought was “this factoring company seems to want everything!” Well, to some degree she has a point, but let’s discuss why the 8821 tax form is requested for many invoice

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Why do factoring companies hold a reserve?

If you factor a $1000 invoice and the factoring company advances 80%, then you only get $800. The reason they don’t advance $1000 is because they hold back a reserve for contingency purposes. If your customer doesn’t pay the invoice for whatever reason, then the factoring company at least has $200 to help cover the

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Why do factoring companies charge for the full invoice?

The simple answer is it’s standard practice in the factoring industry for factoring companies to price their factoring services as a percentage of the total invoice amount. If you factor a $1000 invoice with an 80% advance rate, the price will be quoted as a percentage of $1000. For instance a factoring rate of 3%

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Invoice financing allows you to rent equity

Having worked with literally hundreds of early stage businesses to date, there have often been discussions on debt vs. equity. The majority of businesses that get referred to me are those just beginning to convert sales and/or are building a strong sales pipeline. Just beginning to see the fruits of countless hours of hard work

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Best Truck Factoring 2018

FactoringClub selected this year’s 5 best freight factoring companies from over 50 companies. Awards were based on factoring terms and features, customer service and overall excellence.

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Best Factoring Companies 2018

FactoringClub selected this year’s 5 best factoring companies from over 100 companies. Awards were based on factoring terms and features, customer service and overall excellence.

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Why Choose Invoice Factoring?

Fledgling businesses, start-up companies, and growing businesses often need to evaluate funding options when cash flow problems arise. As any experienced business person knows, consistent cash flow is one of the keys to a well-run business. Invoice factoring or accounts receivable factoring is an excellent way of helping businesses stay in control of their cash

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Cash Advance vs Invoice Factoring

Business cash advances have made significant inroads into the small business lending market. Fast loans, quick turn-arounds, and easy approvals have made many online lenders an attractive source of funding for businesses that need financing. However, there’s a lot of drawbacks to consider before you go get your one-day approved cash advance. In fact, borrowers should

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How to Choose a Factoring Company

Finding the right factoring company for your business requires diligence, but it’s time well spent and it can save you a lot of headache and trouble. Look a variety of factors such as customer service, factoring costs, and contract terms when making your decision.

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Factoring Rates: Fixed vs Adjustable

In recent years there have been many factoring companies out there offering what seems like impossibly low factoring rates. Often times these rates can be less than even one percent. To any business that has used factoring, these rates sound amazing, and certainly that is the hope of the factoring companies offering these rates. However,

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Accounts Receivable Factoring 101

Invoice factoring is the sale of accounts receivable at a discount before the invoice due date. Your company receives its cash as soon as you invoice your customers, instead of waiting the usual 30, 60 or 90 days later. Since cash is the lifeblood of your company, an interruption of cash flow can have serious,

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Sizing up a Factoring Company for Your Business

If your shopping for a factoring company, you need to consider the size of the factoring company. For our purposes, factoring company size refers to the credit size (or credit facility) that a factoring company offers. Factoring companies come in many sizes as we’ll see below. You want to find the right size as if

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How Does Receivables Factoring Work?

One of the main concerns for small and medium businesses is cash flow. Accounts receivable factoring provides a reliable and efficient method of collection for businesses that don’t have large reserves of cash on hand. Factoring companies help growing businesses improve cash flow and provide an alternative to traditional bank financing. Overview of Accounts Receivable

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Recourse vs Non-recourse Factoring

If you’re looking for factoring services, you may have heard the terms recourse and non-recourse factoring. These are impressive legal terms that dictate what happens in a factoring arrangement if your customer fails to pay an invoice. I know, we dare think such terrible thoughts… but bad things do happen from time to time. If

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Invoice Factoring vs Invoice Discounting

Invoice discounting and invoice factoring relate to similar forms of working capital financing. You get cash advances up-front for your invoices or receivables. In the United States, the two terms often refer to the same thing – invoice factoring. In the UK and Europe however, factoring companies that perform invoice discounting are completely different than

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What Makes a Great Factoring Service?

Using a factoring service is a cost-effective method for improving cash flow that also saves time. However, if you aren’t already familiar with the process of factoring, you might not know what to look for in invoice factoring services. Factoring Club provides expert advice to help you choose your future factoring company, but it also

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Factoring Services and the Benefits

In the last decade, accounts receivable factoring has become a cost-effective and popular option for companies seeking to boost cash flow temporarily or for the long-term. Factoring companies serve different industries, offer varying rates, and have their own requirements. Factoring Rates and Fees The minimum rate percentage charged by most invoice factoring companies varies from

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Factoring Companies vs Collection Agencies

Improving cash flow through the use of factoring receivables is a smart way to free up resources within a cash-strapped company. It’s a simple and useful method for receiving advance funds from invoices. A collection agency is an appropriate method for collecting old invoices that are well past their due date. It’s important that companies

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Invoice Factoring Contracts

Invoice factoring services help businesses avoid the traditional headaches of collections and the lengthy collection delay from invoices that aren’t due for 30 or 60 days. Before entering into an agreement with a factoring company, it’s important for you to examine factoring rates and fees. You may want to check the terms of a few

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Benefits of Factoring Services

One of the essential factors of a business with growth potential is adequate cash flow, and sometimes that’s hard to come by for new businesses. Start-ups, garage businesses, and brand new companies don’t always have the cash reserves on hand to take advantage of growth, as well as to cover standard overhead costs. Invoice factoring

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