Receivables Factoring

Payroll funding provides cash flow for temporary staffing agencies.

Payroll Funding

Payroll funding is the regular process or cycle of billing your customers, paying your employees and getting funded by a factoring company. It’s most often used by staffing companies that are in early-stage or growth-stage business cycles. Since there are about 20,000 staffing and recruiting companies in the U.S., payroll funding is very common. Staffing …

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Invoice factoring contracts

Factoring Services

It’s important to compare different criteria when looking for factoring services. Factoring companies serve different industries, offer different rates, and provide different levels of customer service. Factoring Rates and Fees The minimum rate percentage charged by most invoice factoring companies varies from one to two percent. Rates can increase as the receivables age and factoring …

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Tax Form 8821

Many factoring companies require tax form 8821 before signing a factoring services agreement. I recently had a factoring prospect applying for factoring services when she became frustrated because the factoring company required tax form 8821. Her thought was “this factoring company seems to want everything!” The IRS tax form 8821 legally authorizes a factoring company …

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Invoice factoring reserve for bad debts.

Factoring Reserves

Factoring companies typically don’t advance the full invoice amount because they hold back a reserve for contingency purposes. If you factor a $1,000 invoice and the factoring company advances 80%, then you only get $800. If your customer doesn’t pay the invoice for whatever reason, then the factoring company at least has $200 to help …

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Online Lending

Online lending has made significant inroads into the small business lending market. Fast loans, quick turn-around, 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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Factoring Rates

Factoring rate structures come in basically two different varieties – fixed and adjustable. In recent years there have been many factoring companies offering what appears to be extremely low factoring rates, often less than one percent. However, like most things in life, if it’s too good to be true, it usually is. The reason why these …

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Factoring Credit Facilities

If your shopping for a factoring company, you need to consider the credit facility or credit limit available. Factoring facilities come in many sizes as we’ll see below. Credit Facility Sizes Vary Factoring companies offer credit facilities according to their debt capacity. Some factoring companies specialize in credit facilities below $25,000, while normal facilities are in …

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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 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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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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Factoring Agreements

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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Bank Lending vs Factoring

One of the primary reasons businesses choose invoice factoring or accounts receivable financing is because it’s an efficient way to ensure cash flow. There is a variety of advantages a company may enjoy with receivables factoring rather than a traditional bank loan. It’s a valuable exercise to consider the differences between each option to ensure …

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