accounts receivable financing

Definition

The selling of a company's accounts receivable, at a discount, to a factor, who then assumes
the risk of the account debtors and receives cash as the debtors settle their accounts. A firm that sells its accounts receivable
may not be confident of its ability to collect those debts, or might think that the cost of collecting that debt is more
than the discount which must be provided to the factor when of selling their receivables. also called accounts receivable financing.

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Receivable Financing Frequently Asked Questions
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What is Accounts Receivable Financing?

Accounts receivable financing is the selling of outstanding invoices or receivables at a discount to a finance or factoring company that assumes the risk on the receivables and provides quick cash to your business. The amount of value assigned to the account depends on the age of a receivable. A more current invoice will pay more. Any accounts receivable over 90 days typically are not financed.

Why Invoice Factoring is Necessary

In recent years, an increasing number of businesses have discovered
that invoice factoring can combat the ups and downs of unpredictable cash flow cycles.

More importantly, factoring companies are providing the business community
with a viable credit financing source of working capital when conventional business financing is not always an option.
 

People consider the
invoice factoring
discount a small cost of doing
business. A two-three-percent factoring
discount for a 30-day invoice is common. Compared with the problem
of not having cash when you need it to operate, the receivable credit line
discount is negligible.
Look at the invoice factoring company collecting the  discount as though your business had
offered the customer a
discount for paying cash. It works out the same.


How Invoice Factoring AccountsWorks


Setting up a
factoring relationship is quick and easy in comparison
to other forms of business financing.  Applications simply call for basic
company information and a customer list.  Years of profitability are not
required which makes invoice factoring an option for startups generating accounts receivables.
 It is possible that funding can occur in as little as a couple of
days after the invoice factoring company receives your credit application and invoices.

Benefits of Accounts Factoring Invoices

Factoring invoices can offer many benefits to cash-hungry companies.
Rather than wait 30, 60, 90 days or longer for payment on a
product or service that has already been delivered, a business
can factor (sell) its receivables for cash at a small discount
off the amount of the invoice.

Payroll, marketing efforts, and working capital are
just a few of the business needs that can be met with this instant cash from factoring.

Factoring invoices provides the means for a manufacturer to
replenish inventory and make more products to sell:
There is no longer a need to wait for earlier sales to be paid.
Factoring is not just a cash management tool for manufacturers:
Almost any type of business can benefit from factoring.

 

Why Receivable Factoring
Appeals to the Start-Ups

Factoring is especially appealing to young and rapidly growing companies. Since the invoice factoring process shortens their business cash flow cycle, these businesses can grow faster. The ability to make more products to sell while waiting for invoices to be paid is largely eliminated. Such businesses usually net much more profit with receivables factoring than without, even when the credit discount is considered.

Accounts Receivable Factoring Company vs. Bank Loans

Factoring has been around for thousands of years. Financing companies  pay cash for the right to receive the future payments on your receivables and invoices. An unpaid accounts receivable or invoice has value. It is a  debt your customer has agreed to pay in the near future.

So, why not simply go over to the friendly
banker for an account receivable loan to alleviate cash flow problems? A small business credit loan can be difficult if not impossible to receive, especially for a young, high-growth operation, because small business money bankers are not expected to decrease lending restrictions soon. The relationships between businesses and their small business bankers are not as strong or as dependable as they used to be.
 

Account Receivable Factoring Frequently Asked Questions

Unlike The Others, You Actually Make Money With Our Account Receivable Factoring Rates

 


OUR PROVEN INVOICE FACTORING PROGRAMS
HELP BOOST YOUR CASH PROFITS

Contact our account receivable factoring specialists at:

Toll Free:  888-266-0197

On-Line Factoring
Request Form




Partial List Of Industries That We Provide Factoring
Invoice Factoring Staffing company
Financing credit for staffing service companies accounts.
Financing Building Products Distributor
Financing accounts receivable for clients in the Building Products Distributor industry accounts
Financing Manufacturing company
Financing  accounts receivable invoices for manufacturing 
companies accounts

Invoice Factoring Maintenance Service
Financing  accounts receivable credit for maintenance service companies accounts .
Financing Service Providers
Financing  accounts receivable invoices for small and medium sized service companies
such as commercial suppliers, technology consultants
and janitorial companies,etc.accounts

Financing Metalized coating
Financing  accounts receivable credit for metalized coating service companies.accounts
Invoice Factoring Auto Parts company
Financing  accounts receivable invoices for auto parts 
companies accounts

This form of financing is a type of secured loan in which accounts receivable are pledged as collateral in exchange for cash. The loan is repaid within a specified short-term period as the receivables are collected.

Accounts receivable financing is most often used by businesses facing short-term cash flow problems. The major source of accounts receivable financing for small businesses are commercial finance companies, although banks will also consider receivables as security for a business loan.

Accounts receivable are typically "aged" by the borrower before a value is assigned to them. The older the account, the less value it has. For example, financiers often lend approximately 75 percent of the face value of accounts less than 30 days old. Some lenders don't pay attention to the age of the accounts until they are outstanding for over 90 days, and then they may refuse to finance them. Other lenders apply a graduated scale to value the accounts so that, for instance, accounts that are from 31-60 days old may have a loan-to-value ratio of only 60 percent, and accounts from 61-90 days old are only 30 percent. Delinquencies in the accounts and the overall creditworthiness of the account debtors may also affect the loan-to-value ratio.
Accounts Receivable Financing Powder Coating
Financing  accounts receivable invoices for companies that provide services and products
to Powder Coating clients accounts

 Accounts Receivable Financing Cable Contractors
Financing  accounts receivable invoices for cable contractors 
companies

  Accounts Receivable Financing Utility Construction company
Financing  accounts receivable invoices for utilty construction 
companies accounts

 Invoice Factoring Machine Shop
Financing  accounts receivable invoices for machine shop 
companies accounts

 Accounts Receivable  Financing Oil and Gas Industry
Financing  accounts receivable invoices for companies that provide services and products
to Oil and Gas Companies

  Accounts Receivable Financing Trucking company
Financing  accounts receivable invoices for trucking companies,
freight brokers and commercial transportation companies

Invoice Factoring Freight Forwarding company
Financing  accounts receivable invoices for freight forwarding
companies accounts

 Accounts Receivable  Financing Healthcare Staffing company
Financing  accounts receivable invoices for staffing 
companies accounts

Factoring Government Contracts
Financing  accounts receivable invoices for companies that provide services and products
to state and federal government agencies accounts

Invoice Factoring Distributors
Financing  accounts receivable invoices for distributor
companies accounts

Financing Freight & Trucking

Financing  accounts receivable credit for freight and trucking service companies.
Invoice Factoring Manufacturers
Financing  accounts receivable invoices for companies that provide services and products
to Maunfacturing clients

 Accounts Receivable   Financing Medical Practitioners
Accounts Financing credit for medical practitoner firms   
 Accounts Receivable    Financing Security Guards
Accounts Financing invoices for companies that provide security guards
to commercial, industrial and government sites

Invoice Factoring Temp Staffing Agencies
Accounts Financing invoices for staffing and temporary employment
in the business and medical services field

And Many More


More Links to Help You Find Information



We are currently providing account receivable factoring services nationwide including the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho State, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.


Just Some of The Industries That we Provide Invoice Factoring Services
Freight Factoring
|  Government Contract | Medical Staffing Factoring
|
Temp Staffing Factoring
 |

Oil & Gas Industry Factoring


Staffing invoice factoring company
Building Products Distributor cash flow factoring
Building Products Waterproofing Distributor account factoring
Manufacturing account receivable  factoring
Maintenance Service receivable factoring
Machine Knives invoice financing company

Custom Auto Body for Emergency and accounts receivable factoring company
Municipality Vehicles  factoring  loan
A monthly interest rate on accounts receivable is calculated by applying a daily percentage rate to the receivables outstanding each day (the less the outstanding receivables, the lower the interest charge). A default on payment can result in the financier seizing the pledged accounts receivable. Some states require notice to the business's debtors that their debt has been pledged as loan security. In states that do not have this requirement, some businesses do not notify their customers because the businesses fear that customers might perceive this method of financing as a sign of financial instability.

Parts and Installations business factoring
Metalized coating invoice factoring company
Auto Parts accounts factoring company
Powder Coating invoice factoring
Utility Construction receivables factoring
Machine Shop invoice financing company
Trucking invoice factoring company
Trucking - Refrigerated Freight  factoring
Trucking - Dry Freight truck factoring
Trucking - Over the Road freight  factoring company
Security Services account receivable financing
Commercial & Industrial Refrigeration invoice factoring



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Accounts Receivable Financing Services
For All Industries And All Company Sizes


Business Services Companies
accounts

Trucking and Transportation Companies accounts
Government Contractors Suppliers accounts
Security Companies Guard Agencies accounts
Staffing Temporary Employment Agencies accounts

 

Contact our accounts receivable factoring specialists at:

Toll Free:  888-266-0197

Online Invoice Facoring Request Form

Factoring Articles

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Why A Factoring Company Is Necessary

Factoring Business Benefits

Receivables Factoring History

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