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What is Accounts Receivable Factoring |
Accounts Receivable Factoring
Structuring Solutions to Meet Your Needs. Factoring, (also known as accounts receivable factoring and factoring account receivable ), is the sale of invoices for immediate cash. Factoring frees up your money locked up in accounts receivable (unpaid customer invoices) for long periods of time. With accounts receivable factoring you can turn unpaid invoices into immediate cash to pay bills, improve cash flow, expand your business, pay off debt and take advantage of new opportunities. Factoring provides you with debt-free cash if you have invoices for delivered services or products to commercial businesses or federal, state and local government. Factoring account receivable is already earned income (you have performed a service or delivered a product) so there is no debt associated with it. Accounts receivable factoring is a cash flow solution that does not require borrowing or giving up ownership in your business. Typically, an accounts receivable factoring company makes cash available to you from 65% to 90% of the face value of your invoices. The balance, less a service fee, is paid to you by CapitalPlus when your customer (one who receives the invoice) pays. In the meantime, you have a large portion of your money to use as you see fit. In addition, CapitalPlus now waits to be paid instead of you. Although accounts receivable factoring is a respected financing tool that has been around for decades and is used by small and large businesses, it is not for every business. It may not suited for a business that is not growing or for a business with timely and prompt invoice payments. Factoring is beneficial to growing companies, enabling them to continue to grow and expand. It is a ready source for cash for businesses too new to have, or growing too fast for, adequate traditional financing, such as bank financing. Let CapitalPlus be your accounts receivable factoring company.
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