Accounts Receivable Financing - a.k.a. FACTORING

The process of transaction accounts receivable in the secondary market is called factoring.

Factoring is the purchase of accounts receivable from a business at a discount. Factoring allows businesses to collect the money they are owed immediately by accepting a discounted (reduced) amount of the invoice from a third party.

In a factoring transaction, a business sells one or more invoices to a factor. A factor is a funding source that specializes in funding accounts receivable.

When a business enters a factoring arrangement, the factor bases the purchase on the credit of the business's customers, not on the credit of the business itself.

Here's how it goes:

1. You contact me and we fill out a one-page "Client Profile" form to be sent to the factor.
2. We talk with a factor regarding terms and fees.
3. The factor sends out the contract Priority Mail.
4. You sign the agreement and mail it back.
5. Your account is open and the factor sends, or wire-transfers, an advance, to be determined at conference call.
6. Once invoice is paid, you get the remainder minus a fee, also determined at conference call.

First time around, you get funded in (5) FIVE working days!!!! Once your account is set up, you get funded within 24 hours. One thing to keep in mind is that I, as a consultant, get paid by the factor.