Is Invoice Factoring For
The key to knowing if factoring is
for you is to not to look only at the
bottom-line factoring fee,
but also to consider how your company
may increase it's profits through factoring.
Here is additional
information on factoring
to help you with your decision.
How are invoice factoring fees
and advance rates determined?
It is based on several factors:
The creditworthiness of your clients
Your monthly billing volume
Average invoice size
Average days to payment
Fees can range from 2-5 % of
the invoice's face value.
For example if the invoice's value
is $1,000; a fee of 3% equals $30.
What is an
The amount of money you
when we buy your invoice.
The balance is returned to you when
your customer pays the invoice.
Advances range from 60-95%
of the invoice's face value.
For example if the invoice's value is
$1,000 an advance rate of 80% equals $800.
The balance of $200 less the
factoring fee is returned to you when your
customer pays the invoice.
Comparing Bank Lending Rates to Factoring?
When compared to bank lending rates, factoring
initially appears to be very expensive.
Here are five typical questions/concerns
that are raised by potential factoring clients
|Monthly Gross Sales||$50,000|
|Cost of Goods Sold||$30,000||60% of Gross Sales|
|Monthly Gross Profit||$20,000||40% of Gross Sales|
|Variable Expenses||$8,500||17% of Gross sales|
|Total Expenses||$18,500||37% of Gross Sales|
|Monthly Net Profit||$1,500||3% of Gross Sales|
|Monthly Gross Sales||$100,000|
|Cost of Goods Sold||$60,000||60% of Gross Sales|
|Monthly Gross Profit||$40,000||40% of Gross Sales|
|Variable Expenses||$17,000||17% of Gross Sales|
|Factoring Fee||$3,000||3% Fee|
|Total Expenses||$30,000||30% of Gross Sales|
|Monthly Net Profit||$10,000||10% of Gross Sales|
We are a nationwide company offering
customers tell us that our combination
other invoice factoring companies,
"In all my
years of finance experience I have found you as being the best source,
your personal touch and commitment to us has made our relationship a great
blend of business and friendship."