Accounts Receivable Funding

Get Your Company Approved for Unlimited Financing!

Accounts receivable funding, or factoring, is the purchase of business-to-business or business-to government accounts receivable invoices at a discount.  This creates no debt on your books; it is a sale of an asset.  Yes, it is different than a bank.  While it works like many bank credit lines, you do not need to have extensive credit or a great credit history.  Most forms of financing inhibit growth; we encourage it.  This process is called Accounts Receivable Funding.  It is simple, flexible, and has no upper limit!

How does this work?  A company like yours gets financing based on the amount of accounts receivable your business has per month.  For example, if you have sales of $100,000, your advance might be 70%-85% of the value of those receivables as a cash advance deposited into your account the next day.  The amount not advanced on your invoices is held as a reserve.  When you customer pays the entire invoice, the discount fee is deducted from the amount of the reserve and the balance of the invoice is remitted to you.

Example: 

What would you give to have $97,500 today instead of waiting 30, 60 or 90 days to receive your cash?  You can literally unlock the cash tied up in your receivables!  Having this cash in hand would allow your company to take advantage of so many opportunities, paying suppliers early and taking advantage of their 3-5% discount.  Once your account is established, in most cases you can have the cash you need in 48 hours.

Let’s watch your company grow!

Example:  Your company has sales of $1,000,000 per year.  With accounts receivable funding, you could leverage the increased capital to fund growth and increase expansion to double your sales to $2,000,000:

Who can use Accounts Receivable Funding?

Any business-to-business or business-to-government product or service company because accounts receivable funding is based on your customer’s credit, not yours.  We work with companies that are startups, in bankruptcy, and established companies.  Some of the industries we have worked with include temporary staffing, distribution, transportation, marketing, technology services, printing, footwear and apparel, textiles, industrial contracting and manufacturing, janitorial and even private eyes.

Benefits of Accounts Receivable Financing:

• Funds Growth
• Expands Your Sales Force
• Regulates Cash Flow
• Meets Payroll
• Meets Fixed Costs
• Accommodates Seasonal Demands
• Improves Creditworthiness
• Makes Cash Available “On Demand”
• Enables Your “Credit Line” To Grow With Your Business; No Limits
• Creates No Debt
• Proves To Be A Quick And Easy Qualification Process
• Enables Supplier Discount Advantages
• Enables Volume Discount Advantages
• Eliminates Early Payment Discounts To Customers
• Sets Foundation For Detailed Management Reports
• Enables You To Focus On Your Core Business
• Creates No Geographical Limits
• Provides Credit Screening Of Your Customers
• Provides Credit Monitoring

When prospective factoring clients compare factoring to automobile or mortgage lending rates, factoring initially appears expensive. Prospective clients tend to annualize the points charged, equating 3% per month to an interest rate of 36% per year.  This is both an incomplete and incorrect comparison.  First, factors purchase accounts receivable at a discount. They do not lend money. The paper is short-term in nature and management intensive versus a bank loan, which is secured against some stable asset and usually advanced once.  Factors are continuously advancing and collecting accounts receivables, providing clients with ongoing reports, credit due diligence, and personalized account management services.

When prospects make this comparison, we ask them to look at the amount they offer for early payment.  If the standard 2% discount for payment within 10 days is annualized using the thirty-six 10-day periods in a year, they have lost 72%.

Are they really losing 72% for early payment? Of course not.  It is more appropriate to look at the opportunity cost of the funds. If the funds cost 3% per month and you can take them and generate more than a 3% return or save more than 3%, then factoring may be the best alternative.  What amount of return is generated when a company has an order but no way to fill it?  The answer is none.  How much return does a $35.00 overdraft fee generate?

A business must weigh the costs of factoring against not having the immediate cash flow.  Most often the choice is between factoring for increased cash flow or putting up with severe cash flow problems and missed sales opportunities.  

If you are a government vendor and are interested in prequalification for funding, please visit Government Vendor Program

PROBLEM:  You Are Interested In Getting Money Now!

SOLUTION:  Let Us Help You Today!

How Can You Get Started Today?

Start by completing the Profile below.  The attached form (not a binding obligation) is to assist us in obtaining preliminary information about your financing needs.  All information given is retained in the strictest confidence and will only be used by your Business Finance Professional to evaluate your company's specific needs.  Upon receipt of your information, you will be contacted to answer any questions that you may have and to explain the services that may best suit your company.  Or for a “complimentary consultation” and to learn more about our financing programs that can keep your business in complete financial control, call 888-601-5777 today or email us at info@gatewaytocapital.com.