Factoring FAQ
Isn't Factoring Expensive? Factoring can be very cost effective when you look at the services provided in addition to funding. We perform a credit analysis on all existing and potential customers so that an informed decision is made on extending credit. This greatly reduces bad debt losses and the expense of chasing them. Second, we provide a professional collections team that saves the business time and expense of following up on invoices for payment. Finally, we provide advanced systems and reporting so you always know the status of your cash flow. Many businesses can justify the cost based on the administrative savings alone.
Is Factoring a type of Loan? No, with factoring we actually purchase the invoice from you. Additional debt may violate existing credit agreements. Factoring adds no debt and because you eliminate receivables, your balance sheet is stronger.
Doesn't a Bank Loan Make More Sense? When a bank says no to a loan, many times we can say yes. We also provide servicing that allows a business owner to focus on operating and growing their business. Your Liquid Capital professional can work with you and your financial advisors to determine the appropriate mix of funding for your business. Factoring also builds a stronger balance sheet and stronger credit so that eventually you can qualify for other debt products as well.
How Quickly is Funding Available? Once your relationship is established, we can fund valid invoices within 24 hours, sometimes on the same day.
How are Fees Determined? Fees vary based on the size of the client, the nature of the business and its customers and the number and amount of the invoices involved. For more information on pricing, see the pricing section of our website.