Invoice factoring is for manufacturers, distributors and other types of businesses that sell goods or services to credit worthy commercial accounts. There are several forms of invoice factoring, some of which require a factoring company that specializes in a particular industry.
Traditional Factoring is common in the apparel and furniture industries. Traditional factoring usually implies a non-recourse relationship which means the lender is responsible for the credit worthiness of the customer. This type of accounts receivable factoring is good for companies selling on dated or extended terms as well as companies selling to the big box retailers. Most traditional factoring companies will also offer just credit and collections to companies that do not need working capital.
Non-notification factoring is another type of invoice factoring. With this type of factoring the client's customers do not receive the standard notice of assignment letter from the factor or verification calls. The factor may still verify invoices, however, will do so as if they were calling from the company's accounts receivable department.
Invoice discounting is another form of factoring, however, the client is primarily responsible for credit and collections. Invoice discounting is for larger companies that have a proper accounts receivable department that can manage credit. Invoice discounting can also be on a non-notified basis.
Accounts receivables factoring is another type of factoring which is usually offered on a recourse basis, which means the client is ultimately responsible for making sure the factor is repaid. The factor is responsible for managing the collections process and notifies the factoring client's customer of their involvement through a notice of assignment. If a customer does not pay the invoice is deducted from the client's account and repaid with new invoices or collections.
There are several different types of invoice factoring products available depending on a companies specific needs. Some factoring companies actually cater to one or two specific industries while other factors focus on features such as non-recourse.
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Customized Financing Options
Asset Based Lending
Revolving lines of credit up to $20,000,000
Accounts Receivable Factoring
No minimums, up to $20,000,000
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