With accounts receivable financing you can get funded today for invoices that aren't due for 30 days, 60 days, 90 days, or longer. Since the factoring company is purchasing your accounts receivable from you, you aren't taking on any new debt when you factor.
When you factor your receivables you not only get improved cash flow but you can also outsource your entire accounts receivable department. Your factoring company will handle all of your credit checking and take care of all of your collections for you.
As an added benefit, non-recourse factoring insures your receivables against companies who are unable to pay for your product. Your factoring company assumes responsibility for accounts that can not pay due to financial reasons.
When you receive a purchase order you submit it to your factoring company for approval. Your factoring company will give you a quick response, often times in half an hour or less.
Once your order is approved you can ship the merchandise or perform the service and invoice your customer. You will send copies of the invoice and shipping documents or backup to your factoring company and they will fund you the same day.
At this point your job is done, your factoring company will handle all of the collection work for you. You no longer have to worry about making collection calls or sending out account statements, and with non-recourse factoring, your receivables are insured against companies who are unable to pay.
The funds you receive from your factoring company are yours. They can be used for payroll, to pay your suppliers, for rent, marketing, or whatever else you need. With factoring you will be able to handle larger and more frequent orders.