Invoice Factoring and Invoice Factoring Companies

Imagine having a financing solution that delivers consistent cash to your business, when it’s needed. Invoice factoring with Scale Funding is the source of essential cash when you need it. Factoring is a fast, simple type of financing in which companies get immediate cash for their unpaid invoices, without waiting weeks or months for payment from customers.

Invoice factoring provides consistent cash flow by selling your open receivables (invoices) to a third party known as an invoice factoring company or invoice financing company. Companies use the cash flow to keep up with business demands such as bills, payroll, new resources, and growth.

What is Invoice Factoring?

Scale Funding makes invoice factoring easy. With invoice factoring, a business sells its outstanding invoices for an immediate cash advance. The invoice is sent on to the customer for processing and payment. When the invoice is paid, the remaining balance, less a small fee, is remitted to the client.

Benefits of Invoice Factoring

In addition to the improved cash flow, companies enjoy many additional benefits when they choose factoring as their source of financing.

The benefits of invoice factoring with Scale Funding include:

• Same-Day Cash on Receivables
• Low Factoring Fee’s
• Month-to-Month Contracts
• Customized Programs
• Dedicated AR Specialists
• Full Treasury Services
• Free Credit Checks on New and Potential Customers
• 24/7 Online Reporting
• More than 20 Years of Experience

Get a Quote for Invoice Factoring

Comparing Invoice Factoring Companies

As with any important decision, it’s good to review choices and make comparisons before choosing a factoring company. Make a list of the important things you want from a relationship with an invoice factoring company. A good starting point is the two biggest components in a factoring agreement; rates and services.

Invoice Factoring Advance Rates

The advance rate is the percentage of your invoice amount the factoring company advances when the invoice is funded or purchased. Advance rates vary based upon a number of variables such as industry, payment terms, and type of invoicing. For industries such as Oilfield Services, Staffing, or Transportation 90 percent advance rates are the norm. Lower advance rates such as 60 – 80 percent are standard, for industries with longer payment terms or progress billing.

Invoice Factoring Fees

The factoring fees are the cost of factoring. This fee is deducted from your remittance, once your customer pays the invoice.  Factoring fees are based on two primary variables; the volume of invoices you factor each month, and how long it takes your customer to pay the invoices. There are other considerations that can affect the fees such as the overall concentration on the account and debtor payment histories. Overall, when shopping around and comparing factoring rates, there is often no difference in advance rates. You may find factoring fees vary between top invoice factoring companies. If this happens, be sure to look into and compare the services being offered. Use the invoice factoring calculator to learn more about factoring fees.

Invoice Factoring Services

There can be a big difference when comparing the services offered by factoring companies. The additional services are what most companies appreciate. Here are key services the top invoice factoring companies offer.

• Credit analysis and risk assessment

  This is an extremely valuable service for companies working with new customers or certain customers on an infrequent basis. Knowing a customer’s payment history and their ability to pay invoices, reduces bad debt. This information is also helpful in determining and building long-term relationships with customers.

• Accounts Receivable Management

  A/R management is a key service that frees up time for business owners. The best invoice factoring companies have dedicated A/R Specialists. These professionals work on behalf of the factoring client to make sure invoices are paid in a timely manner. Scale Funding A/R Specialists have good working relationships with all customers. Their experience helps resolve any billing issues so invoices are processed and paid quickly.

• Industry Expertise

  This is crucial for a successful factoring experience. The top factoring companies have staff who are experienced in factoring and knowledgeable about the client’s industry. Understanding how an industry operates, along with the challenges the clients face, helps to resolve issues before they become major problems.

When comparing the best invoice factoring companies, costs are an important element. But be sure to consider the level of service and how you will work with the factoring company over time.

How to Qualify for Invoice Factoring

Companies that provide business-to-business services or work can quickly and easily qualify for invoice factoring.

First, instead of looking at your credit and financial history, we look at your customers’ financials and payment history. Companies that don’t qualify for a bank loan or line of credit can easily qualify for factoring. If you provide service to companies with positive payment histories, it is easy to factor these invoices.

With Scale Funding, you need an average of at least $50,000 in monthly invoices to qualify for our programs. Our factoring lines go up to $10 million per month, giving you plenty of room to grow. Factoring is an ideal financing solution for many companies, as it gives them the working capital they need to grow.

How to Begin Invoice Factoring

Scale Funding tailors invoice factoring programs to fit the unique needs of each client. We work with clients in many different industries, therefore we can customize a factoring program to meet your company’s needs.

Step 1 – Get a Quote

The initial step in securing a factoring line is to speak with a Scale Funding representative. We’ll discuss your cash situation and needs. We will offer a free quote for a factoring line. Our simple and straightforward underwriting guidelines allow most customers to receive a written quote in 15 minutes or less. All quotes are customized for the specific needs of the client. We’ll work to make certain the factoring line meets your requirements.

Step 2 – Submit Invoices and Related Documents

When you agree on a factoring line, we will schedule your first funding. We can accommodate most schedules and offer an expedited service for those in need of immediate cash. During the setup process, we’ll walk you through the agreement and discuss your invoices and any related materials.

Step 3 – Get Cash for Your Invoices

When the set-up process is complete, we begin to fund you. Fundings are transferred via ACH direct deposit or a wire transfer directly into your bank account. From this point forward, each time you send invoices, we’ll process and fund you the same day.

To apply for a custom factoring program fill out the form below or give us a call at (800) 707-4845. We’ll provide a free consultation and quote for a custom factoring program to meet your business demands.