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More information on Factoring Loans
Accounts Receivable Factoring is a financial transaction whereby a business sells its accounts receivable (invoices) to a Factoring Loan Company at a discount in exchange for immediate cash.
Factoring is different from a bank loan in two significant ways. First, the Factoring Loans Company places the emphasis on the value of the receivables, not necessarily the firm’s credit worthiness or fixed assets. Secondly, factoring is not a loan – it is the purchase of a financial asset (the receivable). The receivable is a financial asset associated with the debtor’s Liability to pay money owed to the seller for work performed or goods sold. The seller sells its invoices (the receivables) at a discount to the Factoring Invoice Company to obtain the cash needed for day-to-day operations.
The sale of the receivables (or invoice) transfers ownership of the receivables to the Factoring Loans Company. The account debtor is then notified of the sale and then remits payment directly to the Factoring Companies Lockbox.
Factoring Loans Companies provide other mission critical services including Credit Analysis, Risk Assessment, AR Management, Billing, Collection, Treasury and 24/7 web reporting.
There are three integral parts to a Accounts Receivable Factoring transaction.
1. The Fee, this is the amount a Factoring Account Receivable company will charge you for the service. Most Factoring Account Receivable companies will charge you a Factoring Fee also known as a service charge as well as interest based on how long it takes the debtor to pay.
2. The Advance, this is the percentage of the Face value of the invoice you will be paid upon submission of that invoice.
3. The reserve, this is the remainder of the total invoice amount held until the payment by the account debtor is made in full.
There are many different ways Factoring companies call this service including, Business Factoring, Factoring Business, Factoring Companies, Factoring Loans and Factoring Invoice.
TCI Factoring Loans is a leading Factoring Loans company. We provide our Factoring Services to a wide variety of small to mid size companies.
We have earned a reputation for providing world-class service to companies who need Factoring Services for their businesses. When searching for Factoring Companies, look no further than TCI Factoring Loans.
Banks often call their Financial Factoring programs Factoring Loans. Don’t be confused with this statement because factoring your accounts receivables is not a loan. Financial Factoring is simply the sale of your Invoice at a discount to a Factoring Company.
Are you interested in learning more about our Factoring Business?
Call today and talk to one of our factoring specialists. Our factoring specialists will give a free consultation on how invoice factoring can help your business succeed. With TCI Factoring Loans there is no red tape to cut through or bureaucratic maze to navigate. We make the factoring application process simple and straightforward, what more, we’ll get you approved in just 5 minutes.
Want to learn more about Factoring Loans? Call 800.707.4838 or Click here
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