Invoice Factoring
Turn invoices due in sixty days into cash this week.
A trucking company delivers a load on Monday and is paid by the broker in forty five days. Diesel, the driver and the insurance are due now. Factoring closes that gap. A factor advances 80 to 90 percent of the invoice the day after delivery, collects from the broker when it is due, and sends the balance less a fee. The factor is lending against the broker's credit, not the carrier's, which is why a six month old company with good customers qualifies.
We arrange factoring facilities from $20,000 to $5,000,000 a month in invoice volume, for carriers, staffing firms, subcontractors, manufacturers and service businesses that wait thirty to ninety days to be paid for work already done.
How it works
- 1
You submit invoices for work delivered to business or government customers.
- 2
The factor verifies the invoice and advances 80 to 90 percent within one to two business days.
- 3
Your customer pays the factor on the due date. The factor releases the remaining 10 to 20 percent, less its fee.
- 4
A facility can cover the whole ledger or selected invoices. Trucking commonly uses non-recourse factoring, where the factor absorbs the loss if the customer fails to pay.
Where it fits
- ●Carriers waiting on brokers and shippers.
- ●Staffing agencies paying workers weekly and getting paid in forty five days.
- ●Subcontractors with slow paying general contractors.
- ●Any business whose growth is limited by how long its customers take to pay.
Where it does not
- ●Businesses that sell to consumers or are paid at the point of sale. There is nothing to factor.
- ●Invoices for work not yet completed, or invoices in dispute.
- ●Businesses whose customers have poor credit. The factor is lending against them.
What it typically costs
Factoring fees run 1 to 4 percent of the invoice value per thirty days outstanding, lower for large volumes and strong customers. A $10,000 invoice paid in thirty days at 2 percent costs $200.
Some factors charge setup, wire or monthly minimum fees. All of them are listed before you sign.
Enrichment Capital charges you nothing.
Ranges describe offers commonly seen through our network and are not a quote. Every offer we present shows its own amount, cost, term, payment schedule and total repayment before you sign.
Who usually qualifies
- ●Business to business or business to government invoices on net 15 to net 90 terms.
- ●Customers with reasonable credit and no history of disputes with you.
- ●Monthly invoice volume of $20,000 or more for most factors. Some trucking factors accept less.
- ●Owner credit matters little. Most factors set no minimum.
Questions owners ask
Will my customers know I am factoring?+
With most facilities, yes. The customer is told to pay the factor directly. Factoring is routine in trucking, staffing and construction and carries none of the stigma it once did.
What is the difference between recourse and non-recourse factoring?+
With recourse you buy back an invoice the customer does not pay. With non-recourse the factor absorbs the loss if the customer becomes insolvent. Non-recourse costs a little more.
How quickly can invoice factoring be set up?+
Three to seven business days for the first facility. One to two days per funding after that.
Is factoring a loan?+
No. It is the sale of a receivable. There is no debt on the balance sheet and no fixed repayment schedule. The facility grows with your sales.
Can I factor only some invoices?+
Yes, with spot factoring. The fee per invoice is higher than on a whole ledger facility, but there is no commitment.
Begin with a conversation
One application, a few minutes, your last three months of statements. A member of our team reads the file personally and tells you where you stand, usually within one business day.
Apply for financing