Any debtor account (customer) whose invoices are sold and advanced on by the lender (Factor).
Invoice Factoring is a type of financial lending wherein a business sells its A/R (invoices) to a third party (factor) who then advances up to 95% of the gross invoice amounts back to the business. Factoring allows businesses to meet their immediate cash needs, mitigate customer credit risk, and decrease Days Sales Outstanding (DSO).
Factoring Discount Fee
The Discount Fee is the cost of using Invoice Factoring, A/R Management, and Credit Protection from Porter Capital. The factoring rate is typically based on your monthly volume and your customers’ credit worthiness.
A term used to indicate a condition where a company breaks, or cannot fully meet, its promises to creditors. This is typically due to a lack of cash flow available to meet obligations. If financial distress is not relieved, it can lead to bankruptcy.
Invoice Factoring is an easy way to resolve financial stresses by allowing immediate access to capital held up in A/R.
These documents report a company’s sales, expenses, profits, assets, liabilities, and net worth. They are typically made up of:
1. Income Statement
2. Balance Sheet
3. Profit & Loss (P&L) Statement
4. Owners’ Personal Financial Statements