Accounts Receivable Financing:

Receivable financing (factoring) is a method used by businesses to convert sales on credit terms into immediate working capital. The receivable credit line is determined by the financial strength of the customer (Buyer), not the client (The seller of the receivables). Outstanding invoices or receivables are sold at a discount to a finance or factoring company that assumes the risk on the receivables and provides quick cash to your business. The amount of value assigned to the invoice depends on the age of a receivable.

Account receivable financing helps you accelerate cash flow, improve collections and control exposure to bad debts. Factoring has become the preferred method for business such as staffing, government contractors, trucking/transportation, import/export, manufacturing, distribution, wholesale and service companies to access immediate capital.

What does it cost?
Discount and advance rates are based on a combination of items such as industry, invoice size, avg. payment cycle, monthly volume, concentrations, debtor credit worthiness.

• Initial funding usually occurs in 5-10 business days
• Discounts range from 1.35% to 3%
• Advance amounts range from 70-95%
• Advance paid 12-48 hours from receipt of Invoice
• Our target Invoice range is $10,000 to $50 million per month
• Additional options - No minimum, Open-ended contract, Non-notification, Spot transactions

Sectors of Interest:

* Distributors

* Wholesalers

* Manufacturing companies

* Importers/Exporters

* Resellers

* Government contractors

* Staffing agencies

* Office supply companies

* Oil industry companies

* Technology companies

* Transportation brokers

* Trucking companies (1 rig or lg. fleet)

* Janitorial and cleaning companies

* Individual and Group Medical Practices/Walk-in Clinics

* Imaging Centers

* Security guard companies

* Medical Doctors

* Durable / Home Medical Equipment Companies

* Group Homes (Adult and Children)

* Home Health Care Companies

* Drug / Substance / Alcohol Abuse Centers

* Hospitals

* Medical supply companies

* Medical Transport

* Supplemental Educational Service Providers

* Courier services

* Call center operators

Receivable Funding Benefits:

* extend credit to customers

* Make a strategic acquisition using your targets own receivables

* Obtain volume discounts and/or early discounts for paying early

* Increase profit margins

* No worry about wholesale minimum order sizes

* Participate in supplier special offerings that require upfront payment

* Avoid lost sales from lack of inventory, especially during peak selling seasons

* Purchase more inventory than your cash flow or wholesaler credit may allow

* Maximize seasonal buying opportunities

* Take advantage of wholesaler closeouts, overstocks, liquidation, off-season deals, ect.

* access to the necessary funds for operations and growth

* Pay off high interest debt

* pay back taxes and liens and fund payroll

 

Traditional Account Receivable Financing:

A company has receivables when money is owed by a customer (individuals or corporations) to the vendor in exchange for goods or services rendered. The receivables usually come in the form of an invoice providing terms for payment and are usually due within a relatively short period of time (30, 60, 90 days).

This means a service has been provided or a sale made that the company has not collected the money from the purchaser yet. Most companies operate this way. This allows frequent customers to avoid the hassle of making cash payments for each transaction. Factoring the receivable allows the company to access the money due immediately for continued day to day operations.

Sample transaction:
• An invoice is created for services or goods delivered.
• Your Company sends an Invoice to the Factor for $ 100,000.00 billed to ABC Company on 1/4/08
• Factor verifies the invoice to ABC Company on or before 1/5/08
• Factor will wire a check to Your Company in the amount of $85,000.00, or 85% of total invoice amount on or before 1/6/08
• ABC Company pays Factor $100,00.00 on 2/3/08
• Factor will wire remaining balance to Your Company, $15,000.00, on or before 2/4/08, minus the Discount Fee


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Purchase Order Finance:
Purchase Order financing is short term funding solution used to finance the purchase or manufacture of specific goods that have been pre-sold by you to a creditworthy end customer. PO Funding allows you to facilitate sales that exceed your current financial capabilities while you continue on a strong path of growth.

Often suppliers want you to pay upon delivery while your customer needs 30-90 day terms. Labor, packing, shipping and other costs still must be paid. Cash received or advanced against a purchase order is used to pay these upfront costs required to fulfill the order. Funds are available for confirmed orders, one-off sales, large orders, and seasonal sales. Don’t let the size of an order intimidate you from bidding on and winning new business.

Once you produce, ship, and send an invoice for the goods we will finance the receivable and buyout it's interest through a traditional A/R factoring program.

How Does It Work?
PO financing is simple to use and easily integrates into your business.
Your client issues a purchase order to your company
A letter of credit or bank wire is issued, on your behalf, to your supplier
The goods are delivered and accepted by your customer
You send an invoice to the client
Your client pays the invoice and the transaction is settled (If you offer terms to you buyer a receivable factoring facility would be created for terms up to 90 days).

Do You Qualify?
You must have a minimum of $50,000 in monthly sales
Your company must buy finished goods from a 3rd party and resell them
If your company develops products, you must used an outsourced (3rd party) manufacturing company
You must sell products/goods to other companies or the Government
Transactions must have a minimum profit margin of 20%-30%

Top 5 Benefits
1 - PO funding can help you take large order and close big sales
2 - Available to established companies and start-ups
3 - Purchase order funding can provide up to 100% of the financing necessary to pay your local or foreign suppliers
4 - Grows with your sales
5 - PO financing is easy to obtain and can be set up in days



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Staffing Financing:
Is your Employment Staffing or IT Consulting Firm growing faster than your operating capital? As a business grows it requires greater access to increasing cash flow in order to deal with overlapping pay cycles and cover its payroll needs. Start ups are welcome.


Financing staffing invoices is available to firms needing as little as $5,000 a month or in excess of $10 million for larger companies. Initial funding may be accessed in as little as 3-5 working days.
Receive up to 90% of their value in cash within 24 hours. This allows your business access to an ongoing supply of cash relative to your sales. So as your business grows so does the amount of funds available to you.


How Does It Work:

You send the original invoices with proof of performance (time sheets). The service must be performed before funding.

The invoice is verified and then the advance is funded, typically 90% of the invoice depending on the credit worthiness of your customers. Funds will be advanced within 24hrs. following verification of the invoices, typically the same day that they are received. The balance of the advance is called the "Reserve". The reserve is held back until the customer pays the invoice in full.

Payment of the invoices are made directly to us from your customers. Once received, the reserve is paid to you minus a small discount fee.

At your option, the funds are sent via wire transfer, ACH or check.

Credit approval for new accounts is easy. All is needed is the name and address of the customer.

Due diligence of liens and pending lawsuits of your company will be performed prior to funding.

Payroll Management & Invoicing Services:
Let us customize a comprehensive payroll management and invoicing service package to free up your time and remove many of the headaches out of running the administration of your business.


Payroll Services Include:

  • Payroll services
  • Web based program
  • Complete payroll preparation and processing
  • Check printing at any location
  • Timely tax deposits (Federal, State, Local)
  • W-2's, including magnetic film
  • Direct Deposits
  • Worker's Compensation Program
  • Debit Card Program
  • 24-Hour Turnround
  • Extensive Weekly and Quarterly Reporting, and Filing where appropriate
  • Invoicing services
  • Invoice preparation and printing
  • Integration with receivables funding
  • Sales Reports
  • Full back office
  • Includes the above payroll and invoicing services plus;
  • Extensive HR reporting
  • Tracking of workers compensation
  • Profit reporting by company, client and employee
  • Additional services
  • Discounted Insurance
  • 401K and Retirement Planning Advice for Employees

Staffing Industries of Interest -
Professional:

Twin Plant Management and Engineers
Sales - Marketing - Sales Managers
Accounting - Controllers - CPA's
Healthcare - PTs - RNs - CNAs - OTs - MDs
Data Processing - I.T. - Web Design
Mid Management - Administrative - Technical

Office Services:

Office Managers - Administrators
Full Charge Bookkeepers - Accounting Clerks
Admin Assistants - Executive - Legal Secretaries
Clerical - General Office - Data Entry
Doctor's Office Assistants - Medical Secretaries
Call Center Phone Attendants and More

Manufacturing Services:

Assembly - Warehouse - Quality Control - Quality Assurance
Plastic Injection Molding
Warehouse distribution
Skilled - Unskilled Labor
Light Industrial - Machine Operators
Fork Lift Operators - Loaders /Unloaders
Electronics Assembly - Packers

Transportation/Freight Bill Funding:
Freight Bill Funding programs serve to relieve cash flow problems and free up your time to run your trucking business at its optimum level. Freight Bill Financing helps free up necessary capital and streamline the administrative side of your business.
Freight Bills = Quick Cash

The initial funding process, from receipt of a completed application, typically takes from two to six business days, depending upon the size of your trucking business.  After your initial funding you will receive up to a 95% advance on your freight bills the next business day. Discounts on rates and increased release rates are available for larger accounts. We have flexible funding options and services allowing us to tailor a product to meet your transportation company's specific needs.


Freight Bill funding programs offer you options and services such as:

  • Cash within 24 hours to either your funding bank account or loaded directly to a specialized Fuel Card
  • Free online credit checks on your clients, updated weekly, available 24 hours / 7 days a week
  • Back Office Management,  issuing statements, mailing of invoices, verification and professional collection calls
  • Bad Debt Protection, if you choose to include this with your facility; non-recourse is available for facilities up to $100,000
  • Online Access to your facility with full reporting
  • Online Imaging, access to images of remittances / checks received from your clients

 

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Leasing:

EXPRESS LEASE Application only program up to $75,000

• No Financial Disclosure
• 24hr Credit Approval
• Completed Signed Lease Application required
• Application-only $250,000 for heavy collateral (Comparable Credit Req.)

FLEXIBLE LEASE financing on new or used equipment.

This covers soft costs such as installation, freight, and taxes. Also includes specially structured lease plans to accommodate our customers cash flow needs. 
• Lease plans for Start-Up companies
• FMV, 10% Purchase Option, $1 B/Out Option
• Trac-Lease for Commercial Vehicles
• Deferred payment plans
• Seasonal, Step & Skip payment plans

COMMERCIAL LEASE (Full financial disclosure)
• Fixed rates as low at the current prime interest rate
• Lines of credit available up to $5,000,000.
• 3-4 Day Credit approval with complete financial package

Operating Lease
The most classic equipment leasing option available, an operating lease (or true lease) structures the lease agreement to provide 100% tax deductibility on lease payments as a capital expense. The leased equipment is classified as a rental, allowing the lessee to transfer obligation of the equipment to the lessor at the end of the term.

Capital Lease
The optimal choice for long-term equipment plans and intended eventual ownership; a capital lease (similar to a finance lease) classifies equipment as being owned by the lessee, allowing the lessee to claim tax deductions on the equipment depreciation. A capital lease usually provides a more attractive purchase incentive at the end of the lease term.

Equipment Finance Agreement (EFA)
A method of equipment financing with fixed payments for a predetermined number of months, where the borrower owns the equipment and the lender merely retains a security interest through the transaction. Between the borrower and an equipment lessor, this sort of agreement is used as a method of refinancing equipment after the lessee has already received and paid for the equipment, but prefers to spread the expensed capital over a payment term. Both the depreciated value of the equipment and the interest on finance payments are tax deductible to the borrower. The equipment finance agreement is an equipment loan.

Most Common "End of Lease" Options

$1.00 BUYOUT
Also known as a capital lease and finance lease, $1.00 buyout is the closest option to straight bank financing. The lessee fulfills payment requirements for the duration of the lease, and once final payment is made along with $1.00, he/she becomes owner of the equipment. 
Additionally, equipment must be shown as an asset and depreciated. It is not recommended that the equipment be written off as a rental expense. This simple option requires no further obligation, but one might keep in mind the monthly payments are slightly higher than an operating lease.

FAIR MARKET VALUE
Also known as an operating lease, this option may be tax deductible under IRS guidelines and payments can be written off. The equipment can be purchased at the end of the lease for its current fair market value (an estimated 10%) or the lessee can return the equipment with no further obligations.

10% PUT or PURCHASE OPTION
Also considered a combination of the capital and operating leases, this option can be 10%, 15%, or 20%. The lessee has the option to pay a predetermined percent of the original equipment cost at the end of the lease, or walk away. By leaving a residual at the end of the lease, the monthly payments are lowered.

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