Our Solutions
Our Solutions
Domestic & International Factoring
Whether you’re a small business owner looking to improve cash flow, or a company engaged in international trade, factoring can be a valuable financing solution. Domestic factoring involves the conversion of accounts receivable into immediate cash within the same country, while international factoring extends this concept to cross-border transactions. Whether you’re seeking domestic or international factoring we are here to assist you. We work closely with a wide marketplace of factoring companies that understand the unique financing needs of businesses like yours.
Why Factor Financing?
Factoring can benefit businesses by providing quick access to cash, improving cash flow, and reducing the burden of credit management and collections.
How does it work?
Factoring is a financial transaction where a business sells its accounts receivable (invoices) to a third-party company, known as a factor, at a discounted rate. Here’s how factoring typically works:
- Business sells goods or services: A business provides goods or services to its customers and issues invoices for payment, typically with payment terms extending over a certain period (e.g., 30, 60, or 90 days).
- Application to a factor: The business applies to a factoring company, also known as a factor, to sell its invoices. The factor evaluates the creditworthiness of the business's customers rather than the business itself.
- Verification and approval: Once the factor approves the application, they verify the authenticity of the invoices and the creditworthiness of the business's customers. This process ensures that the invoices are valid and collectible.
- Funding: After verification, the factor advances a percentage of the total invoice value to the business, usually ranging from 70% to 90%. This provides immediate cash flow to the business.
- Collection and payment: The factor take over the responsibility of collecting payments from the business's customers. When the customer pays the invoice, they send the payment directly to the factor.
- Reserve and final payment: The factor deducts its fees and holds a reserve, typically around 10% of the total invoice value, as a protection against any unpaid invoices or disputes. The reserve is released to the business once the customer pays the invoice in full.
Request a Consult
FACTOR FINANCING
FAQ
Factoring is not a loan; it involves selling invoices to obtain immediate cash, while a bank loan involves borrowing money that needs to be repaid over time with interest.
International factoring goes beyond borders to help facilitate trade transactions between exporters and importers. By utilizing the services of an international factoring company, you can mitigate the risks associated with international trade, including currency fluctuations, political uncertainties, and payment delays. International factoring provides working capital to exporters, improves cash flow, and enhances their competitiveness in global markets.
Factoring can be beneficial for various businesses, including those experiencing cash flow gaps, rapid growth, seasonal sales fluctuations, or businesses that want to outsource credit management and collections.
The discount rate, also known as the factoring fee, is determined based on factors such as the creditworthiness of the customers, the volume and size of invoices, the industry, and the duration of payment terms.
In non-recourse factoring, the factor assumes the credit risk, and if the customer fails to pay, the factor absorbs the loss. In recourse factoring, the business may be responsible for repurchasing the unpaid invoice or reimbursing the factor.
Generally, businesses have the flexibility to choose which invoices to factor, allowing them to factor selectively based on their cash flow needs. However, certain factors may have specific requirements or minimum invoice amounts.
The factoring process can be relatively quick compared to traditional financing options. Once the factor approves the application and verifies the invoices, funds can be made available within a few business days.
Factoring is often available to businesses with credit challenges or existing debt since the decision is primarily based on the creditworthiness of the customers. Factors focus on the customers’ ability to pay rather than the business’s financial history.
When working with AmRock Financial, you will get to work with a knowledgeable expert on factoring providers that can help you review the terms, rates, and fees associated with factoring to make an informed decision.
Why Amrock Financial?
AmRock Financial hasprovided $1 billion + in financing to more than 400+ small and mid-sized businesses in the US and Canada over the last 16 years, working with a pre-approved network of 1700+banks and Non-bank lenders nationwide.
If you are looking for a business loan, refinancing, or additional working capital, we provide Debt Structures from $1 million to $100 million.
Although banks have reduced lending in today’s market there are many other funding options available to you.
If you’re interested in scheduling a 30 min introductory call, book a meeting here:
Overview of our
Financial Solutions
If you’re in need of financing for your business, asset-based lending provides a unique and flexible solution leveraging your company’s tangible assets.
If you’re a small business owner seeking financing, the U.S. Small Business Administration (SBA) offers a range of loan programs to access affordable capital with favorable terms and flexible repayment options.
Factoring can be a valuable financing solution to improve cash flow. Convert your accounts receivable into immediate cash to optimize your cash flow.
Whether you’re an aviation enthusiast or a business professional seeking to acquire an aircraft, we’re here to guide you through the process.
A specialized financing option designed to help businesses cover the costs of fulfilling customer orders without depleting their working capital.
Trade financing can provide you with the necessary working capital solutions, and risk management tools to navigate the complexities of the global marketplace.
- 1001 Brickell Bay Drive 27th Floor Miami, Florida 33131
- 305-440-8480
- applications@amrockfinancial.com