Frequently Asked Questions
Q: What does Invoice Discounting offer my company?
A: Factoring provides you with cash today rather than waiting for payment from your customer. This ensures that you can meet current obligations and know that you have the financing in place for your next major sale. Invoice Discounting is short term financing that grows as quickly as your business.
Q: What does factoring cost?
A: There are many factors such as industry, volume, payment terms etc that may influence the rates but it is generally between 1% and 5% per thirty days.
Q: What amount or percentage of invoice will you advance?
A: Advances are between 70% and 95% of the face value of eligible invoices and are established at the time an account is opened. Established advances will for the most part depend on risk factors such as industry, terms of sales and delivery, volume, lien priority, time outstanding, client relations, experience etc..
Q: When, how, and how often are advances paid?
A: The time and frequency of advances often depends on when and how frequently you submit invoices for funding, whether it is early or late, daily, weekly, bi-weekly or monthly. Advances can be paid in any number of ways; the typical way is by wire transfer, other payment options are available.
Q: When will any balance amounts be released?
A: All balances less applicable fees will be rebated to you after it is collected.
Q: Will I be required to sign a long term contract?
A: A long-term contract is not usually required but, may be necessary in order to be viable and induce Factor to underwrite your funding and extend more favorable rates and terms to you.
Q: How can I qualify?
A: You qualify if you are a legally registered business selling goods or services on terms to other credit-worthy and reputable businesses, and you have full and unencumbered rights to receive payments.
Q: What if I have some credit issues, a prior bankruptcy, existing loan or line of credit?
A: One of the unique benefits of factoring is that eligibility is largely based on the credit-worthiness of your customers –the individual or organization who will be paying for the goods or services sold. There’s very little if any consideration at all on your credit. You may be eligible to factor even if you have some credit issues, on-going bankruptcy, loans, or other lines of credit.
Q: Do you work with small businesses and start-ups?
A: Yes, the majority of factoring clients are small businesses and start ups.
Q: What specific documents do you require?
A: The typical initial documents required to open an account are: Proof of business registration, photo identification of principals, customer list, invoices, and copy of accounts receivable aging.
Q: What size of transaction will you finance?
A: Will finance transactions up to $10 million.
Q: Will you purchase invoices if my company already has Bank financing?
A: Yes. Invoice Discounting can generally be used in conjunction with your present Bank financing.
Q: Who does the collections, you or us?
A: Once you start factoring, Factor will be responsible for and will do all collections on funded invoices unless exceptions are made.
Q: Do you have any geographical restrictions, industries, or areas you won’t factor?
A: No, as long as you are located in Canada., its territories, and USA, there are no other geographic or territorial restrictions and we can also provide some international factoring.
Q: Does my company have to sell all of its receivables?
A: No. You can sell as few or as many invoices as you wish.
Q: How can I keep track of invoices and payments?
A: You’ll receive regular reports. In most cases, you will have direct online access 24/7 to your reports using your very own unique access code. Or you can request reports by fax, email, or call.
Q: What if a customer doesn’t pay an invoice?
A: What happens if a customer does not pay will depend on how your account is set up. An account may be set up in one of two ways -recourse or non-recourse. A recourse account requires a guarantee that you will either buy back unpaid invoices, swap it out, or deduct the amount from your reserve funds in-full or progressively until paid in full. With a non-recourse account the loss will be absorbed under certain conditions.
Q: Do I have to sign a personal guarantee?
A: Yes, some form of guarantee will be required to affirm your integrity, representations, warranties, and the validity of your statements, documents, attesting that you will perform as per the terms and conditions of the agreement and not commit fraud.
Q: What happens if I stop factoring?
A: To stop factoring you should send notice of termination as per your agreement. After all accounts are paid in full and all obligations under the terms and conditions of agreement has been satisfied, your remaining reserves and future receipts will be paid to you, and a general release will be completed.
A: Factoring provides you with cash today rather than waiting for payment from your customer. This ensures that you can meet current obligations and know that you have the financing in place for your next major sale. Invoice Discounting is short term financing that grows as quickly as your business.
Q: What does factoring cost?
A: There are many factors such as industry, volume, payment terms etc that may influence the rates but it is generally between 1% and 5% per thirty days.
Q: What amount or percentage of invoice will you advance?
A: Advances are between 70% and 95% of the face value of eligible invoices and are established at the time an account is opened. Established advances will for the most part depend on risk factors such as industry, terms of sales and delivery, volume, lien priority, time outstanding, client relations, experience etc..
Q: When, how, and how often are advances paid?
A: The time and frequency of advances often depends on when and how frequently you submit invoices for funding, whether it is early or late, daily, weekly, bi-weekly or monthly. Advances can be paid in any number of ways; the typical way is by wire transfer, other payment options are available.
Q: When will any balance amounts be released?
A: All balances less applicable fees will be rebated to you after it is collected.
Q: Will I be required to sign a long term contract?
A: A long-term contract is not usually required but, may be necessary in order to be viable and induce Factor to underwrite your funding and extend more favorable rates and terms to you.
Q: How can I qualify?
A: You qualify if you are a legally registered business selling goods or services on terms to other credit-worthy and reputable businesses, and you have full and unencumbered rights to receive payments.
Q: What if I have some credit issues, a prior bankruptcy, existing loan or line of credit?
A: One of the unique benefits of factoring is that eligibility is largely based on the credit-worthiness of your customers –the individual or organization who will be paying for the goods or services sold. There’s very little if any consideration at all on your credit. You may be eligible to factor even if you have some credit issues, on-going bankruptcy, loans, or other lines of credit.
Q: Do you work with small businesses and start-ups?
A: Yes, the majority of factoring clients are small businesses and start ups.
Q: What specific documents do you require?
A: The typical initial documents required to open an account are: Proof of business registration, photo identification of principals, customer list, invoices, and copy of accounts receivable aging.
Q: What size of transaction will you finance?
A: Will finance transactions up to $10 million.
Q: Will you purchase invoices if my company already has Bank financing?
A: Yes. Invoice Discounting can generally be used in conjunction with your present Bank financing.
Q: Who does the collections, you or us?
A: Once you start factoring, Factor will be responsible for and will do all collections on funded invoices unless exceptions are made.
Q: Do you have any geographical restrictions, industries, or areas you won’t factor?
A: No, as long as you are located in Canada., its territories, and USA, there are no other geographic or territorial restrictions and we can also provide some international factoring.
Q: Does my company have to sell all of its receivables?
A: No. You can sell as few or as many invoices as you wish.
Q: How can I keep track of invoices and payments?
A: You’ll receive regular reports. In most cases, you will have direct online access 24/7 to your reports using your very own unique access code. Or you can request reports by fax, email, or call.
Q: What if a customer doesn’t pay an invoice?
A: What happens if a customer does not pay will depend on how your account is set up. An account may be set up in one of two ways -recourse or non-recourse. A recourse account requires a guarantee that you will either buy back unpaid invoices, swap it out, or deduct the amount from your reserve funds in-full or progressively until paid in full. With a non-recourse account the loss will be absorbed under certain conditions.
Q: Do I have to sign a personal guarantee?
A: Yes, some form of guarantee will be required to affirm your integrity, representations, warranties, and the validity of your statements, documents, attesting that you will perform as per the terms and conditions of the agreement and not commit fraud.
Q: What happens if I stop factoring?
A: To stop factoring you should send notice of termination as per your agreement. After all accounts are paid in full and all obligations under the terms and conditions of agreement has been satisfied, your remaining reserves and future receipts will be paid to you, and a general release will be completed.