Asset based lending (ABL), is a great solution for businesses that have needs that are outside the realm of what traditional banks can offer. Whether it’s greater leverage, softer covenants, or more flexibility, asset based structures can be customized to meet the needs of each individual company. Asset based lending provides a line of credit based on your company’s eligible:

• Accounts receivable

• Inventory

• Machinery and equipment

Asset based lending offers more flexibility than other methods of financing, and is a fast and cost-effective way to obtain working capital. Unlike certain types of structured financial products, with an asset based lending relationship, you do not have to give up equity in your company. ABL gives your company the flexibility it needs to grow, recapitalize, take advantage of supplier discounts, buyout shareholders, or even to fund payroll. It can increase or decrease based on your current business size and needs, and you’ll have daily and weekly access to your line of credit when you request it.

Purchase order financing is designed for growing businesses with little access to working capital and/or poor cash flow. The type of business that qualifies is usually a producer, distributor, wholesaler or reseller of manufactured products.

Factors make funding decisions based on the credit worthiness of their customers. Banks make credit decisions based on a company’s financial history, cash flow, and collateral. For this reason, banks tend not to lend to startups, businesses operating for a short period of time, businesses that have had losses (even if the loss was due to startup costs), past problems in the business, and a wide range of ‘red flags’. The factor is more interested in the credit worthiness of your customers and not in any skeletons that may be in the closet. A factor is more interested in what you are doing today, what you can do tomorrow, and less concerned about what happened to you yesterday.

Sometimes, companies with recurring cash flow problems can’t afford to wait 30, 60 or even 90 days for invoice payment. They need cash to meet immediate financial demands. Factoring helps provides this cash by funding the purchase of accounts receivable, often within 24 hours after invoices are created. More often, companies are looking for a safe, simple way to fund their company. Factoring provides a continuous and reliable form of funding. This allows a company to better plan their production and purchasing for the next sale, without having to plan around potential wide fluctuations in cash flow waiting on customers to pay.

Factors typically advance 80-90% of your receivables immediately, and the balance (less fees) when invoices are paid. Example: if you have $10,000 in accounts receivable on your books, you could receive up to $9,000 to support working capital needs. The balance due to you of $1,000 (less fees) will be paid to you when your customer pays the invoice. As your sales increase, so will your receivables, and so will the amount of working capital support available to you on an ongoing basis. Factoring may be the best way of financing sales, because the amount available to fund your cash flow needs grows in direct proportion to sales success.

Most Factors funding decisions are based on the credit worthiness of your customers, not on your credit. Factors are less concerned about your past and are more interested in what you are doing today, and what you believe your potential is for tomorrow.

Absolutely not. Factoring is a viable financing option for all businesses. As long as it is handled in a professional manner, your clients will understand you are doing what every business does: Putting in place a well thought out working capital facility to insure your business continues to grow and support your customers. Most of your clients are accustomed to dealing with factors, which is a $150 billion annual business in the U.S. alone. Factoring has been around for several centuries. Most business professionals today are aware that factoring is a common financial tool used successfully by companies of all sizes.

Up to 95% of eligible Accounts Receivable

Up to 50% of eligible Inventory

Purchase order financing (or PO Funding) is a short-term commercial finance option that provides capital to pay suppliers upfront so your company doesn’t have to deplete cash reserves. Here is a representative scenario:

A business has a solid purchase order ready to fulfill, but not the funds to pay its suppliers upfront; nor is the bank willing to extend the amount of credit that would be required. Using a purchase order finance company, the suppliers are paid directly usually via a letter of credit. The business fulfills the order; with proceeds arriving after shipment is received.

Rates are based on individual and specific circumstances. Factoring rates depend on the credit worthiness of your customers, your average invoice size, average payment cycle, factoring volume, and other elements.

Most Factors can factor your business if you have $10,000 or more in outstanding accounts receivable from credit worthy customers. Some clients can begin factoring with their first sale; others were well-established businesses.