What Is Accounts Receivable Funding?

Accounts receivable factoring is the selling of your invoices (accounts receivable) for cash versus waiting 30-60 or 90 days to be paid by your customer. Factoring will get you the working capital you need now and improve you cash flow. As a fee based consultant, American CashFlowCorporation.com will identify funding sources that typically advance 65-80% against the invoice you generate and pay you the balance less their fee (typically 3-6%) when the invoice is paid.

Accounts receivable factoring is a one of the most valuable tools that you can use to generate additional working capital without borrowing from the typical lending institution and improve the cash flow of your business.

Example #1:

Contract staffing agency supplies personnel to the computer services industry. The consultants are paid weekly while the agency client pays in 30-60 days. This uses up valuable cash reserves and limits potential growth. (Turning away new business and on occasion weekly payroll is difficult to cover!)

Contract staffing agency contracts with American CashFlowCorporation.com to coordinate the purchase each invoice they generate with a funding source. Making payroll is no longer an issue and they can now hire more consultants, take on new business to fuel new growth.

Example #2:

Automotive equipment supplier is expanding into new markets and is developing satellite distributors in each major metropolitan market across the country. As the bids for contracts are approved it will be necessary to utilize the current receivables for the nationwide expansion. Their current customers usually take 60-90 days to pay and the automotive equipment supplier is having difficulty ordering more inventory to increase business and their local suppliers are threatening to cut them off and ship all new orders COD.

Automotive equipment supplier retains American CashFlowCorporation.com to help locate a funding source to pay the automotive equipment supplier direct when their clients are invoiced. Upon approval, the automotive equipment supplier has an increased level of cash flow and is now able to negotiate more favorable terms and pricing with their local suppliers. This new pricing more than makes up for cost of factoring and the nationwide expansion proceeds on schedule.

Frequently Asked Questions About Accounts Receivable Funding

How exactly does your program work?

You submit your invoice(s) to us. We verify with your customer that the work has been done to their satisfaction and have them execute an assignment/joint check agreement. Once you are approved, within 24-48 hours we arrange the purchase your invoice(s) with a funding resource and you get 40-70% of the invoice amount less consulting fees any money you owe to your suppliers or anyone with lien rights specific to this job. We can also send a Notice to Owner (if you have not done so), at this same time to protect all lien rights. All Invoices must have lien rights secured for the funding sources to purchase. When the advance is paid in full to the funding source, you get the remaining balance less discount fee. If the advance was paid in 30 days or less the discount fee is 4-6% depending on the percent we advance and the credit risk involved. Beyond 30 days, we use a simple formula to calculate the discount fee. The discount fee is 1-1.5% per week beyond 30 days.

Do I have to send you all my invoices?

No, you don't. Some of our clients prefer to send us all of their business to maximize their cash flow while others only send us a small portion, The choice is totally yours.

How long does it take to get approved?

It usually takes from 5-7 working days from when we receive a completed application, associated documentation with invoices to be funded and contract attached to get you funded the first time. After that, funding should usually take about 24-48 hours for each subsequent invoice advance to be funded. You can speed up the process greatly by making sure the application is properly filled out and complete with all your clients listed and also by contacting your clients to let them know that we will be contacting them for verification.

W hat states do you fund in?

The entire United States. We are constantly seeking funding resources across the country and adding new services so please call us to see if what new services are available in your area.

A discount fee of 4-6% is a lot of money, how can I make money with you charging me these fees?

Remember, the cost of not having money is extremely expensive and if you use the funding that we arrange for you just to get paid earlier and you don't do anything else with it.

Is there any application or due diligence fee that you charge?

There is no application fee however, we do charge a one time due diligence fee of $350-$750 at time of offer sheet is presented or we take it from the first funding depending on the situation. The fee covers costs of UCC searches, UCC filings and credit searches. On subsequent funding you will only be charged the discount fee and a funding fee to cover credit insurance, paying suppliers, credit searches, document preparation, etc.

Is there anyway to reduce the cost of funding?

What you can do to hold the cost down is send us the funding request only when you need the money. For example, if you have a invoice that you have submitted and you know you will get paid in 45 days, but you don't need the money for 2 weeks, submit the invoice to us a few days before you really need the money to hold the cost down to the minimum discount fee of 4-6%.

Will you contact my customers?

YES. We need to verify each invoice with your customer, confirm the dollar amount, confirm that the work has been completed to their satisfaction and have them sign a joint check agreement. You should tell your client in advance that you have secured an unlimited line of working capital (utilizing your accounts receivable as collateral) and they should be expecting our call.

What if my customer takes longer than 30 Days to pay on the advanced invoice will you call and harass them?

NO, As our client it is very important to us that we assist you in maintaining your current customer relationships. We accomplish this simply by selecting only non-recourse funding sources that rely on you to maintain your current business relationships with your clients to help them understand the additional fees that you will incur should they develop a pattern of serious delinquency. Remember that they have been using your money to finance their projects and your customers should understand how important cash flow and financing is to grow a business. THIS STEP IS VERY IMPORTANT.