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factoring 101

An easy to understand overview of what factoring is and how it differs from a bank loan.

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factoring 101

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  1. Portia Ramassar Paragon Financial Group Factoring 101

  2. Factoring is the sale of your accounts receivable (invoices) to a funding source at a discount off the face value in return for immediate cash. The funding source is known as a Factor. What is Factoring?

  3. Why Factoring vs a Bank Line • Business Less than Two Years Old • Losing Money • High Client Concentration • Based on YOUR Client’s Credit Worthiness • Balance Sheet Issues • Personal Credit • Bank Line Too Small • Hyper Growth • Defacto Credit Department (Credit Protection)

  4. What Type Business can Factor • Staffing/Labor Providers • Manufacturing • Distributors • Trucking • Government Contractors • Service Providers • International Sales • Healthcare • Construction (Limited) • And many more……

  5. How to Get Started with A Factor • Factor’s Two Page Application • AR Detail • Copies of Contracts • Copies of Invoices • Other Industry Related Documentation

  6. Questions to Ask a Factor • Client (Debtor) Perception • How are My Clients Treated? • Verification Process • Recourse vs Non-Recourse • Advance Rate & Fees • Time Frame-Approval & Funding

  7. Factoring 101 Thank you for your Time! Portia Ramassar Paragon Financial Group

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