Factoring Companies Provide Essential Financial Services
Factoring is a type of transaction whereby commercial businesses agree to sell their current (not overdue) invoices, or accounts receivable, for amounts that are less than the totals owed to the businesses. In these kinds of deals, factoring companies such as US Funding pay cash for the discounted amounts, which provides an immediate infusion of money that the commercial businesses can use for any purpose. Then, the factoring companies, or factors, collect payment of the invoices as they become due.
It is important to note that factoring is not the act of using a business’s accounts receivable as collateral for a loan that must be repaid; factors are not banks. A factoring type of transaction, in actuality, encompasses the permanent sale of the approved invoices for an agreed-upon price, which transfers ownership of the invoices from the original business. Factors make a profit when the money they receive from the payment of invoices as they become due is more than the price they paid to buy those invoices.
Advantages of Working With Factoring Companies
It is not unusual for factoring companies to provide four key services for their clients.
- Credit information about prospective customers
- Payment history of current customers
- Daily collection reports
- Actual collection calls
By outsourcing these services, smaller businesses can make smarter decisions about extending credit to customers and protect themselves better from financial crises.
At US Funding, we specialize in three industries: staffing and temporary personnel agencies, manufacturing and fabrication companies and business service providers.
- We understand that temporary employees must be paid on a weekly or bi-weekly schedule which puts a strain of cash flow to meet payroll.
- Manufacturing companies must continue to operate leaner with improved equipment in order to stay competitive.
- Service providers are susceptible to governmental regulation changes or the demands of a large client or unexpected competition.
Your needs can change suddenly, and we are more flexible and can respond to you more quickly than a bank.
In addition to that, for temporary staffing and personnel firms, US Funding also provides accounts receivable services, eliminating the expense of maintaining in-house accounting staff. Our experts will provide services that can include determination of payroll and tax requirements, printing and distributing of paychecks, compiling reports, filing taxes, issuing W-2 forms, managing 401(k) deductions and tracking employee benefits.
About US Funding
We are based in High Point, NC and have been successfully meeting our clients’ needs since 1999. We offer only the highest-qualified brokers who are dedicated to giving our clients excellent service at reasonable rates for invoice factoring and cash flow management. Our around-the-clock online access gives you access to your records at any time. With our proven methodologies and strong financial backing, we are able to meet your changing requirements with solutions that are customized for your needs.