How Factoring Works

image1All businesses experience ups and downs in their business cycles. In a down cycle, they may experience a crisis in their cash flow. By
factoring their invoices through a company such as US Funding, they are utilizing a strategy that will show no debt on their balance sheets as would happen with a bank loan, and they are finding a quick
solution to their need to increase their inventories, meet payroll demands, or grow their businesses to maintain a competitive place in the business world.

When you sell your accounts receivables to US Funding, you can immediately receive up to 85% on approved receivables. Instead
of checking the credit rating of your business, we will be focusing on the credit of your customers.

Once you engage our factoring services, we send your customers a letter letting them know that we are handling your billing and that future payments should be sent to us. If your accounts
receivable is valued at, for example, $100,000, we send you up to $85,000 now. When your customers pay their invoices in 30, 60, or 90 days, we send you the remainder due on the receivables ($100,000 – $85,000 = $15,000) less our factoring fee.

Accounts Receivable Factoring FAQs