Invoice Factoring FAQ

About Factoring

Invoice factoring is a tool that businesses use to convert accounts receivable into immediate working capital, without diluting equity or incurring new debt. Essentially, factoring is the sale of  your company’s accounts receivable (invoices) at a slight discount in return for immediate cash.

About Qualifying For Factoring

Simply CLICK HERE to answer a few short questions, or call our underwriting department today at 201-842-7725.

Most CapFlow clients are manufacturers, distributors, service providers, consultants or contract employees with annual revenues ranging from $250,000 to $25 million and five to fifty clients. These clients can range from large, national companies to small local businesses. Keep in mind that exceptions are always worth exploring.

CapFlow Funding provides factoring services to small and medium-sized businesses nationwide. While virtually any business can use factoring, you are an ideal candidate if your business fits one of these typical profiles:

  • You are a start-up or have a relatively short operating history
  • You are experiencing or anticipating rapid growth
  • You have been negatively impacted by the economy or industry events
  • You have a long sales cycle, requiring upfront capital to pay employees and vendors while waiting to be paid on terms up to ninety days

 

About The Factoring Process

Once you become a CapFlow client, all you have to do is send us a schedule of the invoices you wish to finance.  We’ll verify the invoices and pay you 75% – 90% of the invoice face amount within 24 hours, wiring you capital directly to your business bank account.

When CapFlow purchases an invoice, we ensure that payment is made directly to our lockbox.  Once we receive payment from your customer, we forward the balance to you, less a small fee.

CapFlow has alternative financing programs such as Merchant Cash Advance and bridge loans.

There are three ways a customer will know to pay us for a particular invoice:

  • Notice of Assignment – We will assist you in providing a letter to your customers explaining that you have entered into a new liquidity facility that will enable you to grow and meet your increasing demand. That letter will mention our financing relationship.
  • Verification – With certain invoices, CapFlow may contact your customer to confirm that he or she has received the invoice and understands that payment should be made directly to us.
  • Information on the invoice – The “Remit To:” section will show our name and lockbox mailing details.

Simply CLICK HERE and answer a few short questions and we will be in touch with you in the next 1-2 business days.

The Benefits of Factoring

Your business will be able to:

  • Access working capital immediately without layering on expensive and dilutive equity or without the need to repay principal and interest on a loan.
  • Have CapFlow collect your receivables on your behalf, thereby freeing up your staff and resources to increase sales and grow your business.
  • Take advantage of supplier discounts offered for rapid payment.
  • Work with a partner such as CapFlow who has access to credit and fraud databases that can assist in vetting new customers and establishing customer credit.

From the start, factoring facilities are easier to establish than bank loans. Because factoring is based only on your accounts receivable, it is faster, simpler and easier to qualify. Because CapFlow is purchasing your receivables, we are more concerned with your customers’ ability to pay than we are with your  credit profile. Plus, CapFlow makes every funding decision locally, without large credit committees and with an eye toward flexibility. If there is a workable way to get you a working capital advance, we will find it. Most importantly, because there is no loan associated with a factoring transaction, there is also no cumbersome paperwork, no ongoing reporting, and no future obligation to repay principal and interest.

Absolutely! One of the biggest benefits of invoice factoring with CapFlow is that we can help you evenly match your cash inflows and outflows. Slow-paying customers can cause a working capital mismatch, especially when your suppliers need to be paid quickly. With immediate advances from CapFlow, you can pay your suppliers or meet payroll without having to wait for your customers to pay you.

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