Non-Recourse Invoice Factoring versus Purchase Order Funding
By the number of calls we receive at BusinessCash.com, there is much confusion about Non-Recourse Invoice Factoring versus Purchase Order Funding. In this article, we will walk you through the steps of how each one them works. We will also tackle which type of companies each financing option applies. What is Non-Recourse Invoice Factoring? Non-Recourse Invoice Factoring is a financial agreement between your business and a factoring company for financing based on accounts receivables against cash. It is available to any company that bills...
read moreNotice of Assignment: A Step in the Factoring Process
In understanding the notice of assignment’s (NOA) both concept and procedure, it is crucial first to understand what does invoice factoring mean. As well as how does it work. Invoice factoring also referred to as Accounts Receivable (AR) factoring. This is a type of debtor finance that grants you funding based on your invoices. It is a financial transaction between a factoring company and your business inducing that you agree to sell your AR to your factor at a discount. After setting an agreement, your factoring company will provide you...
read moreSingle Client AR Factoring: Your solution to cash flow problems
The primary challenge of running any business is to keep a consistent cash flow running. Some businesses are more vulnerable than others to cash flows problems. It’s a common dilemma for small and mid-sized companies as they usually find themselves lacking enough working capital to fill a second large order when they have already fulfilled the first one and awaiting payment. Even more problematic is companies that rely on one or two large clients for their revenues have limitations in their cash flow solutions. Often, they struggle to...
read moreWhat are the Average Factoring Rates?
Factoring companies will look at all of the above criteria to help determine their rate. A higher volume of invoices in a service-oriented business with shorter terms will typically get the best rates. You could find yourself paying 4% or less for the entire transaction. If the payment terms of the invoices have already gone beyond 30 days, you may pay up to 7%. Determination will depend on the customer’s industry and credit history. Experienced factor lenders know that certain business types; such as large cable companies, regularly take...
read moreWhat is Non-Recourse Invoice Factoring?
Non-Recourse Factoring or Factoring without Recourse is an agreement within a factoring contract where the factor’s client does not have to pay back the factoring company if an invoice is not specifically paid due to the bankruptcy of the client’s customer (the Account Debtor) under an invoice with credit protection in place. Factoring companies offer credit protection as part of a non-recourse program. What is Non-Recourse Factoring? How Non-Recourse A/R Factoring Works-PDF What are the Benefits of Non-Recourse Invoice...
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