Is accounts receivable financing a bank loan?
No - your business-to-business invoices are assets and AmeriFactors can purchase them for a very low fee that's easily absorbed into your overhead. So you avoid going into debt while maintaining constant cash flow.
Is accounts receivable financing new?
Accounts receivable financing , also called "FACTORING", is one of the oldest forms of financing in the world. Factoring has been around in one form or another for more than 4,000 years. Until the mid 1980s, most people thought accounts receivable financing was only used in the textile and garment industries. Today, accounts receivable financing is a widely used and viable business solution.
How can factoring accounts receivables help my business?
Factoring accounts receivable provides an immediate source of cash flow for your company. You can use the cash to provide working capital, meet payroll, pay taxes, replenish inventory, increase advertising, purchase equipment, improve your credit rating, and cover any business expense.
How is accounts receivable financing from AmeriFactors different than business loans from a bank?
When making a funding decision, AmeriFactors will focus on the creditworthiness of your customers while banks will focus on your company’s financial history and cash flow for all business loans. Best of all, AmeriFactors will make a quick funding decision, while banks may take weeks or even months-to approve a loan.
Will my company be eligible for accounts receivable financing if it has a bank loan or line of credit?
If a bank has a lien on your company’s accounts receivable, you should let us know right away. We will ask the bank to subordinate that lien in favor of AmeriFactors. This is a common occurrence and most banks will accommodate the request, but we must know this information in advance.
My company owes back taxes. Can I still apply for accounts receivable financing?
Yes, tax problems are handled on a case-by-case basis. Please let us know immediately so that we can discuss the payoff of your back taxes or a lien subordination with the IRS.
I have had a past bankruptcy, is accounts receivable financing still an option?
Yes, AmeriFactors will still consider your application even If you have credit problems or a past bankruptcy.
What information will AmeriFactors need from my company to begin the accounts receivable funding process?
Along with the final application, AmeriFactors will require your company’s most recent accounts receivable and accounts payable aging reports, Articles of Incorporation or DBA filing, a master customer list, copy of your ID (i.e. driving license or passport) and a sample invoice with sample supporting documentation (i.e. Proof of Delivery, Order, Contract etc.). For start-ups, please also submit a business plan and projected sales forecast, and an owner/officer history and profile.
Which customers would be good candidates for accounts receivable financing?
We look to factor all of your customers. First, we need their names, addresses, phone numbers and the amounts of credit desired. This will save you time when submitting invoices to us. Also, anytime you obtain a new customer just complete our convenient on-line "credit check" form and we'll make a credit determination right away. But know that all credit checks are "soft" and in no way have a negative impact on your customers.
How long does it take to receive the first invoice funding?
The initial funding takes between 1-3 business days after receipt of our signed agreement. If you wish, you can send your invoices to be funded with the signed contract after the initial funding your company can receive funds usually within 24 hours after verification.
Does AmeriFactors purchase outstanding invoices?
Yes. For the first funding only we can purchase your invoices from your outstanding accounts receivable subject to verification.
Are accounts receivable financing fees tax deductible?
Accounts receivable financing fees are an expense and should be treated as such.
Does AmeriFactors verify invoices with my customers?
YES - Invoice verification is an essential and accepted part of accounts receivable financing. Because we verify invoices with your customers they can tell us if there's a customer service or product quality problem right away. Without verification you may not notice the problem until the invoice becomes past due. By that time it may be too late to receive payment in a timely manner. At AmeriFactors we suggest that you notify your customers in advance that you're working with us. If you need assistance in writing the notification letter we'll be happy to provide a sample.
What should I do if my customer mistakenly sends the payment to my company?
This might happen, especially with the first invoice. If this occurs, the check must be sent to AmeriFactors immediately. Your company should never deposit checks from factored invoices because AmeriFactors is now the owner of that asset/invoice. We also ask that you notify your customer to pay us directly in the future.
How can I be certain that AmeriFactors will treat my customers well?
The last thing we want is for you to lose a customer. AmeriFactors is not a collection agency and will never harass your customers for money. Maintaining your customers’ goodwill and confidence are of the utmost importance. In the last year AmeriFactors collected $1 Billion in accounts receivable and has extensive experience in the management of our clients accounts receivable.
