Frequently Asked Questions
Is accounts receivable funding a new financing option?
Accounts receivable funding is one of the oldest forms of financing. It has been around in one form or another for more than 4,000 years. Until the mid 1980s, most people thought accounts receivable funding was only used in the textile and garment industries. Today, accounts receivable funding is a widely used and viable financing solution for all types of businesses that extend credit terms to their customers.
How can accounts receivable funding help my business?
By providing an immediate source of cash flow for your company you can use this cash to provide working capital, meet payroll, pay taxes, replenish inventory, increase advertising, purchase equipment, improve your credit rating, and more.
How is accounts receivable funding from AmeriFactors different than accounts receivable financing 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. 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 funding 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 funding?
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 funding 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 application, be sure to include 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 startups, 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 funding?
We look to fund 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 new customers, fax the same information to us, and we will check them out for you.
How long does it take to receive the first funding?
The initial funding takes between 1-3 business days after we receive your signed contract. 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 funding fees tax deductible?
Accounts receivable funding fees are an expense and should be treated as such.
Does AmeriFactors verify invoices with my customers?
Invoice verification is an essential and accepted part of funding. Because factors verify invoices with customers they can tell clients if there is a customer service problem right away. A non-factoring client may not notice the problem until the invoice becomes past due. By that time it may be too late to save the account for the process to run smoothly, we suggest that you call your customers or send them a letter in advance to let them know that you are now working with AmeriFactors. If you need assistance in writing the notification letter, we will be happy to provide you with a sample letter.
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 invoice checks since AmeriFactors is also providing you with accounts receivable management services. 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. We will never harass your customers for money. Maintaining your customers’ goodwill and confidence are of utmost importance to us. In the last year AmeriFactors collected $1 Billion in accounts receivable, we have extensive experience in the management of our customers Accounts Receivable.