A Breakthrough Factoring
Company
Offering Factoring Programs Tailored
to Make You More Money
Is Factoring For You?
The key to knowing if factoring
is for you is to not
to look only at the bottom-line factoring fee, but also
to
consider how your company may increase it's profits through
factoring.
Here is additional
information on factoring
to help you with your decision.
How are
fees and advance rates determined?
It is based on several factors:
The
creditworthiness of your clients
Your monthly billing volume
Average
invoice size
Average days to payment
Fees can range from 2-5 % of the
invoice's face value.
For example if the invoice's value is $1,000; a fee of
3% equals $30.
What is an
advance?
The
amount of money you receive immediately when we
buy your invoice. The balance
is returned to you when
your customer pays the invoice.
Advances range
from 60-95% of the invoice's face value.
For example if the invoice's value
is $1,000 an advance
rate of 80% equals $800. The balance of $200 less
the
factoring fee is returned to you when your customer pays the
invoice.
Comparing Bank Lending Rates to Factoring?
When
compared to bank lending rates, factoring
initially appears to be very
expensive. Here are five typical
questions/concerns that are raised by
potential factoring clients
- Wow! 3 points per month!
That's 36 percent year!
It is tempting to annualize the numbers, but that is an "apples and oranges" comparison.Banks loan money at an annualized interest rate, 12 percent per year for example. We purchase your receivables at a discount. The products are different and there are other inconsistencies to this inappropriate comparison
The bank provides the money only one time, the day that you receive the loan; we provide money continuously. As an example, consider a bank loan for $100,000 at 12 percent. You receive the $100,000 just one time and then pay $1,000 interest per month interest and you still owe the $100,000. Or the bank could provide you with a line of credit that you use only when you need the money but the bank is charging you for that privilege and if you need to increase your line you need to go through the qualifying process all over again.
When you factor $100,000 each month for a year you have the use of $1.2 million (12 x $100,000) over the year. Unlike a bank loan where you have just $100,000 one time. Assuming a 3 point discount, the fees over the year will be 12 x $3,000 or $36,000, which is still 3 percent of $1.2 million. And at the end of the year you have no debt!
- I'm only making 3% profit,
how can I pay you 3 points?
A company making only 3% net profit can do more business volume as a result of factoring, and the larger volume will result in a higher profit margin because fixed costs do not increase with volume. The added business at a higher marginal profit leads to an increased overall profit margin. As the volume increases, the cost of production decreases, so that profits increase. Fixed costs i.e., rent, electric, insurance, etc., increase very little or not at all with volume. An increase in business will not affect rent. Electric bills may rise slightly. Workers compensation insurance may rise slightly. These costs do not increase as do direct production costs.
Let's graphically do the math assuming you can double your sales
Without Factoring
Monthly Gross Sales $50,000 Cost of Goods Sold $30,000 60% of Gross Sales Monthly Gross Profit $20,000 40% of Gross Sales Fixed Expenses $10,000 Variable Expenses $8,500 17% of Gross sales Factoring Fee N/A Total Expenses $18,500 37% of Gross Sales Monthly Net Profit $1,500 3% of Gross Sales
With Factoring
Monthly Gross Sales $100,000 Cost of Goods Sold $60,000 60% of Gross Sales Monthly Gross Profit $40,000 40% of Gross Sales Fixed Expenses $10,000 Variable Expenses $17,000 17% of Gross Sales Factoring Fee $3,000 3% Fee Total Expenses $30,000 30% of Gross Sales Monthly Net Profit $10,000 10% of Gross Sales
- But I only get 80% of my
money upfront!
Let's assume an advance rate of 80%. Let's also assume that you begin factoring in January. You have factored $100,000, we pay you $80,000 of that money upfront, with the remaining money making up the fee (3%) of $3,000 and the reserve (17%) of $17,000.
Now in February, you once again factor $100,000 and receive $80,000. However. you also receive your January reserve of $17,000(assuming your customer pay in 30 days). So for February, you actually receive 97% of your money, instead of 80%.
In the second month and going forward you are basically receiving 97% of your cash flow.
- But what if my customers
take longer than 30 days to pay?
You have several options, Assume your client takes 60 days to pay you bill your client in the normal fashion and simply allow 30 days to go by prior to factoring that invoice. That way you pay the 30 day fee.
Another way is to factor your faster customers first for the cash you need.
GET YOUR CASH TODAY
Call our factoring specialists at
1-866-593-2195
admin@factormoney.com
On-Line Factoring Request Form
We Can Offer You What Others Can't
Unlike other factoring companies, our
program includes the following features at no additional charge:
• 24 hour funding on approved
invoices
• Highest advance rates in the industry
• Credit analysis on new
and existing customers
• Continuous collection management and follow up on
factored invoices
• Invoice and statement mailing (postage included)
•
Account status inquiries anytime;
24/7 online account access.
• We allow you to electronically submit
Invoices
• Free
credit checking on new customers at no additional cost
Also
• Personalized Service - you have one dedicated person and his or her assistant who handle your account.
You don't have to start over each time you call
with a new person
• We are seasoned professionals with an average of 11 years industry experience per account executive
(Well above the factoring industry norm)
Our flexibility allows you to maintain control:
• You select accounts you prefer to
factor on an invoice by invoice basis.
• You control total factoring costs by
only factoring on an "as needed" basis.
Up
to 97% Advance Rates:
Advance rates are based on overall risk
associated with a particular industry as well as experience and track record. We
hold reserve accounts to accommodate industries which typically experience
dilution and that we would otherwise not be able to service. Advance rates range
from 80% to 97% of the gross invoice amount.
Fee
Structures:
Fees are determined based on your
industry, the credit worthiness of your customers, how quickly your invoices
turn, and monthly factoring volume.
GET YOUR CASH TODAY
Call our factoring specialists at
1-866-593-2195
admin@factormoney.com
On-Line
Factoring Request Form
Are We Crazy?
Use No Other
Factoring Company
Until You Have Seen
Our Sensational Plans, including unique
97% Advance Rates
GET YOUR CASH TODAY
Call our factoring specialists at
1-866-593-2195
Email Us
On-line Factoring Request Form
"Vital Force Factoring has always provided service above and beyond any other company I have dealt with. Our account manager gives us 100% and this is only ONE of the reasons we have chosen to stay with them."
-L.P., Vice President security services company
Why Factoring is Necessary
"A sale is not a sale until
you collect the money"
Are you a part -time banker
for your customers?
Take a look at your accounts receivable aging....
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Is Factoring For You?
The key to knowing if factoring is for you
is to not to look only at the bottom-line factoring fee, but also
to consider how your company may increase it's profits through
factoring.
Factoring Benefits
Receive money in as few
days as two to four days.
Maintain complete control
of your business.
Remove or lessen the business costs
associated with the collection process.
Please click here to continue