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Factoring may be the answer for your business. In its simplest form FACTORING is the sale of a company's account receivables (invoices) at an amount less than (a discount of) the face value. (Ex: If the factoring discount is 3%, which is the average fee, the invoice is being purchased for $.97 cents on the dollar). This allows a company to convert their dormant assets into usable cash flow. This is NOT a loan.

Here's how this much overlooked cash flow enhancement method works…Company ABC sells products to Company XYZ for $10,000.00. XYZ accepts delivery of the product and is then invoiced by ABC. ABC now waits for XYZ to pay the invoice, in most cases, for 30-60 days. ABC Company is now being held financially captive until that invoice is paid.

ABC Company can turn to a funding organization that specializes in Factoring. The funding process is completely different than a bank's funding process. The bank approves or declines ABC Company's loan based on ITS own financial condition. A funding source specializing in Factoring is concerned with ABC Company's customer's financial condition, not its own.

The Factoring funding specialists purchases the Invoice ABC sent to XYZ and within 24-48 hours provides up to 80% of the face value of the invoice ($8,000.00) to ABC Company. This enables ABC to have the cash NOW rather than waiting until XYZ decides to pay the invoice. ABC now has the funds available for its most important needs purchase the materials to fill the new order and take on a new customer, make payroll, operations expenses, taxes, or any other reason that they may wish to use the funds. Once the invoice is paid by XYX in full, the Factoring funding specialists will rebate the balance to ABC Company less the factoring fee (in this case is $300.00).

Overall, businesses which utilize Accounts Receivable funding or Factoring as a business strategy find it is the easiest, fastest, and least expensive way for a business to raise working capital and improve cash flow.

Sage Hill Enterprises offers special Minority Business Development Funding Programs. Email: sage.hill@sbcglobal.net