Invoice Factoring

Our clients experience many roadblocks when while on projects. They want to plan for expected and unexpected financial needs. In some cases.

Our client’s business invoices their clients for services of products that they have utilized with payment terms of 30, 60, 90 days.

The client has 90 days to pay for the services.

Meanwhile added expenses accumulate for our clients, and they do not want to wait for 90days to receive the full invoice.

Invoice funding is and advances on the invoice amount that can pay for payroll, equipment, and daily expenses for the business.

To Invoice fund our clients must have:

  • Current contracts that are being serviced
  • Contact information for their clients
  • Have a current contract
  • Be able to transfer funds to a business checking account

Long story short:

Our client is agreeing /selling their administrative duties (accounts receivable, and accounts payable) to the SB link. Once the contracts, services provided, and invoices are verified our clients can be advance a percentage of their invoice with a 24-72 hour period.

Process

Submit an application, and sell the invoice.

Clients need to be approved. They will accept a company that has been in business for at least 2 years and doesn’t have any serious legal or tax problems. If approved, you will sign an agreement with the factor to establish the initial borrowed amount. The factor will determine the advance based on the size of the transaction, your industry, and other risk parameters.

Step 1 Submit an application
Step 2:  The link at several factors to see if you quality such as personal and business information, accounts receivable aging report, accounts payable aging report, tax returns, and corporate paperwork.
Step 3: The factor advances a percentage of the invoice.

Next, the factor will advance a percentage of the factored invoice, generally around 80%. The factor may also send a “notice of assignment” to the client who will pay the invoice.

Step 4: The invoice is due

Once the invoice is due, the client will pay the SB Link rather than paying our clients directly.

Step 5: The factor transfers the remaining 20% of the invoice to your business, minus, and fees.

After the client has paid the factor, the factor will send the rest of the remaining invoice amount, known as the remitted amount. They will subtract any fees, sometimes as low as 0.5% of the total invoice, depending on the accumulation time.

Benefits of Invoice Factoring

To get quick cash:  Invoice factoring provides an easy and immediate cash source to cover expenses. Other financing options can take as long as 30, 60, 90 days, or more to complete.

Avoids more debt: 

Less of a credit risk: Invoice factoring has less of a credit risk than other business financing options. It relies on the creditworthiness of the customer, not your own business. Even businesses that don’t have the best credit can still qualify.

Conclusion

Invoice factoring helps businesses secure money quickly by selling unpaid customer invoices to cover expenses. As long as the customer pays the invoice on time, factoring represents a more affordable short term financing option than other alternatives.