Accounts Receivables factoring had long been used by companies which were experiencing problems with cash flow and approaching insolvency. However, in today's economic environment it is simply another strataegy for managing cash in difficult times, and in some industries it is standard operating procedure.
Essentially what takes place is that the Company sells their Accounts Receivable to an investor and the investor assumes the responsibility of collection and the risk of non-collection. The Company receives it payments immediately after the sale of the product is made or the delivery of the services completed, and the Investor waits the 30 or 60 days until payment is received and charges a fee for these services.
In seeking to factor accounts receivable a Company should have
> A track record in the industry with a good reputation in its products or services and few returns or disputes
> Creditworthy clients.
We work directly with companies and also with their intermediaries or advisors.
