Accounts Receivable and/or Purchase Order Factoring can put money into your pocket today. Why wait 30-90 days!
How We Can Help
Peartree has aligned itself with several of the largest, most reputable factoring companies in the marketplace. Each of these companies have different underwriting guidelines and policies as well as having “preferred industries” in which they are more aggressive. As a brokerage, we can take your file to the company that would be a “best fit” for your businesses model and situation.
What is Factoring
This is a transaction in which a business sells its accounts receivable invoices or purchase orders, to a third party commercial financing company, also known as a “factor.” This is done so that the business can receive cash immediately and not have to wait 30, 60 or 90 days + for a customer payment or the purchase order to be fulfilled.
How does it work
The terms and nature of accounts receivable/purchase order factoring can differ among various industries and financial services providers. Most factoring companies will purchase your invoices or purchase orders and advance you money within 24 hours. The amount of the advance can range from 80% to as much as 95% depending on the industry, your customers’ credit histories and other criteria. Then, once the payment by the customer is made, the balance (less a small fee) is paid to you. The company also provides you back-office support. Once it collects from your customers, the company pays you the reserve balances of the invoices, minus a fee for assuming the collection risk. The benefit of accounts receivable and purchase order factoring is that, instead of waiting for a customer payment, you now have that cash in hand to operate and grow your business. This is not a loan and no debt is assumed by factoring. The funds are unrestricted, providing a company more flexibility than with a traditional bank loan.
Accounts Receivable Factoring in Five Simple Steps
- You perform a service for your customer.
- You send your invoice to the company.
- You receive a cash advance on your invoice from the company.
- The factoring company collects full payment from your customer.
- The factoring company pays you the rest of your invoice amount, minus a fee.
How Can I find out If My Business Qualifies
Simply fill-out the “Free Consultation” form to the right and one of our Business Financing Specialists will get back to you within 24 hours.