Factoring
- The sale of your invoices for
immediate cash
- The process works like this: once
approved, you send in your invoices. They
are reviewed and you are wired an advance
within 24 hours. When the invoices are
paid, you receive the balance.
- Reserves are disbursed weekly as
invoices are paid.
- Fees vary by case but are typically
amount to only a small discount from the
receivables purchased.
- Transaction sizes up to $20,000,000
You stay informed and involved
- Daily and monthly collection
activities are preformed
- You receive daily, weekly and monthly
reports about aging and collection
activity.
- Free customer credit reports from to
alert you to customers who are in trouble.
- We’re committed to maintaining your
valuable client relationships.
The impact on profits due to factoring is
readily seen by comparing the bottom lines
before and after factoring as depicted by
this classical example:
Impact of factoring on profits
| |
Before Factoring |
After Factoring |
| Revenues |
$100,000 |
$200,000 |
| Cost of Goods/Services Sold |
$65,000 (65%) |
$130,000 (65%) |
| Gross Profit |
$35,000 (35%) ) |
$30,000 (35%) |
| Variable Cost |
$10,000 (10%) |
$20,000 |
| Fixed Costs |
$20,000 |
$20,000 |
| Cost of Factoring |
N/A |
$5,000 |
| Net Profit |
$5,000 (5%) |
$5,000 |
The profit after factoring increased both
dollar-wise (from $5,000 to $25,000) and
percentage-wise (from 5% to 12.5%). Thus by
investing $5,000 in factoring, the net
profit increased by $20,000 making the
return on investment (R.O.I.) in factoring
to be: R.O.I. = (20,000/5,000) x 100% = 400%
Please
contact our sales team to discuss how we
can help your bottom line! |
