| What
is Factoring? |
|
In its simplest terms,
factoring is the purchase
of commercial accounts
receivable. The factor
buys invoices in exchange
for immediate cash, and
then holds the invoices
for collection when due.
Factoring takes the guesswork
out of predicting cash
flow for a business. As
soon as goods are shipped
or services are provided,
the client receives cash
on demand to plow back
into his business activities.
>>
Top
|
| How
Does Factoring Work? |
| |
It's
easy. As soon as a client
completes a service or ships
merchandise, the client
forwards his invoices to
us for funding. We advance
up to 85% (minus our fee)
of the face value of the
invoice by direct deposit
or wire transfer to the
client's bank. As invoices
are collected, we remit
the reserve to the client.
>>
Top
|
| Factoring
Has a Reputation for Being
an Expensive Alternative
to Other Kinds of Financing
Vehicles. Is This True? |
| |
No,
not in terms of cost compared
to benefit. The cost of
not factoring may actually
be greater if it causes
a company to limit its
growth. Faster growth
means bigger profits.
Factoring gives a company
immediate working capital
to take advantage of opportunities
in the marketplace. The
actual cost of factoring
is much less than other
methods, such as sale
of stock or utilizing
venture capital. With
factoring, business owners
do not give up their equity
stake and thus sacrifice
autonomy, future dividends,
or capital gains. Factoring
may also enable a company
to qualify for lower interest
rate financing on its
other assets. With factoring,
a company does not increase
the debt on its balance
sheet. This makes them
more attractive to banks
and other lenders. >>
Top
|
| At
Accord Financial, Factoring
Involves More Than Just
Making a Loan. What Value-Added
Services are included at
no extra charge?
|
| |
We help companies set
reasonable credit limits
for their customers. Accord
processes, mails and collects
your invoices. We post
the cash and give you
accurate accounting records.
The reliability and dependability
of our administrative
services will take a load
off your shoulders and
allow your management
team to concentrate on
growing your business
profitably.>>
Top
|
| What
Are The Real Costs Associated
With Factoring? |
| |
The
cost of factoring is the
fee incurred by the client
upon "funding"
the invoice. Many clients
build this in to the selling
price of their product
or service. The fee varies
according to the individual
company's funding needs,
the number of invoices
outstanding, the financial
strength of the company's
customer base, and the
"age" of the
receivables. Other incidental
costs may include pass
through of postage and
long distance telephone
expense, as well as lien
searches on a periodic
basis. >>
Top
|
| What
Kinds of Companies Benefit
the Most from Factoring?
|
| |
Virtually
any company can benefit.
In over 25 years of experience,
we've seen that factoring
is ideal for high growth
companies adding sales
at a faster rate than
they can fund through
their own profits. We've
worked with start-up companies,
undercapitalized companies,
companies in a turnaround
mode and even those with
a negative net worth or
tax liens. We have clients
who prefer the flexibility
of factoring over having
limits and loan covenants
imposed by a bank.
>>
Top
|
| Specifically,
How Do You Help Companies
in Turnaround Situations?
|
| |
When
a business suffers losses,
it may lose the ability
to make payments. Accounts
payable may be stretched
out. Bank loan covenants
may be broken. Traditional
lenders may withdraw their
support. Factoring brings
additional funds to rescue
a company in turnaround
and gives the company
time to implement new
strategies for restoring
profits. Factoring provides
a cash flow "breather"
when the company needs
it most. >>
Top
|
| Why
Does Factoring Make Sense
in This Economy? |
| |
Factoring
makes sense in any economy.
Factoring can work for
almost any company, so
long as its invoices meet
our quality standards.
>>
Top
|
| So,
Factoring is a Form of Interim
Financing? |
| |
It
can be. It can also be
permanent. Our services
often help companies outgrow
the need to factor. However,
factoring can also be
permanently useful for
a continually growing
company, or for a business
owner who doesn't want
to leave a lot of money
in the company. >>
Top
|
| How
Personalized Are Your Client
Services?
|
| |
Very
personalized. We have
a whole group of people
completely devoted to
establishing great relationships
with new clients. We continue
to work closely with all
of our clients on an ongoing
basis. Their needs may
change over time. We adapt
our documentation and
verification requirements
to the way our clients
like to do business. We
emphasize customer service
and individual attention.
It's part of our culture
here at Accord. We aren't
a huge bureaucracy with
a lot of lawyers. We pride
ourselves on good communication
and quick decision making.
>>
Top
|
| Your
Track Record and Reputation
for Stability is an Advantage
in This Marketplace, Isn't
It? |
| |
Yes,
it is. There is a distinct
advantage to doing business
with Accord. As a wholly-owned
subsidiary of a publicly
traded financial institution
(Accord Financial Corporation),
Accord has access to many
capital sources that other
factors don't. We also
have substantial backup
lines of credit with our
Banks. A factor's ability
to fund invoices without
interruption can be a
big issue to potential
clients. We've seen situations
at other factors where
a client's funding was
delayed by days or weeks
because the factor didn't
have enough cash. If a
client expresses concern
about this to Accord,
we reassure them of our
liquidity by sharing our
financial data, which
is published in our parent
company's Annual and Quarterly
Reports. >>
Top
|
| How
Fast Can a Decision Be Made? |
| |
Very
fast. If the prospect gives
us all the paperwork and
information we need, the
decision can be made very
quickly---often within 24
hours. >>
Top
|
