Factoring is a financial service where businesses sell their unpaid invoices to a third-party company, known as a factor. This allows businesses to receive immediate cash instead of waiting for customers to pay, improving cash flow and enabling growth.

When you factor your receivables, you sell your unpaid invoices to a factoring company. The factor pays you upfront and then collects the payment from your customers, usually within 30 to 90 days. This process provides immediate cash flow and reduces the burden of managing collections

Factoring offers several advantages, including:

Immediate cash flow to cover expenses like payroll, supplies, and expansion opportunities.

No need to wait 30 to 90 days for customer payments.

Reduction in the risk of bad debt, especially with non-recourse factoring.

Professional management of accounts receivable and collections.

Non-recourse factoring is a type of factoring where the factor assumes the risk of non-payment by your customers. If a customer fails to pay an invoice, the factor absorbs the loss, protecting your business from bad debt.

To qualify for factoring, your business should:

-Operate in a B2B (business-to-business) environment.

-Have creditworthy customers.

-Experience difficulties qualifying for conventional financing.

-Maintain established invoicing practices.

If you meet these criteria, factoring can be a viable solution to improve your cash flow.

Approval times may vary, but at ACS Factors, we strive to provide prompt service. Once approved, you can receive funds as quickly as the same day, ensuring your business maintains a healthy cash flow.

No, factoring is not a loan. It's a financial transaction where you sell your accounts receivable at a discount to a factoring company. This means you receive immediate cash without incurring debt or affecting your credit.

Yes, your customers will be notified that payments should be directed to the factoring company. This is a standard practice in the industry and is handled professionally to maintain your customer relationships.

Factoring differs from a bank loan in several ways:

Approval Process: Factoring has a faster approval process compared to traditional bank loans.

Debt: Factoring is not a loan, so it doesn't add debt to your balance sheet.

Collateral: Factoring relies on the creditworthiness of your customers, not your business's assets or credit history.

These differences make factoring a flexible and accessible financing option for many businesses. 

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For more information or to discuss how our factoring services can benefit your business, please contact us at (909) 325 7989 or email us at [email protected]