What Is Factoring
Factoring has been around as long as commerce itself. It is the sale of your accounts receivable to a buyer (or factor), that lets your company access cash beyond its own equity based on the strength of your customer’s credit. Many companies need additional cash flow to support seasonal demands, growth, and more.
Types of Factoring
There are two types of factoring which are frequently used.
- Discount Factoring / Recourse Factoring
- Traditional Factoring / Non Recourse Factoring
Discount Factoring / Recourse Factoring
Discount factoring, also known as recourse factoring, provides your business with flexible and immediate cash on your accounts receivable invoices. You can expect to see up to 90% of the eligible funds from the invoices immediately. Once your customer has paid you will receive the balance. We retain a small administrative fee to cover our expenses for interacting with your client and arranging payment details. This product gives you the opportunity to grow, restructure, take advantage of supplier discounts through volume purchases or early payments, or even to fund payroll.
Traditional Factoring / Non Recourse Factoring
Traditional factoring, also known as non-recourse factoring is available for both domestic and international situations, and provides your business with outsourced credit and collection services as well as optional funding. Prior to shipping an order or providing services to a customer you can contact our credit department to determine if the customer is credit approved. Empire may make advances up to 90% of the invoice amount within 24 hours. The invoices that are credit approved will be paid to you at maturity even if the customer has financial inability to pay as Empire has assumed the credit risk of the approved invoices.