What is Factoring
Factoring is the selling of invoices, or accounts receivable to a factoring company for immediate cash.
The factoring company acts as an outsourced credit department, handling the collection and processing payment on the invoices. This service helps small businesses because they don’t have to spend time managing payments, making collection calls, and figuring out which invoices have been paid and which are still outstanding.
Advantages of Factoring
- Accept sizable orders with confidence
- Increase capacity to take on bigger, but slower-paying customers
- Synchronize revenue/expense cycles
- Expand and diversify your customer base
- Pay suppliers on time
- Prospect for new business with our credit research service
- Gain access to our extensive reports
Proven Factoring Results You’ll Like…
- Boost profitability
- Improve the quality of your customers and raise sales volume
- Avoid financial roller coaster rides and reduce stress
- End your dependence on one critical customer and minimize the impact of the 800-pound gorilla
- Enhance your company’s reputation and take advantage of every possible trade discount
- Stay informed and reduce bad-debt risk
- Manage your receivables much more efficiently
Compare Factoring Costs
*This chart shows how you can take advantage of New Century Financial’s plan of delayed and
partial funding to lower your cost of capital from 3% to just 1.13% – saving 1.87% to your bottom line.
|Competitors||Fund On||Payment Received On||Initial Cost Cost as % of Invoice|
|Date||16 June||June 30||July 15||
Competitors typically pile on other fees, adding
significantly to the initial cost.
|$ 10,000 Invoice*||$ 10,000||$ —|
|Number of Days Outstanding||30 Days||—||
|Cost||$ 30,000||$ —|
|New Century Financial||Fund On||Payment Received On||Initial Cost Cost as % of Invoice|
|Date||16 June||June 30||July 15||No hidden fees and no extra charges mean your initial cost is the total cost.|
|$ 10,000 Invoice*||$ 2,500||$ 2,500|
|Number of Days Outstanding||30 Days||15 days||
|Cost||$ 75.00||$ 37.50|
* The New Century Financial example reflects partial funding of $5,000, which is all the company needed. The two $2,500 amounts correspond to the delayed funding the company
requested. Partial or delayed funding the company requested. Partial or delayed funding is NOT offered by most factoring firms.
Make Sure You Never Get Tied Up by Factoring Fees
Many factoring companies abuse their customers. Once you’re signed up, you’re tied up – forever. It’s almost impossible to escape. Just look below at some of the painful “gotcha” fees most other factoring companies routinely charge, fees that can sink a growing company. To protect yourself, demand to know ALL the fees you could be charged up front.
Better yet, pick up the phone and call (800)805-8380 or choose between 5 different ways to apply.
|Hidden Fees And Extra Charges||New Century Financial||Typical Competitor|
|Due Diligence Fee||No||Yes|
|Collateral Management Fee||No||Yes|
|ACH Transfer Fee||No||Yes|
|Missing-payment Notation Fee||No||Yes|
|New Customer Fee Or Chargeback Fee||No||Yes|
|Minimum Reserve Balance Fee||No||Yes|
|Check-Clearing or Float Fees||No||Yes|
|Invoice Copy Fee||No||Yes|
|Field Review/Audit Fee||No||Yes|
|Liquidation Administration Fee||No||Yes|
|Lien Termination Fee||No||Yes|
|Automatic Renewal Fee||No||Yes|
|Any Other Fee||No||Yes|