Confirming Your Monthly Cash Flows and if Any Loans Exist
Table of contents
- Confirming Your Monthly Cash Flows and if Any Loans Exist
- Factoring Invoices is Thousands of Years Old
- How Does Factoring Work?
- What are factoring companies?
- How do factoring companies make money?
- Why do factor companies need your bank statements?
- Why do you need to send copies of your bank statements to a factoring receivables company?
- How do factoring companies collect payment from the account debtor?
- How fast does a factor pay you for the invoices you send them to fund and collect?
Factoring Invoices is Thousands of Years Old
Factoring companies are one of the oldest forms of financing in history. They buy invoices from businesses and extend cash for you to raise money. Cash flow struggles hurt 93% of companies. If your business needs commercial funding, having clean banking records makes the process fast and easy.
The main benefit for small business owners with bank statements is obtaining working capital in times of rising interest rates and bank uncertainty. It can be challenging to trust the banking system with recent collapses. At Bankers Factoring, we protect your funding source with our exclusive bad debt protection program.
Contract Bankers Factoring, a trusted factoring receivables company, to sell unpaid customer invoices and protect your future cash flow.
How Does Factoring Work?
Businesses with unpaid accounts receivable (A/R) can qualify for invoice funding by completing an online application. Bankers Factoring only conducts a soft credit pull when approving your financing plan, unlike traditional lenders who run hard credit reports, which can negatively impact your credit score.
Factoring companies need your bank statements to verify your business operations. Conducting the background check, evaluating bank statements, and verifying your invoices are part of the factoring due diligence process. Your company can receive funding within days compared to weeks and months at the bank.
By selling your uncollected invoices, your business receives the following benefits:
- Working capital within 3 to 5 days to cover payroll funding, operating expenses, and costs of sales
- Access to flexible funding
- Managing receivables is outsourced to Bankers – saving your staff time each day.
- Bad debt expense coverage through our non-recourse agreement
Learn more in our full article, How Does a Factoring Company Work?
What are factoring companies?
Factoring companies buy your invoices and collect the money from customers. We provide funding by purchasing your invoices at a discount. Buying and selling invoices helps lessen cash flow obstacles. Factoring is a popular funding choice for staffing and trucking companies.
You can read the difference between invoice factoring and an A/R based line of credit.
Selling A/R invoices is a great way to get cash quickly without waiting for customers’ payments or taking out a loan from a traditional bank. Business owners can improve their balance sheet and income statement with positive working capital. Factoring services are Bankers Factoring makes this a reality for your company.
Read the full article, What is an Invoice Factoring Company?
How do factoring companies make money?
We subtract the discount rate from your customer payment. If your company conducts business on credit sales, our small fees allow you to bypass these terms. Fast funding is necessary for business survival. With the cost of factoring, you should be more profitable. You can confirm so with our working capital formula that shows profit and allows you to calculate your working capital needs.
Keep reading about factoring costs on our Factoring Fees and Rates Explained page.
Why do factor companies need your bank statements?
Factoring companies need bank statements to verify your business operations regarding revenue, cash flow cycles, and general financial health. Factors lend to your business because your customers will pay unpaid invoices. Verifying banking activity through bank statements helps identify your business risk. We also verify your business’s legal name and check it against your state filings.
Your credit history, bank statements, and your customer’s creditworthiness are the main drivers in your discount rate. By providing the proper documents, you can overcome negative working capital quickly.
When you provide bank statements to factoring companies, you better your chances of avoiding high-interest rate loans such as merchant cash advances or high-interest small business loans. The information in your credit checks from the credit bureau only provides a piece of your financial picture.
Keep reading our full article, Soft Pull vs. Hard Pull, by a Factoring Company.
Why do you need to send copies of your bank statements to a factoring receivables company?
There are a few reasons why factoring companies need to see your bank statements. First, we need to verify your business activity, revenues, and expenses. This can be done by checking that your income is consistent with the amount of money coming into the business each month.
Secondly, we check that you are not a fraud risk or someone who might just disappear one day without completing the invoice funding transaction (known as “defaulting”).
Thirdly, we want to know if you are a reliable business partner who will fulfill your financial obligations. We fund large invoice amounts and want to grow with our clients.
You can also read what is a UCC filing in invoice factoring.
Your factoring line is unlike a credit limit. We verify your banking records so you can access flexible cash flow as your business grows.
Learn more about the funding qualification in our article, The Due Diligence Process in Invoice Factoring.
How do factoring companies collect payment from the account debtor?
The debtor is your customer responsible for repaying open receivables. We work with your accounting team to set up your account and take over the collections process. Clients at Bankers Factoring receive access to a 24/7 online portal to see your receivable reports. The factor tracks payments, discounts, and other fees in your factoring agreement.
We have received payments on behalf of our customers for decades. Our professional team acts as your team’s extension to ensure strong customer relations. With our non-recourse factoring, doubtful accounts become a thing of the past.
Keep reading our full article, How Factor Financing Impacts Customer Relations.
How fast does a factor pay you for the invoices you send them to fund and collect?
Bankers Factoring pays you the same day we buy your unpaid A/R. Once your factoring agreement is in place, you can access funding within 24 hours. We are committing to business owners and giving them positive net working capital. We can also help if the banks turned you down for a line of credit.
Cash payments are sent electronically directly to your business checking account. We ensure your payments are secure for you and your customers’ payments.
Learn more about our Same Day A/R Factor Financing.