| America's #1 Factoring Company | Client Login |
| America's #1 Factoring Company | Client Login |
In today's economy 30 to 90-day pay terms are standard. These long pay terms can create "Cash Flow Stress" to growing companies.
Our specially designed Factoring Lines can ease your stress by allowing you to access the capital that is tied up in your accounts receivables. What’s more, Set up is as easy as 1-2-3.
History of Invoice Factoring
Factoring's origins lie in the financing of trade, particularly international trade. Factoring Companies were in fact a part of business life in England prior to 1400, and then came to America with the Pilgrims, around 1620. Invoice Factoring appears to be closely related to early merchant banking activities. The latter however evolved by extension to non-trade related financing such as sovereign debt. Like all financial instruments, Account Receivable Factoring evolved over centuries. This was driven by changes in the organization of companies; technology, particularly air travel and non-face to face communications technologies starting with the telegraph, followed by the telephone and then computers. These also drove and were driven by modifications of the common law framework in England and the United States.
Originally Factoring Companies took physical possession of the goods, provided cash advances to the producer, financed the credit extended to the buyer and insured the credit strength of the buyer. By the twentieth century in the United States, the use of a Factoring Company was still the predominant form of financing working capital for the then high growth rate textile industry. In part, this occurred because of the structure of the US banking system with its myriad of small banks and consequent limitations on the amount that could be advanced prudently by any one of them to a firm.
Today Accounts Receivable Factoring Companies are still dealt with the task of advancing funds to smaller to mid sized rapidly growing firms who sell to larger more creditworthy organizations. While almost never taking possession of the goods sold, Factoring Companies offer various combinations of money and supportive services when advancing funds.
Why use a Factoring Company?
Factoring Accounts Receivables is a method used by some firms to obtain cash. Certain companies factor accounts when the available cash balance held by the firm is insufficient to meet current obligations and accommodate its other cash needs, such as new orders or contracts. In other industries, however, such as textiles, Oil & Gas and Trucking, for example, financially sound companies factor their accounts simply because this is the historic method of finance. The use of a Factoring Company to obtain the cash needed to accommodate a firms immediate cash needs will allow the firm to maintain a smaller ongoing cash balance. By reducing the size of its cash balances, more money is made available for investment in the firms growth. Accounts Receivable Factoring is also used as a financial instrument to provide better cash flow control especially if a company currently has a lot of accounts receivables with different credit terms to manage. A company sells its invoices at a discount to their face value when it calculates that it will be better off using the proceeds to bolster its own growth than it would be by effectively functioning as its "customer's bank". Accordingly, Invoice Factoring occurs when the rate of return on the proceeds invested in production exceed the costs associated with Factoring the receivables.
TCI Business Capital is the leading source of Factoring services for companies in many different industries. TCI Business Capital provides Invoice Factoring and Accounts Receivable Factoring solutions for small to mid-size companies in many different industries.
What is Accounts Receivable Factoring? Accounts Receivable Factoring is a transaction where a company sells (Factors) its Accounts Receivables, or invoices, to an Factoring Company in order to improve cash flow. With Invoice Factoring, the company will have immediate cash available for payables, payroll, maintenance, or improving equipment. Accounts Receivable Factoring is not a loan, and therefore no debt is incurred.
Factoring is often referred to by other names including; Account Factoring, Accounts Receivable Factoring, Business Factoring, Factoring Services, Receivable Factoring, or Invoice Factoring.
Invoice Factoring is different from a bank loan in two significant ways. First, the Accounts Receivable Factoring Company places the emphasis on the value of the Receivables, not the firms credit worthiness or fixed assets. Secondly Accounts Receivable Factoring is not a loan, it is the purchase of a financial asset (the receivable). The Receivable is a financial asset associated with the debtors liability to pay money owed to the seller for work performed or goods sold. The seller sells its invoices (the Receivables) at a discount to the Factoring Company to obtain the cash needed for day-to-day operations.
Factoring transfers ownership of the Receivables to the Invoice Factoring Company. The account debtor is then notified of the sale and then remits payment directly to a lockbox designated by the Factoring Company.
A Factoring Company may provide other mission critical services including credit analysis, risk assessment, a/r management, billing, collections, treasury and 24/7 web reporting.
There are three integral parts to an invoice Factoring transaction.
1. The fee, this is the amount a Factoring Company will charge you for the service. Most Factoring Companies will charge you a Factoring fee also known as a service charge as well as interest based on how long it takes the debtor to pay.
2. The advance, this is the percentage of the face value of the invoice you will be paid upon submission of that invoice.
3. The reserve, this is the remainder of the total invoice amount held until the payment by the account debtor is made in full.
TCI Business Capital is a leading Factoring Company. TCI Business Capital provides Invoice Factoring services to a wide variety of small to mid-sized companies.
TCI Business Capital has earned a reputation for providing world-class service to companies who need Accounts Receivable Factoring for their businesses. When searching for Invoice Factoring Companies, look no further than TCI Business Capital.
Banks often call their Factoring programs Factoring loans. Don't be confused with this statement because Factoring your Accounts Receivables is not a loan. Accounts Receivable Factoring is simply the sale of your invoice at a discount to an Invoice Factoring Company.
Are you interested in learning more about Invoice Factoring with TCI Business Capital?
Call today and talk to one of our Factoring specialists. Our specialists will give a free consultation on how Invoice Factoring can help your business succeed. With TCI Business Capital there is no red tape to cut through or bureaucratic maze to navigate.
TCI Business Capital makes the Invoice Factoring application process simple and straightforward, and what's more, TCI Business Capital can get you approved in just 5 minutes.
TCI Business Capital - Industries Served
| Oilfield Services | Trucking & Logistics | General Industries |
Sometimes securing a Factoring Line can be a challenge because of the unique nature of your business. We offer a variety of creative Factoring solutions to companies providing a wide range of services in many different industries. We take pride in understanding the needs of our clients and working with them to meet their goals.
For more information on TCI Business Capital, please call 800.707.4845
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