Learn more about Invoice Factoring

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.

Invoice Factoring Today

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 firm’s 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 firm’s 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.

Invoice Factoring Terms

There are many different names Invoice Factoring Companies refer to Invoice Factoring including, Factoring Invoice,Invoice Factoring, Business Invoice Factoring, Accounts Receivable Invoice Factoring and Factoring Invoice.

Invoice Factoring is a financial transaction whereby a company sells its Accounts Receivable (invoices) to a Invoice Factoring Company at a discount in exchange for immediate cash.

Invoice Factoring is different from a bank loan in two significant ways. First, the Invoice Factoring Company places the emphasis on the value of the Receivables, not necessarily the firm’s credit worthiness or fixed assets. Secondly, Invoice Factoring is not a loan – it is the purchase of a financial asset (the receivable). The Receivable is a financial asset associated with the debtor’s liability to pay money owed to the seller for work performed or goods sold. The seller sells its invoice (the Receivable) at a discount to the Invoice Factoring Company to obtain the cash needed for day-to-day operations.

The sale of the Receivable (or invoice) 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 Invoice Factoring Company.

Invoice Factoring Companies provide other mission critical services including Credit Analysis, Risk Assessment, AR Management, Billing, Collection, Treasury and 24/7 web reporting.

There are three integral parts to an Invoice Factoring transaction.
1. The fee, this is the amount an Invoice Factoring Company will charge you for the service. Most Invoice Factoring Companies will charge you a Factoring fee also known as a service charge, 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 Invoice Factoring Company. We provide our Invoice Factoring service to a wide variety of small to mid-size service companies.

We have earned a reputation for providing world-class service to companies who need Invoice Factoring lines for their businesses. When searching for a Invoice Factoring Company, look no further than TCI Business Capital.

Banks often call their Factoring programs Factoring loans. Don’t be confused with this statement because Invoice Factoring is not a loan. 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 Invoice Factoring specialists. Our Invoice Factoring 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. We make the Factoring application process simple and straight forward, what’s more, we’ll get you approved in just 5 minutes.

Do you want to learn more about Invoice Factoring? Call 800.707.4845

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 in a wide range of companies. We take pride in understanding the needs of our clients and working with them to meet their goals.

Tired of waiting to get paid? Invoice Factoring is the answer for improving cash flow. TCI Business Capital specializes in providing innovative financing solutions to companies in need of cash flow.

Our specially designed Invoice Factoring lines can ease the stress and give you the cash you need to take advantage of new business opportunities.

We are experts in the Invoice Factoring industry

TCI Business Capital offers these Invoice Factoring services:

Oilfield Services	Trucking & Logistics	General Industries
Water Haulers Invoice Factoring	Van Invoice Factoring	Apparel Invoice Factoring
Gravel Haulers Invoice Factoring	Reefer Invoice Factoring	Distribution Invoice Factoring
Vacuum Trucks Invoice Factoring	Flatbed Invoice Factoring	Environmental Invoice Factoring
Frac Sand Haulers Invoice Factoring	Oilfield Invoice Factoring	Fabrication Invoice Factoring
Excavating Invoice Factoring	Dry Bulk Invoice Factoring	Gov. Contracts Invoice Factoring
Site Preparation Invoice Factoring	General Freight Invoice Factoring	IT Contractors Invoice Factoring
Rig Movers Invoice Factoring	Freight Brokers Invoice Factoring	Maintenance Invoice Factoring
Roustabouts Invoice Factoring	Hot Shot Invoice Factoring	Manufacturing Invoice Factoring
Flatbed Carriers Invoice Factoring	Heavy Haul Invoice Factoring	Printing Invoice Factoring
Equipment Rentals Invoice Factoring	Intermodal Invoice Factoring	Utility Contractors Invoice Factoring
Pipeline Construction Invoice Factoring	Roll-Off Invoice Factoring	Security Invoice Factoring
Wireline Services Invoice Factoring	Specialized Invoice Factoring	Staffing Invoice Factoring
Crude Haulers Invoice Factoring	Liquids & Gas Invoice Factoring	Warehousing Invoice Factoring
And More	And More	And More

For more information about Invoice Factoring programs with TCI Business Capital, please call 800.707.4845