Q. How does accounts receivable funding work? 

We purchase accounts receivable from a business at a discount. If a business needs cash, but can not afford to wait 30, 60, or 90 days for their customers to pay, then we can help. 

Q. What types of businesses can take advantage of accounts receivables funding or factoring? 

Any business that generates an invoice and delivers a verifiable product and/or service.

Q. Can my business have bad credit or no credit and qualify?

Yes. Funding is based on the credit worthiness of your customer, not your own. Verifying payee credit worthiness is part of the service we provide at not cost to you.

Q. How much will selling my accounts receivable cost me?

Factoring fees will depend on a variety of items, some of which are: payee terms granted, invoice aging, your gross profit margin, dollar amounts of your invoice, monthly or annual sales, etc.

Q. Do I have to finance a minimum volume of future receivables?

No. You have the option to finance only the invoices you need to meet your cash flow requirements. You can also stop or resume factoring as you desire.

Q. How much of the invoice value do you advance?

Typically the advance ranges between 70 and 85 percent for first month. In the second month you receive the current advance and the reserves from last months' paid invoices.

Q. If I factor an invoice where does my customer send the payment and who is the payment written to?

The Factor (or funding source), they are the collector of the payment. 

Q. How will my customer know to send the payment to the Factor (or funding source)?

When you open a factoring account, you will send a letter to the customer(s) whose invoices were factored, letting them know they should send invoice payment to the Factor. A subsequent letter will be sent from the Factor verifying the same details.

Q. How should I expect the Factor to interface or communicate with my customer?

The Factor presents themselves as an accounts receivables management service that has just granted your business and unlimited credit line. The Factor has a vested interest in your customers satisfaction just as you do. They will communicate via phone and letter. A call to verify the existence of the invoice, and a letter instructing them to redirect the factored invoice payment. Should your customer default on payment, the Factor will speak with you about the matter prior to going to your customer.

 garys@wymac.com