What is factoring?
Factoring is one of many ways for a business to have enough cash—working capital—to fund its day-to-day operations.
So, factoring is like a short term business loan, except that it’s not a loan. It’s the sale of an asset that a business owns. Specifically, that asset is the money your customers owe based on invoices that you’ve sent them. That’s money they’re obligated to pay you.
So, a factoring company offers to buy those invoices from you for a fee. It’s important that your customers have a good track record of paying you. The factoring company may take on the expenses of collecting from your customers, depending on the arrangement.
Finally, the factoring company gives you 70-90% of the value of the invoices immediately—within 24-48 hours of the agreement—so you can start using that cash to make your business grow. Some of the total value is held back until the invoices are paid.
AmeriStrength understands the need for working capital for small business. We’ve been working with businesses just like yours for years, and we can help you get the working capital you need.
What kind of companies do you factor for?
We factor for honest small businesses that need improved cash flow. They must be incorporated or be an LLC and hold a business license. They should have creditworthy customers in either business or government sectors. They should not have problems with Commercial Code violations, unsatisfied judgments, or outstanding liens.
Why use factoring?
If you own a small company or a young company, you may not be able to arrange financing with a bank.
Factoring allows you to quickly inject working capital that can strengthen your balance sheet, enhance goodwill of vendors and partners, assure a dependable supply of raw material, help meet payroll, make tax payments, and achieve many other goals.
Factoring immediately improves your balance sheet by adding cash.
What’s the minimum amount you will factor?
There is no minimum monthly amount that we require. We work with many very small businesses.
Is a long term contract required?
No, you can factor as needed and stop at any time.
Why haven’t I heard of factoring?
Everyone understands what a business loan is. But factoring is a little more complicated. In addition, it doesn’t apply to every business. So, it’s often not discussed.
You might be surprised to hear that factoring has been around for about 3,500 years, dating back to the Babylonians and the Code of Hammurabi. That’s because factoring is really an essential strategy for many businesses to grow
Why do you offer business coaching?
Winners always have great coaches who know the ropes and offer pointers that make all the difference.
Yes, it might be a bit humbling to admit you want help, and that’s sometimes difficult for independent business owners. But there’s no substitute for listening to an objective view of your situation from someone with experience. More often than not, you find you have more and better options than you imagined.
That’s why John Faulkner personally engages with many of his customers to provide business guidance and counseling. The fresh perspective and wisdom of experience that he provides in a relaxed atmosphere are invaluable and completely confidential. John himself has been a part of C12, an organization that trains and mentors business owners and executives. You can learn more about John’s business leadership experience by reading his biography on this website.
A business coaching relationship begins with some discussions with John about your business, with no obligation. From there, you can decide what makes the most sense for your business. Give John a call today.