What is factoring?

Factoring is selling your receivables (invoices) to a factor at a small discount. Sometimes factoring is also called “accounts receivable financing”. Factoring provides over 100 billion dollars to the industry each year. In fact, it is an old, time-honored financial service used by huge corporations that is now available to small and mid-sized businesses. Factoring is filling a tremendous void that banks have created.
Basically, a company sells its accounts receivables (invoices), to a factoring company at a discount from face value so that it does not have to wait the normal 30-90 days for its invoices to be paid. In short, factoring helps a company speed up its cash flow, thereby enabling it to use that money for payroll, inventory, new business etc… You can factor your invoices with Manhattan Bridge Capital and receive your money as soon as the invoice is issued, not a month or more later!

Wouldn’t a bank loan make more sense?

Banks often have restrictive lending requirements relating to cash flow, profitability, equity, and years in business which prohibit them from making loans. We base our decision on whether or not to factor primarily on the credit of your CUSTOMERS, not you or your business, so we can help in many situations even when your local bank can’t or won’t.

Why would a company sell their receivables?

Companies that find cash flow as a recurring problem often can’t afford to have cash tied up in receivables 30-90 days. They need the cash to meet immediate present financial demands of their business, like payroll, new jobs/orders, bills or maintaining inventory. Factoring can also SAVE many businesses money. If you are often late making payments and are paying late fees, factoring can help eliminate those costs and help your business run more efficiently while also protecting your credit.

Do I have to sell all my invoices?

NO! You decide which invoices you need to sell to manage your cash flow needs. Manhattan Bridge Capital does not want to manage your company. Only you know what’s best for your business.

How are the fees for factoring services determined?

Fees vary from company to company and from client to client. They are determined by a combination of your customer based creditworthiness, average payment cycle, invoice size and factoring volume.

How much money can I get through factoring?

Manhattan Bridge Capital typically will advance you 70-85% of the face amount of your receivables immediately, and the balance, less our fees, when the invoices are actually paid. For instance, if you have $100,000 in accounts receivables on your books, you could immediately receive up to $85,000 in additional working capital. If your sales increase, so will your receivables, and we will advance you more capital. No more turning down new projects because you’re waiting on payments for past jobs!

Will you collect my old accounts for me?

We generally factor current accounts and accounts that are not past due. Factors are just not a viable substitute for an attorney or good collection agency.