Factoring 101

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Factoring 101

• Portia Ramassar
• Paragon Financial Group

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What is Factoring?

• Factoring is the sale of your accounts receivable
  (invoices) to a funding source at a discount off
  the face value in return for immediate cash. The
  funding source is known as a Factor.

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Why Factoring vs a Bank Line

• Business Less than Two Years Old
• Losing Money
• High Client Concentration
• Based on YOUR Clients Credit Worthiness
• Balance Sheet Issues
• Personal Credit
• Bank Line Too Small
• Hyper Growth
• Defacto Credit Department (Credit Protection)

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What Type Business can Factor

• Staffing/Labor Providers
• Manufacturing
• Distributors
• Trucking
• Government Contractors
• Service Providers
• International Sales
• Healthcare
• Construction (Limited)
• And many more

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How to Get Started with A Factor

• Factors Two Page Application
• AR Detail
• Copies of Contracts
• Copies of Invoices
• Other Industry Related Documentation

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Questions to Ask a Factor

• Client (Debtor) Perception
• How are My Clients Treated?
• Verification Process
• Recourse vs Non-Recourse
• Advance Rate Fees
• Time Frame-Approval Funding

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Factoring 101

• Thank you for your Time!
• Portia Ramassar
• Paragon Financial Group