Accounts Receivable Financing

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Accounts Receivable Financing  
Professional Leverage Plan
Presented By
Presented To
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Accounts Receivable Financing
What Are Your Future Goals?

• Retire early?
• Have asset protection?
• Leave money for your kids?
• Live a comfortable life?
• Maximize your assets?
• Maximize total savings?

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Accounts Receivable Financing
Goal Achievement Is Never Easy

• You never know the problems that can surface
• Divorce
• Taxes
• Litigation

• Unemployment
• Disability
• Death

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Accounts Receivable Financing
Think About Your Current Assets

• Business
• Real Estate
• Bank Account
• Retirement Plans
• Stocks
• Bonds
• Mutual Funds
• Hopefully all of these
• assets are working towards
• future financial goals

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Accounts Receivable Financing
What Are Your Plans?

• What are your investments?
• What lifestyle are you planning for?
• How long are you going to work?
• What do you plan on doing with your
• business upon retirement?
• Have you put enough away for your
• retirement?

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Accounts Receivable Financing
Let Us Put The Pieces In Place
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Accounts Receivable Financing
What is Accounts Receivable?

• Accounts Receivable is a current asset on your
  balance sheet.
• In other words, Accounts Receivable is a
  contractual payment or stream of income due to a
  corporation for products or services performed.

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Accounts Receivable Financing
The Problems Associated With A/R

• Accounts Receivable is unprotected from
  creditors.
• Accounts Receivable remains a dormant asset.
• A/R Value Today A/R Value in 20 Years.

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Accounts Receivable Financing
Options For Accounts Receivable

• Do Nothing. Simply let the asset remain dormant
  and vulnerable to creditors
• Factor and sell ownership of the asset at a
  discounted rate.
• Today, there is a new solution
• ACCOUNTS RECEIVABLE FINANCING

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Accounts Receivable Financing
What is A/R Financing?

• It is a program specifically meant to utilize the
  VALUE of Accounts Receivable through leveraged
  interest rates and appropriate investing.
• This method can turn your A/R into a future
  income stream, while providing a level of asset
  protection without interrupting the everyday
  collection of A/R to your company.

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Accounts Receivable Financing
Why A/R Financing Works
Compound Interest vs. Simple Interest

• Compound Interest Interest earned not only on
  your principle investment, but on the accrual
  earnings as well.
• Simple Interest Interest which is computed only
  on the principle balance

A/R Financing works because the loan within the
plan is a simple interest loan. Where as the
investment vehicle utilized generates growth at a
compound interest rate.
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Accounts Receivable Financing
Sample Case The Client
The Client Age 45 Current Accounts Receivable
300,000 Tax Bracket 40
The Clients objective is to access the cash
value of the policy to provide a tax-advantaged
supplemental retirement distribution stream, a
level of asset protection for his practice, and a
death benefit for protection for estate planning
and business transfer purposes.
After a brief credit check and evaluation of the
clients assets and liabilities, the client
qualified for 100 of the value of the A/R
equaling a 300,000 loan.
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Accounts Receivable Financing
The Policy
Total Policy Premiums
60,000
(Distributed to Policy Over 5 Years)
Year 1 Net Death Benefit
2,827,000
Annual Program Interest Cost
20,100 Paid by the Client
Age to Begin Distributions
65
Annual Distribution from Cash
66,000 Value for 20 years
Total Program Interest Costs 400,200
(Assuming Client Collect A/R and Pays off Loan in
Year 20)
Total Distribution from Cash Value 1,320,000
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Accounts Receivable Financing
Case Summary

• If nothing was done
• The Client would have had 180,000 of income from
  his 300,000 of A/R
• 300,000 less 120,000 in taxes at 40

• A UCC-1 Lien has been placed against the A/R to
  serve as a layer of asset protection during the
  Clients working career.

• The Client now has a tax-advantaged supplemental
  retirement income of 66,000 for 20 years.

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Accounts Receivable Financing
Custom Design Created By Asset Leverage Services
and the Professional Leverage Plan

• Plans specifically designed for supplemental
  income upon your retirement
• Strategies created to pass a death benefit on to
  your beneficiaries
• Multiple option for loan repayment
• Payment upon expiration of loan terms
• Upon retirement
• From the cash surrender value of the policy
• Upon Death

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Accounts Receivable Financing
The Process

• The business professional has a minimum of 75k of
  Accounts receivable in his or her company
• The client works with APS to define the goals
  they would like to achieve with A/R Financing
• The client collects all financial information
  for APS and completes a brief application
• APS works with our lender, life insurance
  carriers, and annuity carriers to create the most
  suitable design for the client

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Accounts Receivable Financing
The Process

• Once approved for the loan, the lender will lend
  up to 100 of the A/R
• The A/R will become collateral for the loan and
  the lender will place a UCC-1 lien on the A/R
  serving as a layer of asset protection
• Loan Proceeds are used to purchase a UL life
  insurance policy or annuity. The lender will
  have collateral assignment on the investment
  vehicle chose
• The investment will undergo an accumulation
  period to create supplemental income upon
  retirement

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Accounts Receivable Financing
The Process

• Paying off the loan The client can choose to pay
  off the loan once loan terms are reached upon
  retirement, out of the cash value of the policy,
  or upon death
• At retirement the client can receive a
  supplemental income stream, which can be tax free
  if a life insurance product is the chosen
  investment vehicle
• Upon death the clients beneficiaries will
  receive a tax-free death benefit for estate
  planning purposes

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Accounts Receivable Financing
Contact Information
Advanced Planning Services, Inc 1500 State
Street, Suite 220 San Diego, CA 92101 P
619-220-8116 F 619-398-1547 www.apshome.com