Invoice Factoring : What is Invoice Factoring

COLUMBUS, Ohio - Dec. 21, 2015 - PRLog -- There isn't a day that goes by where one of our equipment financing customers asks us for a line of credit. Unfortunately, we don't do lines of credit and, most of the time. the customer's credit or time in business would make it nearly impossible for them to obtain a line of credit. So, we propose Invoice Factoring. That's when we hear it: "What is Invoice Factoring?"

Let us explain:

Invoice Factoring is a means where a company can use its open receivables to get cash. It does this by selling them to a factoring company like ours for a fee. The fee is normally based on the time it takes to collect the invoice. There are two types of Invoice Factoring, Recourse and Non-Recourse, but we will save that for another post.

Here is a brief example of how it works:


• Our customer bills their client for goods or services that have been completed.
• Customer supplies us with a copy of the invoice with any supporting documents.
• We purchase the invoice from our customer after verification. Our customer will get between 70% and 90% depending on the industry and credit of their client.
• When the client pays our customer's invoice, we fund the remaining percentage of the invoice that was not funded less our fee.

It is that simple. The customer can now use his accounts receivable like a credit line.

There are many advantages to Invoice Factoring as well, but again, we will save that for another post.

If you should have any questions about Invoice Factoring, please don't hesitate to call us? We look forward to helping you.   www.usfinco.com or 614-777-0000