How Accounts Receivable Factoring Assists Small Business
Tuesday, October 13th, 2009 Subscribe To Our Feed
Hello I am Phyllis Rector and I would like to share to you an anecdote about a business owner that we have assisted. So, the Interface Financial Group, we pride ourselves on how quickly we can get people funded. So, I’m dealing with a staffing firm here in Arizona. He actually staffs electricians to electrical contractors. Although he does not work under a sub-contract agreement, he’s still considered as being in the construction industry.
This guy had been making USD 8 million but in 2008, just like the rest of the construction industry, his business fell off. I’d talked to him. Fortunately, he is interested in our service. He is particularly happy about the use-it-as-you-need-it element of our service. No minimums, no maximums, no commitments in terms of time.
However, he is adamant on the idea of having to tell his customers that they were to sign on our notification of sale and consequently have to directly pay us. For him, this is like saying that he is in deep financial debt.
Well, to the unfamiliar, let me say that accounts receivable factoring has been here for over 4000 years already. It is not a new type of financing – and businesses with a larger customer base may be more knowledgeable about factoring. So, please allow me to tell you. Boeing, you know the airplane manufacturer, their suppliers factor their invoices and how do I know, because one of their suppliers approached us for a spot factoring for a really big order.
Okay. So, in any case, this guy finally came contacted me on a Wednesday afternoon. He does weekly payroll on Friday. So on Thursday morning, we met up and had the paperwork accomplished. I got his notification signed and I was able to wire him money by 1pm of Friday so that he could make his payroll and since we wire money, it is good as the same day and he was really pleased. After 45 days, I got paid and I rebated him the difference between the discount and our charges. So, I do want to remind you that we do have some minimum requirements.
We have no minimums as far as the size of the invoice that you sell us but we do have minimums on the size of the companies that we’ll finance. You need to be at a $20,000 a month run rate in terms of revenues revenues. At the very least, you need to have two customers; now, kindly contact me if you start growing out of this recession and are seeing your business pick up.
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