Factoring & Asset-Based Lending

Who is this service for?

Contrary to popular belief, these forms of financing do not necessarily signal poor financial condition. There are many reasons for using a factor or asset based lender which include poor financial performance, but also includes high growth situations not suitable for restrictive covenant financing and also the desire to work in a more open wnvironment with financing availability not restricted by limits and fettered with balance sheet measurements, personal guarantees and other personal collateral requirements imposed by traditional lenders.

How does this service work?

A company may make a one-time sale of its accounts receivable in order to obtain quick cash or use factoring to "top up" their bank credit line during peak periods or in unusual circumstances. When you factor a receivable, the lender acknowledges the delivery of goods or services with the customer and pays you virtually all of the invoice immediately turning it into quick cash for you. They then collect the receivable when due and often offer a receivable management service too.

Asset Based Lenders operate on a more traditional manner with your lending requirements satisfied as often as you wish by submitting borrowing base certificates supported by invoice detail to establish your loan availability with loans granted and wired to your account at your request. Collection of receivables is usually through a transparent lock box arrangement or use of a blocked account.