How Factoring is Different from Business Loans

Hi, I'm Phyllis Rector from the Interface Financial Group. I hope you enjoyed the story in my last video to tell you a bit about how we help business owners. This time, this piece is about the question-and-answer segment that my friend Wynn and I did - so we can further shed light on a few inquiries that you might have about our services.

Tell us how quickly would I receive funding?

Well, actually at the Interface Financial Group, we pride ourselves on how quickly we can fund business.We at Interface Financial Group pride on how quickly we are able to fund people and businesses.} Our website even mentions funding in 24 hours. But realistically, this is not true: you have to send your financials, then we need to dig a little bit deeper regarding your financial capacity. So, typically, I have to have to say that funding possibly is going to take 48 hours. Sometimes, the hang up because you know the authorized person to sign the notification of sale is not there. So, that takes some time. And in construction, I have to be honest, it's going to take a little bit longer because the procedure is more complex.

Is it fine to sell just one invoice?

This is allowable -you can sell only one invoice. Our organization requires no minimums, maximums, and even time commitments. Even if we obviously want you to sell more, you can always choose to sell just one invoice.

Can I choose the invoice that I want to sell?

Yes, you may choose the invoice you want to sell and actually we advise that you to sell the invoices that are going to pay more promptly so that you can minimize what it is going to cost. But, you can choose whatever invoices that you want to sell, the ones your cash flow needs most.

How much is the amount that you'll advance?

Well, how much we will advance on any one invoice is dependent on the industry that you are in. Normally, we advance 90% on any one invoice in all industries, with the exemption of construction. We only advance 80% on invoices for construction because we know that in this field, payment takes longer. But, you do not have to take a full 90% or 80% advance all at once.Bear in mind, however, that you do not have to take the full 80 or 90% advance all at once. We can fund you partially - for instance 20% this week, 50% the next week and so one. We are flexible enough to address your every cash flow need.

How much money can I get out of my receivables?

So, let us take the case of a 90% advance. At 90% advance on any one invoice and we buy up to 60% of your current outstanding invoices. This means that your invoices will be under a 30-to-45-day term and with this, you could get approximately 55%. In construction, 80% advance on any one invoice and again, we would buy up to 60% of your current outstanding invoices, current in construction means 60 days because we understand the construction contractors take longer to pay, that's just the nature of the business. Now there's an exception to this. If you have 90% of your business with one customer, we cannot purchase 60 % of those invoices because there wouldn't be any recourse. Okay.

What is "recourse?"

So, recourse. We are buying these invoices with recourse back to your organization and we're going to require a personal guarantee just like the banks. So, if your customer does not pay and this could be because a dispute arose on work that you've done you know after he signed on a notification of sale or you know heaven forbid, that it could be that he gets bankrupt, we need you to either pay off that invoice or substitute the invoice from a different customer. So, if 90% is with one customer, there's nothing to substitute.

Phyllis, how much will it cost?

That is a very good inquiry - I remember you actually chuckling on the phone when I mentioned it is costly.} It is expensive and I did quote you a specific fee schemefor your specific situation. Perhaps the more essential thing here is the fact that our service is so flexible - and you could always not take the advance in full if it is very heavy for you. You forward to us invoices that your cash flow needs. This way, you control the costs related to factoring - of course, there is no price for the peace of mind brought about by knowing that you can make payroll. What's the price of being able to have new work and grow out of this recession? And what's the price of being able to perform on a contract when you have taken it on?

Hopefully, we have answered many of your questions. If you have more, please give me a call or send me an email and I'll get back to you.