NCET

Factoring is when companies sell their accounts receivable in exchange for a cash advance that’s generally about 80% of the invoices outstanding. The “factor” — which might be a traditional lender or an independent factoring company — will then use the 20% or so portion kept on reserve to cover its fees and then return the balance to the business after all receivables are paid in full. Fees on factoring tend to range from 2% to 6% of the invoice amounts, depending on how long it takes the factor to collect the client payments and the credit-worthiness of those clients. Read more:

Technorati Tags: Bert Goldberg, International Factoring Association, Kelly Spors, Smalltalk, NCET, Nevada’s Center for Entrepreneurship and Technology

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This entry was posted on Sunday, October 12th, 2008 at 5:14 pm and is filed under Industry News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.