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Do I have to factor all of my Invoices?
No! You remain in control by picking which client and which invoice to factor. Our pricing is duration based, so you only pay for the funding you use, when you use it. In fact, you can factor only a “larger” account, if you desire. We have flexible debtor concentration policies.
Are there any minimum volume requirements?
There are no monthly, quarterly or annual minimum volume requirements. This allows you maximum flexibility and ensures you only pay for the funding you actually use.
Do I have to pay an Application Fee? Start up fee? Documentation fee? Closing costs?
Sometimes there is a small "Due Diligence" fee required with the application. Otherwise there are no fees or closing costs.
What information do you need to start funding process? What does it cost to apply?
It usually takes less than 5 minutes to complete the Application. Please be sure to include a current AR aging schedule with the signed Application. We will respond with an answer usually the same business day we receive our quick application from you. There is no application charge.
How long does it take to get funded?
Not as long as you might think. Normally, it takes about three business days to receive the first funding. Please remember that there is a verification process that we perform, so the quicker we complete this step, the quicker the funding. After the initial funding, we fund on a next business day basis. Funds are wire transferred to a bank account designated by you.
What does the factoring process cost?
All of our factoring partnerships are priced on an individual basis.
How does bank rates and factoring rates compare?
When prospective factoring clients compare factoring to automobile or mortgage lending rates, factoring initially appears expensive. Prospective clients tend to annualize the points charged, equating 3 percent per month to an interest rate of 36 percent. This is both an incomplete and incorrect comparison. First, factors purchase accounts receivable at a discount. They do not lend money. Factors are continuously advancing and collecting accounts receivable, providing clients with ongoing reports, credit due diligence, and personalized account management services.
When prospects make this comparison, we ask them to look at the amount they offer for early payment. If the standard 2 percent discount for payment within 10 days is annualized using the thirty-six 10 day periods in a year, they have lost 72 percent interest.
Are they really losing 72% for early payment? Of course not...It is more appropriate to look at the opportunity cost of the funds. If the funds cost 3% per month and you can take them and generate more than a 3% return or save more than 3%, then factoring may be the best alternative. What amount of return is generated when a company has an order but no way to fill it? The answer is none.
A business must weigh the costs of factoring against not having the immediate cash flow. Most often the choice is between factoring and putting up with severe cash flow problems and missed sales opportunities.
How are fees calculated?
As a general rule, their is an 80% advance of the AR that is purchased, with the balance [less the professional fee] paid at collection.
How long is my contract for? Is there a penalty if I would need to stop factoring?
Agreements typically have a one year term. There are no “exit” penalties or liquidated damage clauses as part of our Agreements.
Credit Card Receivables Financing Questions
Q. How easy is it to get approved for a C C Receivable loan?
A. It is a lot easier and faster than a typical bank loan. It typically takes 7 – 10 business days from the time a completed application package is submitted for funds to be transferred.
Q. Is it going to cost me to apply for credit card financing?
A. No -- the application is free and there are no up-front fees charged to our customers.
However, There are charges to customers for out-of-pocket expenses IF we do the loan. Typical transactional costs include those for individual credit reports ($6 per report), D&B reports ($50 per entity), overnight mailing costs, and UCC filing fees (typically $50 per filing for most states).
D&B reports are usually run once every 12 – 18 months, and the UCC filing is good for 5 years, which means that you won’t get charged additionally if a loan is renewed or “re-upped”.
Q. Do we require a personal guaranty?
A. Yes. We require that all owners give personal guarantee.
If your business has a silent partner who is not involved in any of the management decisions, we can make an exception if certain conditions are met. The silent partner’s personal information must be verified by American Microloan and the collective ownership share owned by the silent partner cannot exceed 20%. The personal information of the silent partner and their collective ownership share must be verified by the corporate charter.
Q. I have high enough overall sales, but my VISA/MC volume is very low. Is there any way I could receive funding?
A. Yes. Let’s assume that your monthly total sales amount is $30,000 a month, but your monthly VISA/MC sales amount is only $5,000 out of the total sales. You are seeking $10,000 funding.
We could provide you with a $10,000 advance as long as the credit quality supports such a decision. In these cases, the funding company will have to withhold 35% of the VISA/MC sales to satisfy payment requirement.
We custom tailor our product to suit our customers’ needs all the time. Just ask!
Q. Do I have to switch my current credit card processor?
A. Yes. You must switch to our affiliated processors to receive funding.
Our affiliated credit card processing companies will meet or beat your current credit card processing cost structure. The bottom line is that you’re not going to lose money for having to switch. (Most likely, you will be saving money by switching.)
Q. My credit card processing company gave me a buy-rate for qualified transactions, which is the cost for the processors. How can you beat that?
A. There are many components that make up your credit card processing cost structure. There are qualified rate, mid-qual rate, non-qual rate, transaction fees, authorization fees, statement fees, chargeback fees, etc. There are many credit card processing companies that lure the merchants with very low qualified rates, but make it up by increasing the other components of the total processing costs.
Our processor will make sure that your total monthly credit card processing fees will be at least the same as before or lower. We’ve been able to provide better credit card processing deals for all of our customers so far. It is not just a promise. It is a guarantee.
Unsecured Loan Financing Questions
What are the costs involved?
A. There are no costs until the loan is completed with the funding company and you have the funds. At that time we have a loan consulting fee that will vary depending on the type of loan and the amount. Your consultant will clearly explain the fee, verbly and in writting before we proceed. There is never any obligation on your part.
What is the interest rate and terms?
A. The interest rate is prime plus zero to 4%. The rate will depend on the borrowers credit rating and the lender. The average is usually prime plus 2%. The term of the loan depends on the loan amount and will range from 3 to 7 years.
How long does the loan process take?
A. The loan process from start ot finish takes from 24 to 48 hours depending on the applicants response time after he has been pre-approved. It takes about 24 hours to qualify an applicant.
How much working capital can I obtain?
A. If you are self employed you may borrow between $10,000 and $150,000. If you are a business owner with 2 years or more in business you can qualify for an amount between $50,000 and $500,000. The amount available will depend on a number of credit attributes.
If I pre-qulify, am I quaranteed financing ?
A. No. If you are pre-qualified, it simply means that you have met the pre-qualification requirements and the you are ready to proceed with all the other necesary credit requirements in order to finalize the loan.
Why is this type of loan better than getting one at a bank?
A. There are several reasons. First, you are on your own when you go to the bank for a loan. Second, it can be imtimidating going to a bank to get a loan and you may not provide the right informaion. Very often a mistake starts off a series of mistakes and problems. The experience that we can provide will eliminate costly mistakes and ensure you that your application is processed correctly the first time.
Contact us today!
Account Receivables Factoring | Accounts Receivables Factoring Works For Your Business
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