• How fast will I receive my money?No! As long as your customers are credit worthy and have shown a good payment history, Alternative Funding can factor your receivables.
• Who decides which invoices to factor?Fast! Generally,
Alternative Funding can turn your receivables into cash in as little as 24 to 48 hours after receipt of the invoice.
• Will Alternative Funding accept all of my invoices?You do! One of the great advantages of factoring with Alternative Funding is that you stay in complete control of your business. You decide what invoices you want to factor and when to factor them.
• Who collects the payments?Your invoices must meet our underwriting and credit standards, but the factoring program at Alternative Funding is designed to grow with your business. The more invoices you send to Alternative Funding, the more cash is available for your business.
• What will factoring cost me?Alternative Funding! When we purchase your invoice, your customer will be notified that the payment should be sent directly to Alternative Funding.
• What if I want to stop factoring?Factoring generally cost about the same as if you offered a C.O.D. discount to your customers. But a more important question should be, what will it cost you not to have the needed cash to run your business?
• Can I send old, overdue invoices to Alternative Funding?You can terminate your factoring agreement with Alternative Funding at any time with a 90 day written notice.
No, although Alternative Funding, like most factoring companies, has a collections department we are not a collection agency. In fact, you're better off factoring the accounts that pay on time rather than slow payers to minimize your future costs.
OTHER QUESTIONS
Is factoring beneficial to my company?Answer: It depends upon what you do with the additional time and cash derived from factoring. Factoring can be very beneficial to you if you use it as a tool with which to expand your sales. Many companies are stymied at a given sales level because of their inability to carry the additional receivables that come with increased sales. The irony is that the most profitable sales are generally those that have not yet been made. The reason for this is that fixed expenses such as rent, basic office salaries, telephone, etc., are being paid out of the first sales made. Therefore, the profir margin on the additional sales is generally much higher. But, if you are precluded from making those additional sales due to lack of cash flow, the lost profit on the additional sales generally far outweighs the cost related to factoring.
What are your basic requirements of a factored client?Answer: That you be honest, accurate in your paper work, do business with credit worthy Customers, and be in a position to expand your sales or reduce your expenses as the result of our factoring program.
Do you require that I offer all of my accounts receivable to you for factoring?Answer: No. You are in control, you decide which Customers to factor. After reviewing those offered, we advise you as to which ones we are willing to accept. We do, however, require you to factor all the receivables due from any particular Customer. Attempting to factor some, but not other receivables due from the same customer generally results in a confusing situation for your Customer. There are exceptions to this rule as long as we can make sure that it does not cause any confusion with the accounts payable department of your Customer.
How will my Customers be treated?Answer: A good factor will handle your Customers ethically and professionally. The last thing we want to do is cost you a Customer. That is not good for anyone. A factor is not a collection agency. We will not call your clients and badger them for payment. If an invoice is past due, Alternative Funding Services will call you directly and let you handle it with the Customer.
Do you require personal guarantees?Answer: Yes, of those who are ultimately responsible for the ownership or running of your company. It should be noted that such personal guarantees are only of those obligations of the client which are not paid to Alternative Funding Services. Any shortage in payment due to a dispute or non-payment of an invoice purchased on a recourse basis is a debt owed by the client to Alternative Funding Services and thus is a debt guaranteed. Of particular importance is the fact that you determine whether and which accounts you factor with us. Further, because we work together with you as a team and keep you constantly updated on the status of your receivables, you will know at any time whether there is a problem collecting on any invoices and you have the opportunity to become actively involved in the resolution of the problem. Your Customer is valuable and is handled in a manner which protects your relationship with them.
How long do I have to commit to an agreement with you?Answer: Our contracts are generally terminable upon 30 days notice by either party.
Do I have to be an old established business for you to factor my invoices?Answer: No. Some of our clients are new start-up businesses or relatively young businesses, but they have larger, credit worthy Customers.
Why not just go to a bank?Answer: A bank may be an alternative, however, you should consider:
How do I get started?
- the bank may not loan against receivables
- it may take too much time to go through the loan process
- the bank may not have loan money available
- compensating balances may be required
- a financial audit may be required
- as revenue increases you must qualify for larger loans
Answer: It's simple. You have already taken the first step by inquiring. Next, complete our Preliminary Evaluation Form. We will contact you to discuss a program to fit your specific needs. Once this is done you are only a few days away from your first advance.