You have to sign up, and once you are signed up, you can exchange your invoices for
immediate cash, This is how you sign up:
- You are going to get a credit limit based on the customers you submit
- Tell us their business name, address, and amount you need
- We pull credit and establish a limit
- Your transaction should be completed as usual
- FedEx, UPS or deliver your invoices
- Use our form to summarize and calculate the amount
- Proof of delivery, just like you do with your customers
- Now we verify the product was received and the service was performed
- Your cash is on its way, we send to your bank
- We wire funds into your bank account within 24 hours
- We retain our agreed fee for service
- We forward your invoices to your customers and they pay us directly.
- You can monitor your business on our system at no
extra charge 24 hours a day on the web!!!
- You can monitor your business on our system at no
How does this benefit you?
- Get cash now to grow your business
- Reduce your expenses
- get a team working on your side for your business
All companies are not the same. Before you sign up to factor, it is important for you to do your homework and make sure that the products we provide can provide you with the best opportunity to increase your business, decrease expenses, and improve your cash flow. Call a ARFinancing.BIZ rep or request information today.
Contact ARFinancing.BIZ today!!!!
Risk in the following businesses: Freight Bill Financing, Freight Bill Purchasing, Factoring, AR Financing, Accounts Receivable financing.
What is risk?
Risk is a concept that denotes a potential negative impact to an asset or some characteristic of value that may arise from some present process or future event. In everyday usage, "risk" is often used synonymously with the probability of a known loss. Paradoxically, a probable loss can be uncertain and relative in an individual event while having a certainty in the aggregate of multiple events (see risk vs. uncertainty below).
What does it mean to you?
When ever money is lent there is always a certain amount of risk taken by the lender. That is why the lender charges interest and fees. Typically the lower the risk, the lower the fees and interest you will receive on your sale of invoices. The higher the risk, the higher the fees and interest on the invoices that you want to sell to a factoring company or AR Financing company.
Your fees are based on to fundamental principles of factoring, AR Financing, Freight Bill purchasing. Those principles are that money must earn a return and you must cover your costs of lending money in this fashion. So, there is operational costs, labor costs, fraud and bad debt costs and then there is return and cost of capital. The company must decide how much money they want to make and then set their rates accordingly. These rates must be competitive in the factoring and accounts receivable market place.
The Lender can make in today’s banking market about 4.5% in a money market account. So instead of freight bill financing your invoices, he can put it in a money market account and earn a 5% return nearly risk free.
Most lenders are not in the business of earning a 5% return. They are in the business to earn a 30 to 40% return. For those types of rates, they are going to experience a risk. Risk that you might clip the checks from your clients when your client pays you directly instead of paying the factoring company, freight bill funding company or ar financing company instead. A risk that the client you sent your products or services won’t sell their products and consequently not pay them back. Risk that their might be fraud.
Why do aged invoices make a difference in your borrowing rate?
AGED INVOICES - There is also a risk as the invoice ages. As you know, most Factoring, AR Financing, Freight bill funding companies will not fund anything that is over 90 days. Why is this? Well, most freight bill funding and factoring companies borrow their money at a much lower rate from a bank and then lend it to you at the rates you see on your fee sheet. The bank they are borrowing from makes AR financing companies, freight bill funding and freight bill financing companies hold a reserve against the invoices they are funding. That reserve is directly correlated to the invoices that you are selling. If your invoice is 90 days old, the bank will tell them their reserve is 100%. That means that any money they give you for your invoices has to come right out of the factoring, AR financing companies pocket. It decreases the equity they have invested in their company and takes away from money they could lend to another company with better aging on their invoices.
So it follows that the younger the invoice is the more money the company can borrow from their bank. If the invoice is under 30 days, the amount of money is nearly 100% for the factoring, AR Financing, Freight Bill Funding Company. If the invoice is 60 days aged, then it is likely it could be as much or as little as 50%.
That is why it is so important to get your invoices to an AR Financing company, freight billing funding or freight bill financing company as quickly as possible. This is where it will cost you less and be much more attractive to companies interested in purchasing your receivables.
What types of Fraud do you see in Factoring, AR Financing?
Fraud has to be factored into the fee that you are charged for Accounts receiving financing, factoring, AR Financing because while you may be the model customer for this product, there are always those that are going to try and steal money that doesn’t belong to them. Fraud which in the world of Factoring, AR Financing, Freight Bill financing, Freight bill purchasing, is a huge expense.
Types of fraud include but are not limited to:
- phony invoices
- check clipping
- posing at the client and the company
There are other types of lending like cash advances and payday loans. These types of loans should not be confused with Factoring, accounts receivable financing, freight bill financing, or freight bill purchasing. The former is a consumer product except in the case of escrow advances which actually go to small business. The latter, factoring, AR Financing, Freight Bill Purchasing and Freight Bill Financing is purely a business loan and the company trying to get these types of loans should have the following qualifications.
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