Universal Funding Corporation Brings Factoring Solutions Established Business

  • Added:
    Dec 30, 2012
  • Article Views:
    994
  • Word Count:
    458

Many small and medium sized businesses may not be familiar with the term 'factoring'. Big business has been using this little known financial instrument for decades, but only recently have some financial institutions begun offer Invoice Factoring to small and medium businesses.

Basically, a financial entity like Universal Funding Corporation funds your accounts receivable for a pre-determined rate. This is not a loan, and no debt is entered on your company's balance sheet. The credit of your customers is the primary concern of the factoring company.

Factory solution, including receivables factoring is a fairly new phenomena in small business. They are just not used to the idea of AR funding. This type of system allows your cash flow to be much more fluid; instead of waiting 30 - 90 days for invoices to be paid, with accounts receivable factoring you get your money up front, for a small fee.

The rates are determined through a diverse set of variables; this will depend on volume of sales, the invoiced customer's credit history and payment schedule with you. There are other factors involved with account factoring as well, but term rates are generally low.

Your factoring company will also set an advance rate - this is the amount of the invoice that you will have available immediately. Let's say a company has $100,000 on 30 day terms, and the factoring firm has set an advance rate of 80% and a term of 1.5%. The factoring firm would act as your accounts receivable service, pay your company the $80,000 (80% of $100,000) and receive the customers check at the end of the 30 day period.

This allows your company to immediately move into the production of new orders and ensures a stable financial floor which you can use to maintain and speed up order fulfillment and perform critical maintenance so that production does not suffer needless and expensive delays. This type of account receivable factoring can make a huge difference in profit at the end of the year.

Receivables financing has been used by big business for a long time. Now, with firms like the Universal Funding Corporation, various businesses can now make use of this valuable cash flow tool. Custom business receivable Factoring Solutions for every client is the goal of Universal Funding Corporation. They have been working to deliver financial factoring accounts receivables solutions to business across the spectrum of business, and will develop a specific plan based on your business to give you the best business finance services in the marketplace.

Business funding companies like Universal Funding have helped hundreds of companies with capital funding and debt factoring, and there are other tools that can be brought to bear to make sure you have the money to expand and continue growing when you need it.

Author's Profile

Basically, a financial entity like Universal Funding Corporation funds your accounts receivable for a pre-determined rate.


Please Rate this Article
Poor Excellent