B2B Factoring Company
What is Business to Business Factoring and How Does It Work?
B2B Factoring is a financial transaction, it's when a business sells its accounts receivable (i.e., invoices) to a third party (Factoring Company) at a discounted rate. Businesses factor their receivable assets to meet its immediate cash flow need. Alliance One, will purchase your invoices and advance up to 90% (the other 10% we would hold in a reserve account) of the invoice face value, within 24 hours of the verification process. Traditionally, if you were to sell an invoice to us today, you will most likely be funded tomorrow. Once the account debtor (your customer), pays their invoice, we will send you back the reserve money, less our factoring fee.
Is B2B Factoring the Right Choice for your Company?
Some businesses offer a 2% discount to their customers who pay in ten days or less. It seems like a logical solution to your working capital issues. While this might work with some of your customers; it will not work with the majority of them, as your customers, also suffer from positive working capital. You need to focus on what you do best, which is growing your business and increasing sales; we will do what we do best, which is providing you with working capital.
Factoring is not a debt and it's not a loan, we simply purchase your account receivables at a discount rate. Having working capital brings you new opportunities, such as business expansion, meeting your growing payroll demands, buying new equipment and most of all, it allows you to offer new credit terms to more customers.
Many distributors are strapped for cash, making it difficult to offer credit terms to new customers, which equates to lost opportunity for business growth. You can now feel secure, offering longer credit terms and taking on new customers, knowing that you will be funding within 24 hours, even if your customer pays us in 90 days. This is why so many businesses turn to the factoring industry, to solve their cash flow needs.