Factoring is a transaction where a company sells (Factors) its Accounts Receivables, or invoices to a Factoring Company (such as Sallyport Commercial Finance), in order to improve cash flow. With Factoring, the Client Company will have immediate cash available for payable, payroll, maintenance or improving equipment, or other working capital requirements.
Factoring transfers ownership of the Receivables to Sallyport Commercial Finance. The account debtor is then notified of the sale and then remits payment directly to Sallyport Commercial Finance.
Factoring assists the you with the admin of maintaining an Accounts Receivable, sending statements and making collection calls so you can reduce internal overhead, or redirect resource to help your company grow.
Sallyport Commercial Finance works in partnership with our clients, and provides services such as credit checking, risk management, collection services, and admin support to ease the burden, assist with supply decisions and ease cash flow.
There are three integral parts to any Factoring transaction.
- The Fee – this is the amount that Sallyport Commercial Finance will charge you for the service and the borrowing
- The Advance – This is the percentage of the total invoice amount, that Sallyport Commercial Finance pays you upon submission of that invoice
- The Reserve – this is the remainder of the total invoice amount, help until payment by the account debtor is made