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Understanding advance rates and spot factoring

By March 4, 2019 No Comments

There are a lot of moving parts to invoice factoring, so the more you know the better you will do when choosing your factoring company.

Following are two key points to remember when choosing a factoring company in Virginia Beach, Norfolk, Chesapeake, Newport News, Hampton, Portsmouth, Suffolk, Yorktown, Williamsburg, Smithfield, Isle of Wight, Poquoson, Eastern Shore, and Hampton Roads.

UNDERSTAND WHAT ‘ADVANCE RATE’ MEANS
“Advance Rate” is the percentage of the invoice face value that you will receive upfront. A fair advance rate is 70% to 95% of the face value of the invoice.  For example, if your customer owes you $1,000, you should expect to receive an advance payment of $950 to $700 to your account.

FACTORING MINIMUMS VS SPOT FACTORING
Some factoring companies in Virginia Beach, Norfolk, Chesapeake, Newport News, Hampton, Portsmouth, Suffolk, Yorktown, Williamsburg, Smithfield, Isle of Wight, Poquoson, Eastern Shore, and Hampton Roads will want you to commit to factoring a minimum number of invoices as part of the contract.  Some factor companies will even require businesses to submit all of their invoices from particular customers to the factoring company. This is known as “whole ledger factoring.”

While that style may work for you, you should also know about a more flexible system called “spot factoring” or “single invoice discounting.”  All Merchant Funding offers our clients this type of factoring, which lets you decide which invoice to submit for an advance.

There may be a cost premium with “spot factoring,” but in return you gain more flexibility in managing your invoices, and most likely will pay less overall in the end.   We offer this type of invoice factoring because many of our clients’ businesses are doing well and we do not want to force them to submit every invoice when there is no need to.  We believe a fair system beats a gouging system every time.

At All Merchant Funding we make the application process simple and straightforward. If 24-hour invoice factoring approvals with a streamlined funding process is what you need for your business now, All Merchant Funding is for you.  All we need is a completed application (APPLY ONLINE HERE) and the three most recent business bank statements to get an offer!

We also provide other funding solutions like a business line of credit, merchant cash advance, cash flow loans, merchant funding, term loans, equipment financing, and equipment loans.

Our service area includes Alabama, AL, Arkansas, AR, Delaware, DE, Florida, FL, Georgia, GA, Kentucky, KY, Louisiana, LA, Maryland, MD, Maine, ME, Michigan, MI, Mississippi, MS, North Carolina, NC, New York, NY, Ohio, OH, Pennsylvania, PA, South Carolina, SC, Tennessee, TN, Texas, TX, Vermont, VT, Virginia, VA, and West Virginia, WV.

IF YOU ARE LOOKING FOR a local company that does invoice factoring as well as a honest partner to help grow your business, please contact us at (800) 628-1001 or funding@allmerchantfunding.com.  Thank you!

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All Factoring Companies Are Not Equal
Our company is located in Chesapeake and serves businesses in Virginia Beach, Norfolk, Chesapeake, Newport News, Hampton, Portsmouth, Suffolk, Yorktown, Williamsburg, Smithfield, Isle of Wight, Poquoson, and the Eastern Shore.  Clients count on us for many types of financing like invoice factoring, equipment financing, equipment loans, merchant funding, small business loans, a business line of credit, merchant cash advance, cash flow loans, and term loans. If 24-hour approvals with a streamlined funding process is what you need to grow your business, All Merchant Funding is for you.

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