Factoring is a financial transaction in which a business sells its accounts receivable (aka invoices) to a third party (us) at a discount…

Taken further…

Factoring provides customers immediate money with which to finance continued business. Factoring is NOT a loan. There is no debt repayment, no compromise to customer's balance sheet, no long-term agreements or delays associated with other methods of raising capital.

Factoring is not a loan

Q & A

1. What exactly is factoring?

Step 1

Customer performs work or sells product and sends invoice to Debtor

Step 4

Debtor pays PRONTO (30-90 days)

Step 2

Customer sends invoice to PRONTO

Step 5

PRONTO deposits funds into Reserve Account

Step 3

PRONTO provides immediate payment to Customer based on contracted percentage (80-90%)

Step 6

PRONTO deducts fees and amount advanced and sends remaining funds to Customer

2. Why would a company factor?

Some of the benefits of factoring are:

You get instant access to your money, instead of waiting for your customers to pay their invoices.
You improve your cash flow and working capital, which can help you grow your business faster.
You save time and resources by outsourcing your invoice processing and management to the factoring company.
You avoid debt as factoring is not a loan but a sale of your assets.
Factoring can be a useful financing option for businesses that need quick and flexible cash flow solutions.

3. Who would benefit from factoring?

Factoring can benefit businesses that need to improve their cash flow and access funds quickly without taking on debt. Some of the industries that commonly use factoring are:

Oil & Gas Services:

They can use factoring to pay their employees on time and expand operations.
Manufacturing companies:

They can use factoring to cover their production costs, upgrade their equipment, and enter new markets.
Construction companies:

They can use factoring to bid on new projects, buy supplies, and pay their subcontractors.
Transportation companies:

They can use factoring to pay for fuel, maintenance, and driver salaries.

Factoring can be a useful financing option for many types of businesses that invoice their customers and face cash flow challenges.

4. What are the requirements for factoring receivables?

The requirements for factoring receivables vary depending on the factor and the industry. However, some common requirements are:

You have a business that sells goods or services to other businesses or government agencies on credit terms.
You have a minimum monthly invoice volume, usually $10,000 or more.
You have invoices that are due in 30 to 90 days and are not disputed or overdue.
You have customers that are creditworthy and reliable.