Account Receivable/Factoring

Account Receivable Lines of Credit

We use two Accounts Receivable financing affiliates depending on the dollar amount of the financing. In both instances the credit decision is made by the owner who signs the checks. Since we sincerely value client relationships at Leasource, we work with you until the lender places a term sheet in front of you.

Accounts Receivable financing and Factoring provide a credit facility to supplement the working capital needs of growing businesses. While similar to bank financing, qualifying is much easier. Advance rates typically range from seventy to eighty-five percent of your eligible accounts receivable.

Spot Financing and Factoring

Factoring, also known as spot financing, is an alternative which allows a client to offer specific invoices of its choice for funding. This program is well suited for situations when a company only needs to finance a few of its invoices or there is a large concentration of accounts receivable owed by a single customer.

Inventory Financing

Inventory financing is for companies in possession of hard copy purchase orders from qualified account debtors. Inventory financing advance rates typically vary from ten to fifty percent against eligible inventory, and are limited to raw material and finished goods only.

Purchase Order Financing

Purchase Order Financing is generally reserved for existing client relationships with quality Account Debtors (your customers). The financing proceeds are used to purchase the raw mateirals used to satisfy the terms and conditions of the customers Purchase Order.

Pricing

A credit formula aggregates the cost of risk and the administrative burden associated with managing the account. Some of the risk variables include size, profitability, margin, financial strength, collateral quality and secondary support, while the adminstration costs usually lie in the level of monitoring required for each specific client.

Benefits

By using your Accounts Receivable to secure a line of credit, or by Factoring specific invoices, you can smooth out cash flow cycles, make payroll, or purchase raw materials to manufacture products. Other benefits can include:

Taking advantage of vendor or quantity discounts

Increase sales through credit extension

Purchase equipment

Get a larger line of credit than available from traditional sources

Avoid unnecessary dilution of ownership equity

Capitalize on opportunities requiring cash

Develop a continuous source of working capital

Replace higher cost factoring costs