Frontline will typically fund 70-90% of the invoice amount up front with the remaining amount less Frontline’s fee after the invoice is paid.

Very simply, the accounts receivable factoring is the selling of accounts receivable for quick cash.  Factoring is a lot easier to get than bank financing and companies can get access to cash often in as little as 24 hours.  Factoring companies look at the quality of the of accounts receivable and are not as concerned about the financial strength of the company looking to sell accounts receivable.

Factoring works great for companies that are:

  • New
  • Rapidly growing
  • Are not able to get Bank Financing yet
  • Seasonal
  • Start-ups
  • Undercapitalized
  • Have a lengthy manufacturing cycle
  • Strained by slow turnover of receivables
  • Able to take on jobs/projects that are normally unattainable given current cash flow
  • Able to negotiate better terms with suppliers if paid quicker
  • Improve Balance Sheet (Factoring is not a debt, and decreases your debt to equity ratio, and increases your current ratio).
  • To enhance your company’s liquidity to be able to take advantage of opportunities
  • To eliminate the need for employees specifically designated to decreasing the number of days before collection of receivables. This overhead could be better spent increasing sales.