Services

B2B Financing Services From Transfac Capital

Invoice Factoring

Traditional Invoice financing is designed for the business who wants to improve cash flow and save time and money on billing, collections, credit management and cash application of payments. This is an ideal solution for small business financing or for a growing company that has cash needs and does not have the resources to spend on accounts receivable management. Transfac will purchase invoices, advance cash within 24 hours, send the invoices to customers (if needed), and manage the collection of the money.

So, what is Invoice Financing?

For over 4,000 years, people have used some form of factoring. Invoice factoring as we know it today is a type of business financing that allows businesses to circumvent traditional means of funding. Methods such as bank loans and private investments are less preferred because of their restrictive stipulations and their long approval times. To receive funding through this type financing, all you need are invoices that can be factored. Basically, you, the company, are selling your debt owed to you for money now.

How does it work?

Your company does work and then bills customers for that work. If you send those invoices to Transfac, we will advance you a large percentage (many industries up to 90%) of the value owed to you in less than a day. Then, when your customer pays the bill several days or weeks later, Transfac forwards you the difference between the payment and the original amount advanced, minus a small fee for administration and funding.

Top Reasons to Consider This Type of Funding For Your Business

  1. Receive payment in less than 24 hours
  2. No new debt, no loans
  3. Eliminate collections
  4. Professional AR management including Credit Management
  5. Improve cash flow and credit

 

Accounts Receivable Line of Credit

Accounts Receivable Line of Credit (AR Line) is for the customer that can manage their cash needs on a daily basis. An AR Line customer will still enjoy the benefits of outsourcing the accounts receivable management. Transfac will purchase invoices and use those invoices as a pool of collateral for a credit line to be drawn upon as needed.

It sounds tricky, but accounts receivable factoring is a simple, popular method of business funding. Traditionally businesses leveraged company equity and assets to secure bank loans. This process can be cumbersome and take a long time – 30 days or more. Because of the long wait for loan approval, companies needed to find another, quicker means of funding. But how could a company circumvent standard time restraints and standard loan amounts? This is where accounts receivable factoring benefits many businesses.

Benefits Accounts Receivable Factoring

  • Pass the buck – Well, not actual dollars, just the responsibility of collecting them. When you outsource your accounts receivable to another company, it frees up precious resources and allows your staff to focus on more important matters.
  • Work your capital – A lot of companies have capital, its just tied up in other resources such as inventory or invoices. Getting some free flowing capital will be far more helpful to your business than already allocated capital.
  • Quick Cash – To acquire accounts receivable factoring, you wont need an intricate business plan or years worth of tax statements. Usually businesses that get accounts receivable factoring have good customers and a good business, but banks don’t like the business financial ratios.

 

Inventory Financing

Some businesses need to carry significant inventory to service customers or have seasonal purchasing that spike inventory balances. As these businesses know, that can create cash flow issues. Transfac can assist with that problem. Transfac works with Accounts Receivable customers to create a secondary funding pool based on cash flow needs and sales projections. While the inventory line is not meant to be a long term solution, it does give added liquidity to an organized company that can seize an opportunity.

Talk with us today to see if this would work in your situation. Transfac prides itself on customizing solutions for client needs. It is solutions like these where Transfac’s experience is the difference over other funding alternatives.

 

Purchase Order Financing

As a secondary source of liquidity, Transfac works with its Accounts Receivable clients to provide funding for order fulfillment. If a client has a purchase order from one of their customers, Transfac can assist by sending money to vendors needed to fulfill the purchase order. When the product is ready for delivery to the customer, Transfac will fund the subsequent account receivable and pay off the purchase order advance.

Purchase Order Financing is just another benefit of working with an experienced company like Transfac. Contact us to today to see how we can assist you and your business.

 

Accounts Receivable Management

Accounts Receivable Management Service (ARMS) is for the customer who does not need financing, but would like to use Transfac’s expertise in accounts receivable management. We will evaluate the customer’s current accounts receivable process and offer a menu of services. ARMS can include processes such as: credit assessment, invoice creation, sending invoices, lock box services, cash application or collection. Perfect for a small or growing business that does not want to add resources for operations, ARMS lets you focus on what you do well–run your business.

AR Assist (for lenders)

AR Assist is designed to help lenders with accounts receivable as collateral better manage their risk. Accounts Receivable is a different asset class and most lenders do not have the staff or the experience to manage this moving and dynamic collateral. Transfac is set up to do just that.

You and your customer will receive:

  • Accounts Receivable ManagementReal time, online reporting
    • Professional light collection of invoices
    • Cash application of debtor payments to correct invoices
    • Management of debtor credit limits
  • Lock box services available

Benefits to the lender:

  • True valuation of AR collateral
  • Workout of marginal deals
  • Funding partner as needed
  • Outsource the work to manage AR the way it is supposed to be:
    • Transfac touches every invoice and does verification calls
    • Transfac looks at the credit of the client’s debtors and limits exposure based on credit ratings, experience and concentration
  • Pricing is based on number of invoices, average size of invoices and number of debtors to be serviced. Most lenders pass the servicing fees on to the borrower.

Please contact us to see how we can help you with one or many of your clients.

 

Debtor In Possession (DIP) Financing

Transfac Capital has been financing businesses since 1942.Sometimes that means that we need to work with clients during a time of reorganization.For companies considering or already in a reorganization plan, having a strong and experienced financial partner can be crucial to the success of the plan.

Most businesses are unable to sustain themselves through the initial phases of a Chapter 11 filing without sufficient availability of cash. Transfac Capital can assist by providing post petition liquidity for a company to pay payroll and other operating expenses during the reorganization process.

Companies receiving DIP financing have a shorter reorganization period and are more likely to emerge from the Chapter 11 process quicker.

Transfac Capital’s experienced staff and legal team have provided DIP financing to several companies including trucking, manufacturing, and service companies. Transfac Capital can be your solution and will provide DIP financing up to $5 million dollars.

Reliable

Transfac’s profession management of the AR process will provide the following benefits:

  • Transfac will provide credit management on company’s account debtors; freeing up management to focus on making the company more efficient and increasing revenue.
  • Transfac will do light collections and, as with most customers, should improve Days Sales Outstanding and cash flow.
  • Transfac can free up billing and cash application for our clients; further improving cost side of the operation.
  • Trustees and creditors appreciate working with a professional and experienced accounts receivable manager like Transfac.

Responsive

Transfac can fund within 72 hours of receiving an application package.Take a moment to have a conversation with one of our qualified representatives to see if your company or client would benefit from Transfac’s services and funding during their reorganization.With just basic information about the company and their customers, Transfac can present a proposal.

Cash flow in a business is not always the same from day to day or week to week. Many companies have sporadic cash needs at different times in their business cycle. A Line of Credit using Accounts Receivable can smooth out cash flow and allow the business to be most efficient with its financial resources.

 

What is Accounts Receivable Line of Credit?

Accounts Receivable Line of Credit (AR Line) is for the customer that can manage their cash needs on a daily basis. An AR Line customer will still enjoy the benefits of outsourcing the accounts receivable management. Transfac will purchase invoices and use those invoices as a pool of collateral for a credit line to be drawn upon as needed.

Accounts Receivable Financing is a simple, popular method of business funding. Traditionally businesses leveraged company equity and assets to secure bank loans. This process can be cumbersome and take a long time – 30 days or more. Because of the long wait for loan approval, companies needed to find another, quicker means of funding. But how could a company circumvent standard time restraints and standard loan amounts? This is where accounts receivable factoring benefits many businesses.

 

Benefits Accounts Receivable Factoring

 

  • Pass the buck – Well, not actual dollars, just the responsibility of collecting them. When you outsource your accounts receivable to another company, it frees up precious resources and allows your staff to focus on more important matters.
  • Work your capital – A lot of companies have capital, its just tied up in other resources such as inventory or invoices. Getting some free flowing capital will be far more helpful to your business than already allocated capital.
  • Quick Cash – To acquire accounts receivable factoring, you wont need an intricate business plan or years worth of tax statements. Usually businesses that get accounts receivable factoring have good customers and a good business, but banks don’t like the businesss financial ratios.

Why Do Banks Decline B2B Financing Prospects?

We often get calls from companies that need business financing and have been turned down by traditional financial institutions. Many of these prospects consider their experience of trying to get bank financing/loans to be a sour experience. Traditional banks don’t really understand your business and how fast it can grow.

Start by looking at the typical b2b financing client. Many clients companies have a short amount of time in operations, but some may have more. Some of them have no hard assets for example: Real Estate or Equipment for the company or for the business owner. Also a number of them are in a rebuilding process; basically they are turning around a troubled business.

How do Traditional Banks Lend? Banks lend against assets you own, exceptional performance or a combination of both. To meet their standards you must have assets, good credit history or both. They want to see businesses and their owners have rock-solid balance sheets with assets that can be used as a guarantee. No real assets means no real collateral. Sometimes they can make somewhat of an exception to the asset rule, but in reality they want to see unrivaled performance showing a long excellent track record of success. And they will usually lend on a combination of these qualifications.

Now, if you look at the typical b2b financing client described above you will see that the majority of the time they will not meet the standards to get traditional bank loans/funds – even if you try really hard. With B2B businesses it’s better to go with a Specialty Financing Company like Transfac Capital’s B2B Financing Company, where we know your business and how you conduct business, so we can help you succeed and are here with you well you grow and expand your company.

 
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