Factoring

The sale of your invoices for immediate cash
The process works like this: once approved, you send in your invoices. They are reviewed and you are wired an advance within 24 hours. When the invoices are paid, you receive the balance.
Reserves are disbursed weekly as invoices are paid.
Fees vary by case but are typically amount to only a small discount from the receivables purchased.
Transaction sizes up to $20,000,000

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The impact on profits due to factoring is readily seen by comparing the bottom lines before and after factoring as depicted by this classical example:

Impact of factoring on profits

	Before Factoring	After Factoring
Revenues	$100,000	$200,000
Cost of Goods/Services Sold	$65,000 (65%)	$130,000 (65%)
Gross Profit	$35,000 (35%) )	$30,000 (35%)
Variable Cost	$10,000 (10%)	$20,000
Fixed Costs	$20,000	$20,000
Cost of Factoring	N/A	$5,000
Net Profit	$5,000 (5%)	$25,000

The profit after factoring increased both dollar-wise (from $5,000 to $25,000) and percentage-wise (from 5% to 12.5%). Thus by investing $5,000 in factoring, the net profit increased by $20,000 making the return on investment (R.O.I.) in factoring to be: R.O.I. = (20,000/5,000) x 100% = 400%

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