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Frequently Asked Questions

FAQ


What is factoring?

Factoring (also known as invoice discounting) is technically the sale of your accounts receivable at a discount. We pay a significant portion of the face value of your invoice to you immediately after your sale is completed. Rather than you waiting up to ninety days for your customer to pay, you now have the ability to obtain immediate payment from BridgingFactor, thus controlling your cash receipts.

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How does a BridgingFactor factoring facility work?

When you become a BridgingFactor client, you will be able to send us invoices issued by you to the customers you select, together with all pertinent back-up documentation (whatever you usually send to your customer for payment). We will factor the invoices, and will pay the agreed percentage, usually by direct wire transfer of funds to your account, on the same day as invoices are received. Your customers will remit their payments to BridgingFactor, and when payment is received, BridgingFactor will complete the transaction by paying you the balance of each invoice IMMEDIATELY.

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Do we continue to bill our customers as usual?

Yes, you continue to bill your customers as you usually would. However, you will update the remittance address to reflect BridgingFactor’s remittance address.

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How will my customers know to remit their payments to BridgingFactor?

We will prepare a very professional letter, to be produced on your letterhead. The letter simply advises your customers that BridgingFactor is taking part in the expansion and growth of your business. Please contact us to request a copy of our standard letter.

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Are my customers going to be concerned about being asked to remit payment directly to BridgingFactor?

In our experience, almost all customers are happy to cooperate with you. The business community is increasingly accepting the type of capital provided by BridgingFactor as mainstream, and no negative connotations have been attributed to it. Furthermore, our team of professionals will ensure that your customers enjoy working with us, almost as much as they do when working directly with you!

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What if I don’t want my customers to know I am factoring?

That would require non-notification funding, which is available. Non-notification funding often requires much more stringent criteria, extra scrutiny and additional security. Please contact us to learn more.

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What amount or percentage of our invoices will BridgingFactor advance?

Advances are typically 95% of the face value of eligible invoices and is established at the time your BridgingFactor facility is opened. Established advances will, for the most part, depend on risks such as industry, terms of sale and delivery, volume, customer creditworthiness, etc.

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When, how and how often are advances made?

The time and frequency of advances will depend on how frequently you submit invoices for funding. Advances can be paid in any number of ways; the typical way is by wire transfer, but we can also make payment by EFT/ACH, cheque, etc. It can be daily, weekly, bi-weekly or monthly. We will develop a program to meet your individual needs.

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Do I have to factor all of my sales, or can I select specific customer accounts?

You may select the customers and amounts to be factored by BridgingFactor, or you may decide to factor all of your sales through your BridgingFactor facility. We only require that your customers are deemed to be creditworthy by us, and that payment is due in accordance with your usual terms. We will review your customer's payment trends, and, if we are prepared to deal with a customer, we will share our experience with you. As payment is received, the funds are transferred to your account IMMEDIATELY.

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Who will call my customers to collect payment?

We realize how important your customer relationships are. If your business has an effective collection program, you may wish to continue to follow up for payment with some or all of your accounts on our behalf. If you wish us to follow up for payment, we will customize a collection program in consultation with you.

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What if my customer disputes my invoice, returns the goods, fails to pay, etc.?

In these circumstances, we will ask you to replace or repurchase the invoice. Although we check your customer's credit, and share our opinion with you, we do not guarantee their creditworthiness. However, we will assist you with placing the account on collection and/or reporting the non-payment to various public credit bureaus, which will impact your customer's credit rating. Non-recourse programs may be available. Please contact us for complete details.

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How will I keep track of my account?

We will provide you with access to our sophisticated, interactive, online reporting system. Our system will allow you to review your account information in real-time, 24/7. Do you require customized reporting? We’ll work with you to develop customized reports to meet your needs.

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What if my business already has a bank line of credit - does this affect my dealings with BridgingFactor?

We often meet clients who are restricted from growing because their bank isn’t able to meet all of their needs. We can work with the bank to provide additional funding, either seasonal, or an ongoing basis. If assets other than accounts receivable secure your bank financing, you will normally be free to work with BridgingFactor without the bank's involvement.

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How much do BridgingFactor's factoring programs cost?

Our discount rates tend to vary, depending on the nature of your business and your customer profile. Our discount rates are generally structured as a percentage of the invoice amount, payable for the period between the dates of our advance to you and your customer's payment to BRIDGINGFACTOR. As part of our straightforward approach, there are NEVER any additional service charges or hidden costs associated with any of our programs. Please contact us to obtain a discount rate applicable to your business.

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How long will it take to set up an account?

It can take 3-10 days to set up an account, depending on your situation. A typical account can be set up in 4-5 days and all things equal. To get started, please contact us.

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What are some examples of factoring?

Factoring comes in a few shapes and sizes. The most common form of factoring is invoice factoring, which allows BridgingFactor to purchase the accounts receivable of your company at a discount in exchange for an immediate payment. Any business that invoices or extends credit to their customers for services rendered and/or products delivered can utilize BridgingFactor’s services including transportation companies seeking freight bill factoring.

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Why would my company need factoring?

Factoring is a fast and flexible business financing solution for companies that do not want a loan from the bank. It provides predictable cash flow and working capital by eliminating the uncertainty of when invoices will be paid.

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