Transform your daily workflows and Rerrange Factoring Agreement

Aug 6th, 2022
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How to Rerrange Factoring Agreement

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hey guys thanks for tuning in its hussein here ceo of diversified funding services and in episode two were going to talk about what it is that we actually do here at diversified funding services again as we mentioned in the previous video were an invoice factoring company based here out of fayetteville georgia and were going to talk to you a little bit about what it is that we actually do which is factor receivables so were going to talk about what is factoring were going to talk about why somebody factors and kind of give you a little sneak peek and show you the process here at diversified funding on how it is that we go ahead and go about the factoring process from the time that our client submits the invoice to us to the advance to the monitoring of the receivables and the invoices to when it ultimately uh collects and what all of that entails so hope you guys find this video informative again if you do wed appreciate a like wed appreciate a subscribe button wherever it app

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Invoice factoring is not a loan but the purchase of outstanding invoices at a discount. Because factoring is not lending, you wont find the typical terms in loan contracts, such as origination fees and monthly or weekly repayment terms, in a factoring arrangement.
Factoring is not considered a loan, as the parties neither issue nor acquire debt as part of the transaction. The funds provided to the company in exchange for the accounts receivable are also not subject to any restrictions regarding use.
Factoring involves the sale of receivables to a finance company, which is called the factor. Under a factoring arrangement, the customer is notified that it should now remit payments to the factor. The factor assumes collection risk. Thus, the transferor has no further involvement with customer payments.
The three parties involved in a factoring arrangement are the seller, the debtor, and the factor.
A factoring debtor is the factoring company that buys the invoice, as they are effectively in debt until the full payment is collected from the customer.
Invoice factoring is a form of alternative financing that involves selling your outstanding invoices to a third party (factoring company) in exchange for cash up front. Because its a sale, not a loan, it doesnt impact your credit like traditional bank financing.
Factoring Agreement Fees For example, a companys facility is ₹2,00,000, and the origination fee is 1%; a total of ₹2000 will be taken from the initial funding. Factoring Fees The amount disbursed by the factor on the invoices purchased is provided at a discounted fee, which is a part of the factoring cost .
Debt-Free Financing A regular bank loan requires taking on debt and has a strict timeline on when you need to pay back the borrowed money. When it comes to factoring, the factoring company pays you up front for your invoices (at a discount) so youre getting paid for what is already owed to you.

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