| Q: What is factoring? |
|
| A:
Factoring is the selling of a company's accounts
receivable to a third party. Factoring gives
businesses the power to ensure growth without
depleting equity or incurring debt. |
|
| Q: What type of businesses
does CAFI factor? |
|
A:
We fund commercial construction subcontractors,
service related companies, services companies
such as ground maintenance and janitorial companies,
long haul trucking companies and manufactures. |
|
| Q: Is factoring too
expensive? |
|
A:
If your growth is constrained by your cash flow
and you have an adequate profit margin to cover
the cost of factoring, the cost of lost opportunities
most likely exceeds the cost of factoring. |
|
| Q: How long does it take to process
my application? |
|
| A: We generally
approve applications within 72 hours. |
|
| Q: How long does it take to fund
an invoice(s)? |
|
A:
We follow a process that takes as long as it
takes to get a response from the account debtor
(general contractor or owner) to verify the
commitment to pay the invoice that is submitted
to us for funding. In most cases, the time to
verify these invoices is the driving factor
behind funding an invoice in a timely manner. |
|
| Q: Do I have to be an established
business with a minimum year requirement to be
approved for funding? |
|
| A: No, CAFI has
no minimum requirement. Also, we fund start-up
companies. |
|
| Q: Will factoring benefit my company? |
|
| A:
Factoring can be beneficial to your company when
managed properly, by increasing your purchase
power to purchase materials for the project we
are funding. This allows you to take advantage
of early pay discounts from suppliers ranging
from 1% to 2%. |
|
| Q: Do I have to factor
all of my invoices? |
|
| A:
No, CAFI realizes that it may not be necessary
to fund all of your invoices. You decide which
invoices you want to fund. |
|
| Q: Do I receive my
funds from my factored invoices? |
|
| A:
In most cases, we wire funds directly to your
bank account. |
|
| Q: Are my accounts
receivable pledged as collateral? |
|
A:
Yes, we require a first lien position on all
accounts receivable while you factor with us.
We work in conjunction with a bank if they have
a first lien on all assets. Most banks will
agree to subordinate a portion or specific accounts
receivable to us to allow us to fund certain
receivables. In most cases, the combination
of bank financing and factoring is beneficial
to your company! |
|
| Q: How do I know if
my company will qualify for funding with CAFI?
|
|
A:
If your company sells goods or performs a service
for other businesses with a good credit rating
and has not pledged its accounts receivable
to a financial institution as collateral, your
company will most likely qualify. |
|
| Q: Is it necessary
to commit to a long term contract? |
|
| A:
No, you choose what you want to fund. No early
termination penalties. |
|
