FactoringMarch 5, 2022 2022-03-06 11:44
Lesson Six. Factoring. Hi guys, in this video, we will talk about factoring. In order to receive payment for the goods in the shortest possible time, it is very convenient to use the services of factoring. I will try to explain what it is and how it works. Factoring firms charge for services in the range from 1.5 to 5% of the invoice amount. Funds are paid to them no later than two days after the invoice is provided along with all the related documents.
Before registering with the factoring service, you should first get a sample contract and then carefully study it. We will consider an example with the factoring company, RTS. On the RTS website, the number by which you contact the representative is indicated after which the contract is sent to you. It is quite simple. Red marked fields to fill are clearly indicated. Read the document carefully. It’s pretty simple. Standard questions about the company, title, address, mail, phone, MS number, type of company, in your case, LLC, number of trucks and trailers in the company. Have you used factoring services before? How did you find out about the company, company owner information, name, address, date of birth, phone and the question of whether you were previously judged? Attach to the agreement, insurance, Article of incorporations, Void Check (invalid check) and photo ID.
Sign and specify date of filling. You will also need to add three companies that can vouch for you. This is a very important point. In addition, you provide an information about the insurance company, name, email, and phone. In the end, fill out the W-9 form and sign. It is up to you to work with factoring service who’ll receive money from a broker for account within 30 days. It also depends on how big your company is. In this business, it’s important to receive income regularly and quickly.
There are big companies where there are more than 100 trucks. For such companies, a more profitable option is to receive money directly from a broker from the account within 30 days and not to pay interest to the factoring company since the amount of interest is not going to be small. Additionally, the amount of payment is large, and this money is enough for all expenses that will be accumulated within a month. Let’s consider another option where your company only has one or two trucks.
In this case, working with a factoring company is very profitable, since you will constantly have expenses for which you need money. This includes both the filling of the truck and other inline expenses. In this case, factoring gives you the opportunity to constantly receive the money that you need in a short time. Therefore, for a small company, factoring is a very good option. Good luck in all your endeavors. See you in the next video.