Today's article will be about how factoring companies determine advance rates for their clients. I will be using examples of companies in Los Angeles because even though Fast A/R Funding is a nation wide factoring company, we are head quartered in the Los Angeles area of Southern California.
The city of Los Angeles is home to more small businesses than any other city in the United States. As one of the world’s largest regional economies, Los Angeles hosts 23 of California’s 57 Fortune 500 companies. Small businesses and start-ups struggle with the abundance of competition, high cost of living, and some of America’s highest taxes, leaving many looking for small business financing. Fast A/R Funding fills that need with accounts receivable factoring services in Los Angeles.
A Los Angeles accounts receivable factoring company will typically determine the advance rates they offer to their clients based on a matrix of considerations that include an examination of their client, and their client's customer's attributes.
For today's article we will focus on listing the attributes to be examined, and in part 2 and 3 of this series we will dive deeper into each category explaining how these different attributes affect the Los Angeles Factoring Company's decision.
Client Attributes - For our discussion the term "Client" will apply to the firm selling its accounts receivable to a factoring company:
- Collateral
- Dilution
- Guaranty
- Concentrations
- History
Customer Attributes - The term "Customer" will apply to the customer of the factored client referenced above.
- Financial Strength
- Accessibility
- Time to Pay
- Location
In Part 2 and 3 of this series I will continue the examination of how factoring companies determine advance rates.
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Fast A/R Funding is a nationwide factoring firm headquartered in the Los Angeles area of Southen California. Our technology platform allows us to provide quick factoring services to our clients completely electronically!
