Frequently Asked Questions
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FAQ
How do accounts receivable funding work?
Simply put, accounts receivable funding is the purchase of accounts receivable from a business at a discount. It is designed for businesses that need money immediately, and can’t afford to wait 30, 60, or 90 days for a customer to pay. In most cases, either the business owner can’t meet his cash demand (because, for example, his customers are slow to pay or income is slow due to a seasonal slowdown), or his business is growing so rapidly that its cash flow can’t keep up with its growth.
What type of business can take advantage of this alternative funding source?
Any business that generates an invoice and delivers a verifiable product or service qualifies.
Must I agree to finance a minimum volume of future receivables?
No. Finance one invoice or as many as you need to meet your cash flow needs. Stop or continue as needed.
Can a business with a history of bad credit (or a new business with no credit) qualify?
Yes. Another benefit of accounts receivable funding is that it depends on your customers’ creditworthiness, not yours. (And, as part of our service, we do the research to assess your customer’s creditworthiness for you.)
Can my business qualify if we already have existing credit lines, SBA loans, or are a debtor in possession (Chapter 11)?
Yes. Our credit line complements any loan you may have or are seeking. We work with your existing lenders to enable you to access additional funding.
Why Xynergy?
o Because Xynergy has a talented, trained, motivated, and experienced team with high ethical and moral standards.
o We offer friendly and knowledgeable customer service, instant pre-approval, no hidden fees, 24-hour funding once the account is open.
What are the benefits of factoring?
o Easy access thanks to fewer requirements.
o Financial leverage based on the creditworthiness of the debtor.
o The availability grows as revenue grows.
o Instantaneous results.
o Does not generate a liability.
o Immediate liquidity over your assets to:
- Obtain prompt payment discounts
- Increase revenues
- Expand products and services
How much does factoring cost?
The most common misconception to calculate the “cost” of factoring is equating the dollars spent to an interest rate. Factoring is the discounted sale of an invoice. The calculation of the cost of business factoring is, in reality, a small percentage of the net revenue from the invoices you sold. Other calculations are not accurate and make no sense. This is where business factoring can get confusing.
Is Accounts Receivable Factoring a loan?
No. Factoring accounts receivable is the sale and purchase of an asset at a discount. You incur no debt on your balance sheet, and the net result of each transaction will be the conversion of your accounts receivable into cash.
How long must businesses commit to factoring receivables?
Each factor has different requirements as far as contractual commitments. At Xynergy we required a one year contract.
How soon will I get funds once I sell my invoices?
You will usually receive your funding advance within 24 hours following our receipt of your confirmed invoices. You may customize the funding schedule to fit the needs of your business such as weekly payroll or twice a week according to your deliveries.
Why is factoring important?
Factoring is very important because it gives business access to cash from nonproductive assets like receivables. You can receive immediate cash infusion when you deliver your products or provide your services without having to wait for 15, 20, 30, or more days from your clients to pay you.
Are all my invoices eligible for factoring?
Our factoring program provides funding for both new invoices and outstanding invoices.
Invoices that are eligible to factor:
o Current – Not past due according to your company terms
o Payable by another business – Invoice factoring is not an option for consumer or individuals pay invoices
o Unpledged – No other company can have a claim to the invoice.
How do I get started?
Call Us at (855) 358 8258. We will be happy to answer your questions and send you an application. There is no fee to have us review your application and receive a proposal.