Factoring of accounts receivable can be a cost-effective alternative to assist companies who may not qualify for traditional bank lines of credit or who prefer the many advantages that factoring offers. Each day in the United States an enormous volume of factored transactions takes place. Companies in certain industries use factoring as a primary source of working capital including import/export, retail. transportation and wholesale distribution. Factoring is also a practical solution for companies who are no longer a fit for traditional bank lines of credit or have not yet met the 2-3 years "Time-in-business" banks usually require.
Unlike banks who charge interest against the outstanding balance on your line of credit, factoring sources charge a fee for each transaction (invoice) that is determined by a negotiated percentage and the time it takes to collect from the customer. Some banks charge high rates of interest, charge transaction fees and require compensating cash balances. Others, like the banks represented by Dynamic, are more reasonable priced. Factors are similar. There are expensive Factors and reasonably priced Factors. Our factoring sources work with you to minimize or eliminate up-front charges and to arrive at a fee schedule that works for both parties.
Dynamic offers a fee-based service that has proven value as a means of sharply reducing the cost of factoring. We help customers negotiate invoice advance rates, contract flexibility, fee levels and collection period steps that give you the means to control your cost. In additon, we counsel you on selecting the accounts and types of invoices that will make factoring most cost-effective. Our service includes training of your staff to use factoring to your advantage on an on-going basis That includes determining how much to factor, timeframes, invoice management and documentation, monitoring procedures and other management tools.
Our service is fee-based and experience shows that the cost-saving measures we help to implement pay for our fee many times over.