Accounts receivable factoring is the sale of your accounts receivable (invoices) at a discount off the face value in return for immediate cash.
Accounts receivable factoring is the sale of your accounts receivable (invoices) at a discount off the face value in return for immediate cash. The funding source is known as the factor or trade finance company. The primary benefit is to provide immediate working capital and protect you from business (credit risk) losses. The factor may assume the responsibility for the customer’s financial ability to pay and perform credit, collection and related bookkeeping functions.
You deliver a product or service and issue an invoice to your customer. The factor typically advances an initial payment of 70-90% of the invoice amount within 24 hours, less the factoring fee. When your customer pays the factor, the factor pays you the remaining percentage of the invoice, minus borrowing costs.
Favorable export financing can enhance your international sales efforts, giving you an advantage over your competition. Through its financial expertise and established lender relationships, One Source will develop the best export options for your business. Factoring is available for most markets.
Covers 2 types of risks –
Protects from bad debt. Identifies potential losses. ...
An exporter of goods runs the risk that they are never paid for goods that are shipped. To eliminate that risk they can require pre-payment, but that shifts the risk onto the importer.
Overseas trade also comes with inherent risks, for example, exchange rate fluctuations, legal issues, language differences and the potential for political instability. Furthermore, it’s trickier for parties to evaluate the credit risk of their counterparts when they’re based overseas.
Trade finance steps in to guarantee payment and shipment, provided certain conditions are met.
There three main types of trade finance:
Indexed universal life (IUL) insurance is permanent, which means it lasts your entire life and builds cash value. An IUL policy allows for some cash value growth through an equity index account, unlike other universal policies that only grow cash value through non-equity earned rates.
Unlike with traditional 401(k)s, The IUL is funded with non-qualified money, or after-tax dollars. So, what you pay into IUL has been taxed already. That's good news for future income – tax-free retirement income! IUL also offers the advantage of a tax-efficient death benefit for loved ones.
No Minimum Withdrawal Age Requirements Again, unlike retirement plans such as IRAs or 401(k)s, IULs don't require you to reach a certain age before withdrawing funds.
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