Call Us Now: : (818) 737-3700
  • Fast AR Funding
  • How Factoring Works

    1
    RECEIVE ORDER
    The Supplier receives an order for merchandise from one of its retailers (or a wholesaler)
    2
    EXTEND CREDIT
    The Supplier:
    • Checks the factors online system to see if there is a credit line in place for that retailer.
    • Submits the order to the factor for approval
    The Factor:
    • The factors online system automatically checks the credit standing for that retailer and responds with an approval, a decline or it queues the pending request to the credit department for review.
    3
    PROVIDE CREDIT PROTECTION
    The Factor: • The factor provides credit protection on all approved sales
    4
    SELL INVOICE
    The Supplier:
    • Ships goods to retailer
    • Sells the invoice, at full value to the factor
    • Sends an original invoice to the retailer, with a remit to note: “Payable to Continental”
    5
    POST RECEIVABLE
    The Factor:
    • Receives the invoice and posts the receivable on its books
    • Maintains retailer payment history
    • Maintains accounts receivable records
    6
    PROVIDE FINANCING
    The Factor:
    • May provide cash advances to the supplier on the receivables prior to collection to support the supplier’s working capital needs.
    • Alternatively, if the supplier does not need cash prior to collection, the factor remits payment to the supplier upon collection of the invoice.
    7
    COLLECT RECEIVABLES
    The Factor:
    • Receives retailer payments and remittance advice. Large retailers submit payments to the factor electronically either by EDI or ACH. Other retailers mail payments to the factors lockbox.
    • The factor applies the cash and identifies shortages and adjustments taken by the retailer.
    • Records the transaction and sends the information to the supplier the day cash is applied.
    • The factor follows up on overdue payments.
    8
    REMIT COLLECTED FUNDS
    The Factor:
    • Credits the suppliers account for payments received
    • Pays the supplier on approved, uncollected receivables, if the retailer is financially unable to pay
    • Applies funds towards advances – reduces loan balance, if applicable
    • Forwards remaining balance to supplier.
    9
    FINANCIAL REPORTING
    The Factor:
    • Provides detailed records of transactions.
    The Supplier
    • Reviews monthly statement of transactions and makes end of monthly journal entries for factoring fee and interest expense as applicable.

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    Contact Continental Business Credit

    15303 Ventura Blvd., Suite 1000
    Sherman Oaks, CA 91403
    Phone: (818) 737-3700
    Email:
    lhirsch@cbcredit.com
    jschnel@cbcredit.com
    mbegley@cbcredit.com

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