Turn invoices into cash on your timeline.
We prepare your case, check it the way a lender would, and introduce you to the few lenders whose criteria fit. Facilities from $5 million, typically $10 million to $250 million.
Who this is for
- Growing companies whose customers pay slowly relative to their own costs.
- Companies whose own credit is thin but whose customers are strong.
- Businesses with seasonal or project-based receivables, in sectors such as staffing, transportation, manufacturing and wholesale.
Not a fit: programs under $5 million; companies whose invoices are mostly disputed or consumer; those wanting a loan-style revolver with the lowest cost (an asset-based facility may suit better).
What we do
- Assess fit. Customers, invoice volume, terms and timing. No documents.
- Engage in writing. NDA and engagement terms, including every fee, before information changes hands.
- Prepare the case. We review the receivables, customers and any existing liens as a factor would.
- Introduce. To factors whose written criteria match your customers, volume and structure. Shared only in an access-controlled data room under NDA.
- Compare and close. We help compare proposals, support diligence and manage the process. The factor underwrites and funds.
What lenders will ask for
The package, as a checklist (a secure data room is opened after the NDA):
- Accounts receivable aging, by customer, with terms
- Customer list with names, sectors and payment history
- Sample invoices and supporting documents such as contracts and proof of delivery
- Monthly invoice volume and expected growth
- Existing liens on receivables, especially a bank's
- Financial statements for two to three years, with interim figures
- History of disputes, credits and returns
- Any restrictions in customer contracts on assigning receivables
What drives the structure
| Factor | How lenders usually treat it (typical, varies by lender) |
|---|---|
| Debtor quality | The creditworthiness of the customers who owe the invoices |
| Advance | A percentage of invoice face value paid up front. The remainder is reserved and released, less fees, when the customer pays |
| Fee | Charged per period an invoice is outstanding, or as a flat percentage |
| Recourse | Whether the company stands behind unpaid invoices |
| Concentration and dilution | How much one customer represents, and how much is lost to credits and disputes |
These describe how the product generally works. They are not terms we offer or a prediction of what a lender would offer you. See the glossary.
Where applications get stuck
- A bank's lien on receivables blocks a sale until released or subordinated.
- Concentration. One customer is most of the book.
- Disputed invoices or heavy dilution.
- Assignment restrictions in customer contracts, and special rules for some government receivables.
- Customer notification. Some programs tell customers to pay the factor, and some companies resist that.
- Cost. Factoring can cost more than a loan. If the company qualifies for an asset-based facility, compare.
Fees
Your engagement agreement sets out what you pay and when, before you sign. In short: an underwriting fee at engagement, and an introduction fee payable only if a financing closes with a lender we introduced. The underwriting fee does not guarantee that any lender will offer terms.
Questions
How is factoring different from an asset-based loan? You sell invoices rather than borrow against them. It is often quicker to set up and relies more on your customers' credit than your own. It can cost more. We introduce both types.
Will my customers know? In some programs, yes. In others, no. We match against your preference.
What if a customer does not pay? It depends on whether the program is recourse or non-recourse. The terms say who bears the loss.
Do you lend? No. Lenders underwrite and fund. We introduce.
Who sees my information? Only lenders whose criteria fit, only after an NDA, only in an access-controlled room where every view is logged.
Commercial lending introductions are provided by River Guide Labs, LLC. They are not securities transactions and are not offered through Finalis Securities LLC. Securities transactions are offered only through Finalis Securities LLC, Member FINRA / SIPC. River Guide Labs does not lend, commit capital or guarantee that any financing will be offered. Size ranges are typical, not offered terms and not a record of past transactions.