Invoice Factoring Broker Training
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If you are new to brokering invoice factoring deals. Here is a quick primer to get you started.
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Invoice Factoring Broker Training
- 1. Working Capital Solutions For Business Factoring Made Simple www.CharterCapitalUSA.com
- 2. •Founded in 2001 •Principals with more than 40 years of combined experince •Headquartered in Houston, Texas •National Reach (clients all over the U.S.) Who We Are Charter Capital www.CharterCapitalUSA.com
- 3. •Invoice Factoring is a form of commercial finance whereby a business sells its accounts receivable (in the form of invoices) at a discount. •Factoring is not a loan, a form of debt, or a form of equity. •Factoring is a funding option for undercapitalized businesses that wish to improve cash flow. What is it? Factoring www.CharterCapitalUSA.com
- 4. How Does It Work? Factoring www.CharterCapitalUSA.com The business invoices their customer as they always have. The business submits the invoices that they want to factor to Charter Capital. Funds are wired directly to the business, usually within 24 hours. Charter Capital waits for the payment from the customer, and the business continues to grow free from the worry of cash flow. Charter Capital Waits For Payment From Customer Charter Capital Sends Money to Business Business Invoices Customer
- 5. •Trucking Companies •Staffing Companies •Service Providers •Manufacturers •Security Companies •Oilfield Service Companies •IT Consulting Companies •Outsourcing Firms •...and more...!!! What Is A Typical Client? Clients www.CharterCapitalUSA.com Almost every commercial business (B2B) that has solid customers and is in need to improve cash flow is a good candidate for Charter Capital’s invoice factoring services.
- 6. •A company that sells to other businesses (B2B) on credit. •Doing at least $20,000 per month is sales. Our ”sweet spot” is between $20,000 and $1,500,000 per month in sales •Company must have credit worthy customers. Who Qualifies For Factoring? Clients www.CharterCapitalUSA.com
- 7. •Q: ”What if my client received a payment for a factored invoice?” •A: Tell your client not to cash it. Forward it to us. •Q: ”How long does it take to get a client set up for factoring?” •A: Typically 3-5 business days. •Q: ”Once set up, how fast do they get their money?” •A: Typically the same day or the next business day. Common Questions? Clients www.CharterCapitalUSA.com
- 8. •Brokers are recorded in our system at the same time the client is. •Every time a payment arrives to pay an invoice, the fee is recorded and commissions are automatically calculated. •Commission payments are sent to the brokers by the fifth of the following month via ACH. How Do Brokers Get Paid? Brokers www.CharterCapitalUSA.com
- 9. •Example: Client does $200,000 in sales per month and we fund all invoices. •For this example our rate is 2.5% per month for invoices that are paid during that month. •Broker’s commision for the first month would be $500. •$200,000 x 2.5% = $5,000 x 10% = $500 •If a broker can add only one new client each month, by the end of the year the broker could have $6,000 in monthly commissions. So, How Do Brokers Make Money? Brokers www.CharterCapitalUSA.com
- 10. What Makes Charter Capital Different? Selling Points www.CharterCapitalUSA.com 1 Year Contract Required w/ early exit fee Yes NO 2 Year Contract Required w/ early exit fee Yes NO 3 Year Contract Required w/ early exit fee Yes NO Monthly Minimum Balance Yes NO Monthly Minimum Fee Yes NO Large Application Fee / Deposit Yes NO Potentially Poor Service Yes NO Hidden Charges Yes NO Potentially Annoyed Customers Yes NO Scrutiny of Owner’s Personal Credit Standing Yes NO Confusing Reports & Payment Notification Yes NO Difficult Invoice Submission Process Yes NO Stringent Financial Reporting Requirements Yes NO Mandatory Total Invoice Verification Yes NO Lost Control of Your Collections & Customers Yes NO Other Factoring Companies
- 11. •Charter Capital is comitted to excellent service. •No ”Hostage Taking”. •Charter Capital retains clients based upon high levels of satisfaction. Why No Term Commitments? Selling Points www.CharterCapitalUSA.com
- 12. No Hidden Fees Selling Points www.CharterCapitalUSA.com Hidden Fees vs. Charter Capital Actual Competitor Fee Schedule
- 13. Gross Sale = $ 100,000 Raw Materials (COGS) = $ 60,000 Labor (COGS) = $ 10,000 GROSS PROFIT = $ 30,000 10% COD Discount = ($ 6,000) Cost – Factoring 30 Days = $ 2,500 NET SAVINGS = +$ 3,500 Businesses Can Profit From Factoring Selling Points www.CharterCapitalUSA.com Example: Manufacturer 10% COD Discount
- 14. •Complete Simplified Application •Include: A/R Report Copy Principal’s Diver License Sample Invoices Example Contracts (if applicable) • Email –or- Fax To Charter Capital • Terms Sheet to Business – Usually Within 24 Hrs. The Application Process Getting Started www.CharterCapitalUSA.com
- 15. THANK YOU! www.CharterCapitalUSA.com Factoring Made Simple ! Working Capital Solutions For Business www.CharterCapitalUSA.com