Improve cash flow. Get paid.

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1 A Bridge Capital White Paper Improve cash flow. Get paid. Access cash for your business

2 Why factor? If your business needs immediate working capital but your clients are taking more than 30 days to pay you, factoring or accounts receivable financing may be an option for you. Factoring an invoice can provide you with immediate cash that your business can use. Fast Approvals There are many different lenders waiting for your business and every one of them will be quick to give you an approval if your business meets their criteria. Simple paperwork process The documents that a lender requires is a standard checklist and their paperwork can be prepared quickly and signed by you at your convenience. Flexibility Most lenders will work with you to come up with the best solution for collecting on your invoices. Some lenders will collect for you and others will allow you to collect on your invoices. No upfront costs There is no application fee charged by a lender for looking at your application and making an approval decision. Can factoring or accounts receivable financing help your business with cash flow? Read the rest of this white paper to see if it is a fit for your business. Page 2 of 5

3 What is Factoring? Also referred to as accounts receivable financing, factoring is a process whereby a lender will purchase an invoice from your business that you are waiting to be paid on. For small to medium sized businesses most sales can take up to 90 days or more to collect on. Waiting for payment on an invoice can cause a business to have limited cash flow for operational purposes. While you are waiting for clients to pay you your business still has to pay its bills and if your business does not have access to bank financing the strain on cash resources can be significant. Factoring is a financing resource for businesses who cannot afford to wait for clients to pay and require cash immediately for operating purposes. Factoring can allow a business to meets its obligations as they arise and not be concerned about the time is takes for a customer to pay an invoice. Factoring is easy to qualify for as the lender will base their approval on the invoice and the customer who has to pay the invoice. If a business can demonstrate a track record of collection from a client or if the client is a major company that is well known a lender will be able to purchase the invoice and have confidence to know it will be paid. The amount of the advance can be up to 85% of the invoice amount. Each lender that provides factoring or accounts receivable financing will have different terms and criteria and it is important to know how much money you need and which invoices you should factor. Why Factor? Get cash in 2 days not 2 months Factoring advances can occur very quickly which gives your business cash immediately. Stabilize your cash flow Factoring can remove the pressure associated with managing cash flow which allows a business owner to focus on opportunities instead of collection and customer payment. Grow your business Having access to cash flow can help your business take advantage of the opportunities it has to grow. Cash in your operating account means you can make business decisions with confidence. Alternative to bank financing Traditional bank financing can be difficult to approve for and continue to access due to their ongoing reporting requirements. Factoring is based on your invoices not your bank account. Page 3 of 5

4 How does factoring work? You have an invoice that you are waiting for payment on A lender will review the invoice and set-up an account for your business A lender will perform a credit check and due diligence on your client A lender will give you a cheque for up to 85% of the invoice amount You get cash immediately The lender will collect your invoice for you from your customer The lender will let you collect on the invoice You will receive the balance of the invoice amount less the interest charged You will receive payment on the invoice and pay the lender interest Page 4 of 5

5 How can I make the most of factoring? You may want to consider factoring the invoices from customers that are constantly paying you late. You may include on your invoice an interest charge for late payment which can help offset the cost of factoring. Another important consideration when undertaking factoring is to understand how much money you need and why you specifically need it. As with any type of financing there are costs that should be reviewed so that you know how to use factoring without impacting your profit margins. Not all companies that provide factoring or accounts receivable financing are the same. Interest rates are usually based on a 30 day period and there may be additional administration and processing fees that you should understand. Factoring is a very popular form of credit for small and medium sized businesses and there are many providers to choose from. Choose wisely. Bridge Capital can work with you and your company to make the most of factoring or accounts receivable financing. This may involve spending some time understanding your business, your cash flow and your needs before committing to a decision. What is the next step? You can contact Bridge Capital or visit to learn more and fill out a short application. Once we receive your request we will contact you to collect the documents a lender requires and to get you a commitment for funding. You may need some quick cash for your business at some point and we would welcome the opportunity to help. Page 5 of 5