Frequently Asked Questions
What is factoring?
Factoring, also known as Invoice Discounting, is where some or all of your book debts are purchased for immediate cash. The situation may arise when your business requires immediate cash to meet its day to day operating expenditure but the business cannot afford to wait for the 30, 60 or 90 days to collect payment from its customers. You may also need the enhanced cash flow to finance growth.
How does it work?
- You select those invoices you wish to factor and advise CC Advantage Solutions
- Upon receipt CC Advantage Solutions will deposit the face-value of the invoice less a small commission into your nominated account within 24 hours
- CC Advantage Solutions will collect the payment from the debtor. You do not have to collect the debt.
How does CC Advantage Solutions differ from other factoring companies?
Traditional factoring, or invoice discounting companies take control of your debtors’ ledger by requiring copies of the invoices you send to your customers. They then pay you 80% of the value of the invoices. You are then required to forward the debtor payments to them as you receive them. The remaining 20% is paid to you, less their fees, on a monthly basis dependent upon current collections. These fees are usually based on the speed of collections which continue to remain your responsibility.
CC Advantage Solutions, on the other hand, has no desire to take control of your debtors’ ledger. We will purchase individual or batches of invoices on an “ad hoc” basis; that is, whenever and how many you choose to factor with us. You can use the service as often or as little as you like. Once you have entered into an agreement with us there is no further compulsion on your part to use the service. You pay a once only set-up fee of $55.00.
The agreement remains in place until either you or we decide to cancel it. There are no ongoing costs and we will take on the task of collecting the outstanding debt.
Can I be required to repurchase the debt?
Yes. This is a standard practice. We are, after all, not a debt collection agency. If an invoice has been factored and we have been unsuccessful in collecting payment, we may require you to repurchase the original debt. This would only happen after a period of 90 days from the date we purchase the invoice(s) from you.