What is Factoring? Get Answers and See How Behalf Compares
The True Cost of Factoring for Businesses
Factoring, also known as invoice or accounts receivable factoring, is a way to sell accounts receivable for a discounted, but immediate cash value.
How does Factoring work?
A Factor will pay your business 70-80% of the value of its invoices up front, then attempt to collect from the customer for a specified period of time. However, a Factor will ultimately keep a costly rate anywhere from 4-15% of the invoice value, depending upon negotiated terms with its business customer and the risk profile of its receivables.
How Factoring works compared to Behalf
In addition to being costly, Factoring can be labor intensive. Factors typically require their business customers to fax or mail in original copies of each invoice. There is also ongoing work required of a business throughout the collections process, as the business often retains some liability over the outstanding receivables.
With Behalf, you get 98% of your receivables in your bank account within 1 business day. Plus, our payment solution seamlessly integrates with your checkout process, eliminating the burden of collections completely. Behalf gives your small business customers their choice of payment terms, with 30 days of extra time to pay at no charge, which helps you increase sales.
Behalf charges one simple transaction fee: 2%
- No Application or Due Diligence Fees
- No Reserve Requirement
- No Monthly Minimums
- No Recourse
- No Termination Fees
Check the fine print of your Factoring agreement to compare the total cost of Factoring to accepting payments on Behalf.