Invoice factoring is a financial tool whereby a company sells its outstanding accounts receivable at a discount in order to accelerate its cash-flow. With this financial tool, companies who sell their products or services in a B2B environment (Business to business) and offer their clients payment terms from 30 to 90 days, can obtain an immediate advance of up to 90% of their eligible accounts receivable once your client confirms receipt of the product or service your company is selling to them. Selling your accounts receivable to a company like Summar is called Factoring.
Summar provides non-recourse invoice factoring facilities ranging from $100,000 to $5,000,000 which protect your company against any potential bankruptcy or insolvency from your clients.
Non-recourse factoring: Non-recourse factoring means that you sell your invoices to the factoring company whom, under certain pre-negotiated terms, purchases your invoices without any responsibility back to your company. In other words, the factoring company usually purchases your receivables on a firm basis and will usually assume the risk of non-payment solely for credit reasons. If your Customer fails to pay for reasons different than his credit ability to pay for the invoice (or any other pre-negotiated terms or reasons) your company is still responsible to your client for any dispute they could have and to the factor company over the purchase of that specific receivable.