This was the beginning of a very important trend in U.S. capital markets. Both lenders and investors realized that sometimes an investor is better off in terms of risk if he buys a pool of loans than if he lends money directly to the company that booked the loans.

Nowadays, investors invest directly in all kinds of grouped assets: mortgages, student loans, car loans, credit card receivables, leases, even franchise dues or insurance premiums. They do this by buying ABS, notes or bonds issued by a special purpose company, the sole function of which is to hold the receivables which are the assets that back the securities. ABS have become so much a part of our financial markets that, in 1993, more ABS were issued than corporate bonds.

Receivable Financing

Receivable Financing Companies

Invoice Factoring Companies
Receivable Financing Company

Trucking Factoring Companies

 

These special purpose companies are hybrids: like banks and finance companies in the sense that they are interested only in earning interest on a financial transaction, and like factors in that they purchase receivables.

Receivable Financing

Receivable Financing Companies

Invoice Factoring Companies

 

One set of basic criteria are applied by conventional cash flow lenders, which include commercial lending departments of most banks. They are the three C's of collateral, cash flow, and capital. If any one of these is deficient, unfortunately, conventional lenders will usually reject the loan.

 

Companies specialized in raising money through securitization have started to focus on financing health care providers in general and nursing homes in particular. These ABS companies typically will buy a nursing home's receivables but leave the collection and whole receivable management process in the hands of the nursing home. ABS companies are highly experienced in an extremely narrow field. They can derive a greater amount of confidence than a bank from the assets they finance. Consequently they do not focus on a company's financial standing as much as a traditional lender does. But these are not the only reasons they can be an attractive alternative to traditional lenders for nursing homes

A company for which sale-leaseback of equipment worked particularly well was one entering the automotive industry as a tier one supplier. The process entailed long lead time between order and production. Much of this time was spent tooling up and investing in expanded staff and facilities. Naturally, the result was projected operating losses until this new business started. A conventional bank could not see past the months of anticipated negative cashflows.

An equipment lessor, however, could be much more collateral focused. The ultimate structure allowed the company to sell the equipment to the lessor for 100% of its cost and to lease it back for five years, returning it to the lessor at the end of the term at a reasonable rate of interest. If the company wished to purchase the equipment at lease end, the effective interest rate was significantly higher. But then again, the desire to purchase would mean that the new program had been successful, and that there would be plenty of profits to spend. In this manner, the arrangement reduced the risk to the company.

invoice factoring company
and account receivable factoring
and accounts receivable financing

invoice factoring company
and account receivable factoring
and accounts receivable financing
Advance Rates that Exceed
   Industry Norms by 20%
   We offer cash advance rates up to 97%
   The typical maximum in the invoice factoring    industry is 80%.
   We can offer you higher advances because
   of our unique financing capabilities

Flexible Contracts-
   We provide you with contracts
   that meet your cash flow needs,not ours.
   receivable funding companies
receivable financing companies