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Contents
 Part 1 Discovery
1 Introduction
A True Story
The Need for Cash
2 What Is Factoring?
The Definition of Factoring
How Factoring Improves Cash Flow
The Difference Factoring Makes
Other Advantages of Factoring
The History of Factoring
3 Why Haven’t I Heard of This Before?
Part 2 Learning More
4 Factoring Versus Other Financing
Who Can Utilize Factoring
Factoring Compared to Traditional Financing
Private Investors
Bank Loans
Venture Capital
Government Programs
Equipment Leasing
5 Faulty Assumptions and Mistakes to Avoid
“Isn’t Factoring Expensive?”
“My Profit Margins Are Too Narrow”
“Won’t a Factor Make Higher Fees from Slow Payments?”
Right and Wrong Accounts to Factor
Right and Wrong Reasons to Factor
Mistakes to Avoid
Fraudulent Invoices
Conversion of Payment Checks
Lack of Cooperation
Part 3 Research
6 Is Factoring for You?
Visualize the Changes in Your Business
Factoring Analysis Form
7 How to Find a Factor
Using a Broker
On Your Own
Referrals
Yellow Pages
The Internet
Sites with Lists of Factors
Matchmaking Sites
Broker Sites
8 What to Look for in a Factor
Features
Niches Served
Volume Required
Services Provided
Credit Screening
Quality Control
Billing
Delinquent Accounts Contact
Notification and Non-Notification
Reports Provided
Response Time
Funding Time Frames
Response Time to Inquiries
Location
Recourse and Nonrecourse Factoring
Capitalization
Application and Setup Fees
Advance and Fee Rates
Other Charges – Hidden and Stated
Monthly Minimums and Term Contracts
9 What to Ask a Factor
Determining a Factor’s Suitability for Your Business
Factor Consultation Form
Part 4 Taking the Plunge
10 Signing On
Pre-Funding Flowchart
The Application Process
Why This Information Is Needed
Due Diligence Factors Perform
Closing Documents
11 Telling Your Customers
What Will My Customers Think?
Notification Versus Non-notification
12 Factoring Procedures
Factoring Transaction Flowchart
Invoice Submission
Customer Verification
Your First Funding
Future Advances
Payments
Rebates
Conclusion
Taking the Next Step
Appendix
Glossary
Index
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