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Frequently Asked Questions About Funding

What is “factoring?”

Sometimes, businesses find themselves in an “unbankable” position. They may be able to get a small line of credit, but not the capital they need to fuel their growth. In these cases, business owners will often turn to a factoring company like Millennium Funding.

Simply put, factoring is the discounted sale of an invoice or account issued to a credit-worthy customer. As a business delivers its products or services, it generates invoices that are then sold to the factoring company at a discounted rate, thereby producing immediate cash flow. The more the business invoices, the more cash is available to them.

How does a factoring company differ from a bank?

Banks examine a company and its personal guarantors in depth. This examination usually requires three years of financial statements, a cash-flow analysis, and collateral appraisals. It can take weeks (and sometimes months) to complete. And, if a business is lucky enough to obtain a line of credit, that line is typically for a fixed amount. This finite borrowing capacity often limits the growth of that company.

By contrast, Millennium Funding focuses primarily on the credit-worthiness of a company’s customers. Funding is based upon the strength of the customers. This allows a factoring company to fund start-up businesses and other rapidly growing companies that often find themselves unable to get the hoped-for cooperation from their local bank.

Is factoring the same as a loan?

No. A loan is an extension of credit with an interest rate and a specified payback schedule. Factoring is the purchase of invoices at a discount.

Wouldn’t a bank make more sense?

Possibly. If a company is able to obtain a line of credit that is large enough to support its growth, then, yes. But most banks won’t provide a large enough line to support high growth businesses. If you are experiencing a steep growth curve, Millennium Funding can provide the cash flow you need to support inventory purchases, payroll, marketing and working capital.

If I have another lender, can you still help?

Yes. Millennium Funding will either buy out the other lender’s position, or negotiate an inter-creditor agreement with them.

Why haven’t I heard of factoring before?

To many, factoring is the best-kept secret in financing. In fact, today, more than $65 billion is factored every year in the U.S. alone. And although it may sound like a new concept, it actually dates back to the 1700s.

What types of companies factor?

All types. Any company selling business-to-business or business-to-government could potentially qualify for Millennium Funding’s programs.

How will I benefit from factoring?

Two words: Cash Flow. Millennium Funding can help transform your company into a cash business. As soon as you generate an invoice, you can get paid. Your company’s growth will not be stunted because you do not have sufficient working capital.

Do you offer credit services?

Yes. No more “ship and hope.” Millennium Funding can act as your own outsourced credit department. Our credit collection services will help you speed up collections and control bad debt.

What other services do you offer?

Contact our staff today for more information on these other services:

  • Soft Collections
  • Invoicing
  • Payroll

How quickly can I get funded?

An initial approval can be received in days. Subsequent funding requests are approved in 24-48 hours.

Do you work with start-up companies?

Absolutely. Our staff specializes in helping companies of all sizes grow and prosper.

If a company has gone through bankruptcy, or has tax liens, can you still help?

Yes. Millennium Funding routinely assists companies in these situations get back on the road to profitability.

What if I have poor personal credit?

No problem. Credit is established based on the credit worthiness of your customers, not on you or your company’s financial history.

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