At Apex, we believe in being up front, open, and honest. We want to see our clients succeed and believe education is the foundation to success.
Did you know 50% of Apex’s business comes from current client referrals? Our clients value the service we provide. We have the best credit reporting in the industry, trucking industry experts on staff, and custom tailored rate plans to fit any business size. It’s the Apex Advantage.
See below for more information about factoring.
- General Factoring Information
- Factoring and Your Customers
- The Factoring Process
- How to Protect Motor Carrier Interests in Contracts
General Factoring Information
What is a factoring company?
A commercial finance company that specializes in the purchase of invoices or accounts receivable for cash.
How does factoring differ from bank funding?
Factors make funding decisions based on the credit-worthiness of your customers; a bank makes a credit decision based on your company’s financial history, cash flow and collateral. Because factoring is not a loan, no liability appears on your balance sheet. Also, a factor makes funding decisions in days or hours – while a bank may take weeks or even months. A reliable factor will also provide a personal account executive and a quality credit check system.
Why would a company sell accounts receivable?
Companies with recurring cash-flow problems often can’t afford to wait 30, 60, or even 90 days to get paid. They need cash now to meet immediate financial demands such as payroll and fuel expenses. Factoring helps provide this cash by funding the purchase of accounts receivable, often within 24 hours.
What companies benefit most from factoring?
Each situation is unique. We view every client’s circumstances as an opportunity to create a flexible, dynamic solution. Factoring works well for companies just starting out as well as high-growth companies.
How will your customers be treated by Apex?
Apex collects from your customers in a professional and courteous manner. Because of our long history in the trucking industry, we have valuable relationships with many of the people you already haul for, making the whole process seamless.
How much does factoring cost?
Rates are based on individual and specific circumstances. Factoring rates depend on the credit-worthiness of your customers, your average invoice size, average payment cycle, factoring volume, and so on. In general, the cost of factoring is outweighed by its significant benefits: access to immediate cash; credit check analysis; collections; freight bill auditing; and reporting.
What is the difference between “Recourse” and “Non-Recourse” factoring?
“Non-Recourse” factoring is when the factor takes the credit risk of the client’s customers, which protects the client from credit loss. When an invoice is factored with “Recourse”, it means the client is ultimately responsible for payment, regardless of whether the client’s customer pays. At Apex, we offer both “Non-Recourse” and “Recourse” factoring.
When is factoring NOT a good fit for your business?
- Your business has significant cash reserves free of cash-flow concerns.
- Your business sells almost entirely to less than credit-worthy customers.
- Your business has a significant amount of accounts receivable already overdue.
- Your business operates on low margins.
How much money can I get from factoring?
- We typically advance you between 80 – 90% of your receivables immediately, and the balance (minus our fees) when invoices are paid.
- For example: if you have $100,000 in accounts receivable, you could immediately get up to $90,000 in working capital. The balance due to you of $10,000 (minus our minimal fees) will be paid to you when your customers pay the invoice.
What can I do with the additional cash I receive from factoring my receivables?
You can use the additional cash to meet payroll, satisfy operating costs, purchase needed supplies or equipment or just establish good credit for future expansion.
Factoring and Your Customers
Will my customers think I’m in financial difficulty if they find out I’m factoring?
Definitely not! Factoring is a viable financing option for many businesses and has been around for many centuries. As long as it is handled in a professional manner, your clients will understand you’re doing what’s necessary to create cash flow for your business. We work with over 35,000 companies that are accustomed to dealing with factors.
If my customers know that their invoices are factored, will they take longer to pay them?
No. More often than not, it’s just the opposite. If your customer is a large corporation with its own invoice-payment policy, it will make no difference who the creditor is. If your customer is a smaller company, they will be inclined to pay faster knowing that we, as a Factor, are a prime reporter of credit information and an influential credit-reference resource.
How will my customers know where to send the payment?
When you factor with Apex, we send a notification letter to your customers identifying us as your funding source and request that all payments be sent to us. We spend a considerable amount of time verifying receipt of this letter. In addition, every invoice is audited before we send it out to your customer, so we will be sure that each invoice includes Apex’s address for payment.
The Factoring Process
What type of businesses does Apex factor?
Apex only factors for the trucking industry. Because we specialize in factoring for trucking, we provide the tools you need to effectively compete in the industry.
How long does the factoring process take?
Upon receiving your company information, we will conduct our due diligence and send you a proposal. If it’s accepted by you, we will then send you our complete set of factoring documents. Initial funding can take anywhere from 24 hours to a couple of days. It will all depend on how fast you get documents and signed agreements to us.
What other services are provided by Apex?
- Professional collections – Apex collects from your customers in a professional and courteous manner. Because of our long history in the trucking industry, we have valuable relationships with many of the people you already haul for, making the whole process seamless.
- Credit Checks – We have the most reliable and accurate credit check system of any factor. We use world renowned credit check systems to ensure you’re doing business with companies that pay on time, every time.
- Personal Account Executive – Once your application has been approved, you are assigned a personal account executive to guide you along the way. If you need a last minute credit check or a payout of your reserve, your account executive will be there for you. They are knowledgeable in the industry and can provide you with strong support for your factoring needs.
- Reporting – At Apex, we fully disclose all account activity and provide full accounting procedures on your account. Reports include: invoice aging, reserve account, payment history, purchase and advance, credit lines, and personal account management.
- 24/7 Online Account Access – You may log into your account at any time to run credit checks, run reports on the status of your account, check funding status, find information about each debtor, invoice, and payment.
- Fast Funding – As sales increase, more cash becomes available for you to use, which allows you to constantly meet demand. Get funded in 24 hours.
- Technology – We are constantly upgrading our systems to provide you faster, efficient, and more reliable services.
- Freight Bill Auditing – Each time an invoice is submitted we audit the invoice for accuracy and all payment information.
Does Apex require additional collateral when my company is factoring?
Never. We only require a first position on accounts receivable. Many factors require an additional security interest in other assets of your company. Watch out for this.
Do I need to factor all my invoices?
No. You decide which invoices you want to submit for factoring to help successfully manage your financial needs. To avoid payment confusion, we do require you to factor all invoices of any particular shipper/broker if you decide to factor any invoice of that customer.
How long must I factor my invoices?
With Apex, you don’t have to sign a long-term contract. It is not required in order to factor with Apex.
Who is responsible for collections?
We have a very professional team of collectors to do this for you. We take care of this for you at no charge, so you can pursue the growth of your business.
How will I know the status of my factored invoices?
We have just upgraded our online account management system. The new system allows you to securely access your complete account history in real-time, via the Internet, 24/7. You may view all aspects of your account including, but not limited to: invoice aging, reserve account, payment history, purchase and advance, concentration, and many more.
What reports does Apex provide?
Below is a list of the available reports. Some may be sent to you automatically via fax or email.
Automated Reports:
- Purchase and Advance
- Reserve Report
- Payment History
- Debtor Aging
- Debtor Concentration
