What is Factoring?

Factoring is the sale of accounts receivable or invoices at a small discount to obtain immediate cash. Factoring gives businesses the ability to ensure growth without diluting equity or incurring debt. Factoring is one of the oldest forms of commercial finance and is used extensively both nationally and internationally. Factoring is NOT a loan. No money is loaned and no interest is paid or earned. Instead, the factor receives a fee for its services. Those fees are based on the dollar amount of the accounts receivable purchased.

Why Factoring?

A main difference between factoring and a bank loan is in factoring you use your customers’ credit strength not yours as support for funding versus a bank loan which is typically based on your assets, equity, profitability, cash flow and liquidity, thereby limiting the amount of funding. Under a factoring facility your available funding is virtually unlimited, which allows you to meet operating demand and provide for future expansion.

How Hennessey Can Help

The Hennessey Capital factoring solution allows businesses to leverage up to 100% of their accounts receivable with typical advance rates between 70 - 85%. It covers industry lines such as temporary staffing, manufacturing, distribution and transportation. Our pricing is based upon the credit strength of the debtor’s factored, collateral administration and financing volume.

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