ACCOUNTS RECEIVABLE FUNDING
The process of transacting accounts receivable in the secondary market or Accounts Receivable Funding is called factoring .
Factoring is the purchase of accounts receivable from a business at a discount. Factoring allows businesses to collect the money they are owed immediately by accepting a discounted (reduced) amount of the invoice from a third party.
In a factoring transaction, a business sells one or more invoices to a factor.
A factor is a funding source that specializes in funding accounts receivable.
When a Business Factors an Invoice, the Process Occurs as Follows:
» The factor advances a certain percentage of the invoice amount to the business.
» The factor also holds a percentage of the invoice amount on paper as a reserve
» The factor assumes the right to receive payment on the invoice.
» The business' customer submits payments directly to the factor.
» The factor rebates the business the reserve amount upon receipt of payment.
All of which will allow your business to:
» Meet payroll, including paying payroll taxes on a timely basis.
» Pay past due bills or other current obligations.
» Take trade discounts or take advantage of purchasing in larger quantities.
ASSET-BASED LENDING
Asset-based Credit Line
An asset-based credit line is a revolving line of credit collateralized by the assets of a business. Those assets include accounts receivable, inventory, machinery and equipment and real estate.
When a business receives an asset-based line of credit, the amount of credit available to the business fluctuates based on a percentage of its current assets.
For example, as inventory is sold in the normal course of business, the proceeds from these sales go to repay the line. The amount of the collateral changes daily, so the asset-based lender must monitor the value of its client's collateral continuously and adjust the amount of the outstanding loan accordingly. This is also known as formula lending.
An asset-based credit line is structured as a loan, not as a purchase; therefore, providing this type of credit facility is called asset-based lending.
Equipment Leasing
Equipment is valuable to a business because of what it produces, not simply its ownership. Just as a business "rents" its employees, i.e., office workers, warehouse personnel, etc., either via paying them a salary or using an employment service, it is never paid for in one lump sum - one year's salary for instance.
In the same manner, why should a business pay in advance for the services provided by machinery and equipment. Why not match the out of pocket expense to the incoming cash flow generated by the business.
The Greenhill Group,LLC possesses significant expertise and financial resources to structure financing solutions required to finance diverse business situations. We offer floating rate asset based and senior stretch credit facilities to middle market companies with annual revenue between $5 and $300 million for general working capital purposes and in connection with acquisitions, refinancings and recapitalizations. We combine our speed, knowledge, flexibility and financial strength to provide our clients with reliable and sophisticated financing solutions.
LOAN SIZE
$10MM to $100MM+
ADVANCE RATE
• Up to 85% of eligible receivable
• Up to 90% of OLV of eligible inventory
• Various for other asset classes
BUSINESSES
The Greenhill Group will review opportunities for a broad range of companies, but focuses on the following industries for this particular product:
• Consumer Products and Services
• Business Services
• Value Added Manufacturing
• Industrial Manufacturing
• Distribution
LOCATION
United States and Canada
PRICING
Competitive rates and fees adjusted for risk and financial performance
STRUCTURE
• Asset Based Revolving Credit Facilities
• Senior Stretch Credit Facilities
• Term Loans
TERM
1-5 years with extensions available
TRANSACTION TYPES
• Acquisitions
• Growth Financings
• Refinancings
• Comprehensive Debt Restructurings
• Working Capital Facilities
• Debtor-in-Possession and Exit Financings
• Special Situations Financings
Money fuels business. When cash flow stalls, it compromises your ability to run your company. How many times have you put aside bills, lost sleep over payroll, or couldn’t pay suppliers when they asked for payment? There is a time during each month, for all growing businesses, when outstanding receivables are keeping you grounded. If only you could get paid today on work you completed, your business would take off. This is why you need the Paragon Factor.
Paragon serves as your cash flow engine. The process is called “factoring”, and in the simplest terms, it means the Greenhill Group advances you up to 90% of the invoice amount immediately, and gives the remaining balance when your clients settle in full. Invoices can be submitted for factoring directly upon completion of work or product delivery. Revenue flows directly and instantly to you. No delays. No collection hassles. We can often assume all credit risk and responsibility for client payment. In return, Paragon receives a small fee at the end of the process. Set-up time can be as little as 2 or 3 business days and you’re not locked into a long-term contract. Paragon allows you the flexibility to factor only when you need it, and as often as you like. We base our approval decisions on your customers ability to pay, and not the credit of your young, growing business.
The Paragon Factor gives you the power to make things happen now.
» Improve Cash Flow Without Additional Debt
» Customer Credit Services
» Accounts Receivable Management
» Flexibility
» Win More Business-Get Supplier Discounts
