The Policies (List of FAQs)

Q: What is Factoring?

A: Factoring is the purchase of accounts receivable (your invoices) for immediate cash. It is an alternate way to obtain financing that provides billions of dollars to various industries each year. You probably haven’t heard of Factoring because until recently only larger corporations have employed Factoring. Factoring is like accepting credit cards from your customers. The credit card company (Fairbanx) pays you at the point of sale and then waits to collect from your customers. It’s that simple. Click here to see how factoring works.

Q: Do you buy our accounts receivable (invoices)?

A: Yes, that is exactly what we do. In effect, you sell your right to payment by the respective customer.

Q: Why should I factor my receivables?

A: To figure out whether you should factor your receivables, answer the following questions.

• Do you need financing and the bank has said no?
• Have you outgrown your Line of Credit?
• If your customers paid you quickly, could you run your business more efficiently?
• Are you “Financing” your customers by carrying their accounts for 30 to 90 days or more?
• Is your business growing faster than your operating capital?
• Have slow-paying customers got you in a cash flow crunch?
• Would your sales improve if you could stop worrying about cash flow?
• Could you take your business to the next level if you did not have to lock your cash in Accounts Receivable?
• Would you like to turn your business into a Cash-On-Delivery business, rather than waiting for customers to pay?
• Isn’t it time you started working with your money instead of waiting for it?
• Are you tired of chasing customers for payment?
• Do you want to take advantage of suppliers’ cash discounts?
• Are you facing a cash flow bottleneck?
• Could you take advantage of bulk purchases if you had the cash?

If you answered, “yes” to one or more of these questions then you would probably benefit from factoring your receivables.

Q: Do we have to sell all our future receivables to Fairbanx?

A: No, sell as many or as few invoices as you like.

Q: Can we continue to bill our customers as before?

A: Yes, you will continue to bill normally.

Q: Does Fairbanx require a long-term contract?

A: No, Factor your Accounts Receivable for as long as you need.

Q: Can we qualify with a history of credit problems such as bankruptcy or judgments?

A: Yes, as long as your customers are of good credit standing.

Q: Can we qualify if we already have existing credit lines?

A: Yes, we compliment and work in cooperation with your existing lenders to enable you to access larger amounts of funding.

Q: Can we qualify even if we are just starting in business and have no credit history?

A: Yes, as long as knowledgeable and experienced people are managing your business.

Q: How much does it cost?

A: Factoring fees will vary depending on your sales volume and the number and credit strength of your customers. At Fairbanx, our monthly discount fee ranges from 2.5% to 3%. Factoring costs are often offset by the increase in trade discounts and by increased volume of sales. See What are the Costs & Benefits of Factoring.

Q: Does Fairbanx charge extra for collection, late notices, credit investigation and other management services it provides?

A: No, our pre-determined Factoring fee is an all-inclusive charge.

Q: When does Fairbanx make money?

A: We earn our fee when your customer pays.

Q: What type of accounts receivables does Fairbanx buy?

A: We buy any valid receivable for a service performed or a product delivered to a creditworthy business or governmental entity. We reserve the right to accept or reject any invoice.

Q: What is the smallest account you will accept?

A: We are flexible and would favourably consider smaller accounts.

Q: What is the largest account you will accept?

A: There is no upper limit.

Q: How long does it take to check the credit standing of our customers?

A: If the account can be found on our computer files, it would be a matter of minutes, otherwise it would take one or two days.

Q: Are there any geographical restrictions?

A: We will buy invoices of any creditworthy business or government agency in Canada, USA, and other selected countries.

Q: Does Fairbanx have an aging preference?

A: Fairbanx normally buys current invoices. However, we will consider aged invoices on a case-by-case basis.

Q: How do you collect?

A: You will authorize your customers to direct their payments to our address.

Q: What happens if one of our customers does not pay?

A: The risk of non-payment is not altered when you use Fairbanx.

Q: How does Fairbanx handle collections?

A: We recognize that our business can grow only if yours does. Therefore, we treat your customers exactly as if they were our customers. No collection call is made unless approved and coordinated by you.

Q: How do I get started?

A: Click here to find out.