factoring vs abl, which one is right for you?
HOW DOES FACTORING WORK?
- Factoring is working capital financing provided through the discounted purchase of qualified accounts receivable, typically offered to rapidly growing companies or businesses transitioning financially.
- The factor purchases eligible invoices from a completed service, or accepted product, and essentially transfers the credit risk from the client to the client’s customer.
HOW DOES ASSET-BASED LENDING WORK?
- One single borrowing base including A/R, Inventory, and/or Machinery and Equipment
- Accounts Receivable – up to 85% of eligible A/R
- Inventory – up to 50% of eligible Inventory
- Machinery & Equipment – up to 75% of eligible Machinery & Equipment
BUSINESS CHALLENGES
- Newly formed, early stage
- High growth
- Acquisitions
- New large orders
- Owners with limited net worth and/or damaged credit
- Seasonal business
- High debt or inadequate company net worth
- Highly-leveraged
- Leveraged or management buyouts
- Concentration issues
- Inadequate advance rate
- Turnaround
- Restructure
- Unhappy with existing factoring or asset-based lending relationship
- Payroll tax issues or liens
- Non-compliance with required loan covenants
- Inadequate existing revolving loan facility
- Loan facilities anticipating decline
- Bankruptcy (DIP)
ADDITIONAL INFORMATION ABOUT REGENCY
- National based institutions providing same day funding for qualified clients
- Local decision making and approval
- Our low cost of capital allows for competitive client pricing
- Flexible program compared to big bank structures
- Advance rates from 75% to 95% of the invoice amount
- No exit fees with 60 day notice and no long-term commitments
- Bridge financing that potentially leads to a traditional bank facility
- We will connect you with a lender that is right for your needs
COMPANIES AND INDUSTRIES SERVICED
- Energy
- Oilfield Services
- Staffing
- Service Companies
- Trucking
- Manufacturing
- Wholesalers/Distributors
- Government Contractors
