FINC 330 Disc + HW ***ZEEK THE GEEK***

Violetta:

Firstly, author need to figure out what is factoring. Factoring is a complex of services including:

· unsecured accounts receivable financing requirements of wholesale deliveries, which are carried out on deferred payment terms;

· assessment and analysis of customer transmitted to the factoring services;

· insurance of risks of non-payment by customers;

· management of receivables company.

Secondly , there is an important question about factoring: Who needs factoring? Factoring services suited to companies working with its customers on deferred payment terms. This service is one of the major opportunities to support small and medium-sized businesses, because in this segment entrepreneurs can not always resort to traditional credit sources of funding which are offered the bank. Factoring is required for those companies who want to quickly get money to cover cash shortages, address current business challenges, increase turnover and so forth.

Thirdly, it is worth noting the steps of factoring.

· The seller interacts with the funding specialist/broker and explains the funding needs.

· The broker prepares a preliminary client prole form and submits to the appropriate funder for consideration. Once both parties agree that factoring is possible, the broker puts the seller in direct contact with the funder to ask/answer any additional questions and to negotiate a customized factoring agreement, which will meet the needs of all concerned.

· At this point, the seller may be asked to remit a fee with formal application to cover the legal research costs, which will be incurred during "due diligence". This is the process by which the buyer’s credit worthiness is evaluated through background checks, using national database services.

· During the next several days, the funder completes the "due diligence" process on the seller, further veries invoices and acknowledges any liens, UCC lings, judgments or other recorded encumbrances on the seller’s accounts receivables.

· The seller is advised of the facility and is asked to advise the buyers of the Factor by letter and submit an acknowledged copy of the same to the Factor for records.

· A detailed sanction letter is given to the seller and their acceptance on the same taken, with the required signatories. (Authorized signatories would be mentioned in the “Signing Authorities” section of the Proposal presented by seller). (Ramco.com, 2016)

Fourthly,  author must pay attention to the some benefits of factoring.

· Factoring turns your invoices into instant operating cash.

· Factoring improves your credit rating by giving you cash so you can pay your bills sooner.

· Factoring can help you meet your payroll and tax payment obligations.

· Factoring can increase your buying power by enabling you to take advantage of cash purchase discounts.

· Factoring can increase sales and marketing efforts.

· Winston Financial Group, Inc bases credit limits on your customers' creditworthiness, not yours.

· Winston Financial Group, Inc can assume many of your day-to-day administrative responsibilities so you can focus your attention on sales and production.

· Winston Financial Group, Inc provides you real-time online reports that help you manage your business more efficiently. (Winfin.com, 2016)

Finally,  With regard to the company's website, then there is a service "filling online application" to factoring. Where any company can receive financial assistance. Also, there is a tab "benefits of factoring." the author said about them above. The next tab "Why WFG?".  In this tab,  company tells about its advantages, so that is why the company has to apply to a factoring in Winston Financial Group, Inc. Also, there are other tabs with different information, everyone can see it on the company's website: https://www.winfin.com/onlineapplication.php

Nathan:

Hello Class,

On the website http://www.winfin.com/ it appears they break the process of factoring into three easy steps. The first step is the application. On this step you would fill in vital information broken down into three parts. The first part includes business information such as; Business name, business start date, city, state, phone number, federal ID number, for of organization, type of business, and website, number of employees; then they ask for more personal information including; name, social security number, title, and home address. The third part of the application phase asks about the advancement you would need; term of sales, amount of receivables now open, average invoice amount. Next you submit the invoice to be verified, and then you receive your advancement. They also allow you to cancel your advancement at anytime. Judging from the website factoring is using future receivable as credit to borrow money from a third party. The advertising on the homepage mentions; low rates, immediate cash for invoices, and good customer service. Then the first quote says “are your invoices stacking up while cash flow is going down? We can help by turning your invoices into immediate cash through our factoring service” This gives away what the business does to help other businesses.

Factoring can be a vital tool in operating business finance. Factoring is the process in which a company pays advancements to a business to fill in for the money they would receive from a previous transaction. This advancement is vital to businesses that successfully use the factoring process. The advancement allows the business to pay bills and expenses on time, without waiting for their customer to pay their invoices. (Lopez, 2011) describes the factoring process with a real-life practical example. There is a small business that has to make pay—roll in order to pay their employees on time. The client or in this case the small business gave the invoice to the factoring company, so they would receive the payment from the small business’s customer. Once the invoice is verified by the factoring company, an agreement is signed between the small business and the factoring company. Once the factoring company receives the payment they return the 15% that was held for collateral minus the 2.5% fee that was agreed upon prior to the arrangement. This creates a winning situation for everyone. The small business makes pay-roll so they and their employees are happy, the factoring company gets paid a fee so they are happy, and customer did not get rushed into paying their invoice so they are happy. Factoring is a very good tool to use.