Many industries rely on factoring

as part of their financial strategy,

including:

• Textiles

• Electronics

• Gift Ware

• Toys

• Garments

• Fashion Accessories

• Shoes

• Costume Jewelry

• Service Industries

Factoring can help any company

protect against customer credit

losses, enhance collection efforts,

and improve borrowing power. Our

financial strength and flexibility,

combined with the highest level of

service, enables Middlegate to

respond to your needs and assist you

in achieving your financial goals.

F A C T O R I N G  1 0 1 . A  Q U I C K  S U M M A RY

 

How does factoring work?

 

Step 1: When a client enters a factoring relationship with Middlegate Factors, we establish pre-approved lines of credit for the client’s customers. Most orders submitted electronically for these customers will be answered immediately.

 

Step 2: The client ships the approved orders to its customers and bills them, indicating on the invoices that payments are due to Middlegate Factors.

 

Step 3: At invoice maturity, Middlegate Factors collects from the customer and credits the client’s account. Middlegate Factors fully manages the receivables including the lock box, cash application and collection of past due accounts. Customer deductions or disputes over delivery terms or product are immediately reported to the client. Middlegate Factors maintains the accounts receivable ledgers and prepares timely financial reports to the client.

 

Step 4: In the event a customer defaults and is deemed financially unable to pay its debts, Middlegate Factors pays the client 100% of the value of the approved invoice.

 

Step 5: As needed, Middlegate Factors will provide clients with cash advances prior to the maturity date of the invoices. This allows the client to be paid upon shipment while actually offering credit terms to its customers. Typical advance rates are up to ((90%)) of the value of the invoice. These advances are subsequently repaid by collection proceeds from their customers.

A D D  F I N A N C I A L  F L E X I B I L I T Y

 

Factoring enables your company to focus on production and sales instead of collecting receivables. If you are ready to minimize concerns about the credit-worthiness of customers, time spent on collections, bad debts, and logjams in your cash flow, factoring may be the answer. If your plans require a reduction in operating expenses, increase in working capital, and improved management information, then factoring might be a strategic fit for you.

 

Factoring adds a level of financial flexibility so your company can pursue opportunities as they arise, independent of cash flow cycles. A lifeline for manufacturers, importers, jobbers, converters, service industries, and start-ups, factoring is used by many kinds of companies. Businesses that are seasonal, growing rapidly, undercapitalized, have a lengthy manufacturing cycle, or are strained by slow turnover of receivables, including high bad debt losses would greatly benefit from a factoring program.