the factoring process
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The document outlines the steps in the factoring process for Transfac Capital to fund a business: 1. The business submits an application providing information about the company and financing needs. 2. Transfac issues a Letter of Intent with proposed terms and pricing subject to due diligence. 3. Underwriting reviews application materials and conducts credit and background checks, taking 1-7 days. 4. The underwriter issues contracts for the business to review and sign.
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This document provides information on factoring and forfaiting. It defines factoring as the purchase of accounts receivables by a factoring company, which provides financing, debt collection services, and protects against bad debts. Forfaiting involves the outright sale of receivables to a forfaiter at a discounted price without recourse to the seller. The key differences between the two are that factoring is for ongoing arrangements, provides various services, and has no minimum transaction size, while forfaiting is for single transactions over $250k and only provides discounted financing without recourse.
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the factoring process
- 1. The steps in factoring Below is a quick over view of what the process is for transfac capital to fund your involves. These steps cover from application to initial rst funding. for more detailed information ask your business development ocer. The application serves two purposes. It provides us with information we need to understand your company and its nancing need, and it provides us with information we will need later as we draft documents and prepare to fund. After receiving and reviewing your application, we will issue a proposal, or Letter of Intent. The “LOI” includes important terms and pricing that Transfac is willing to oer, subject to due diligence. If you have any questions about the LOI, contact your sales representative. Underwriting is the process that includes a review of all of the application materials as well as some credit and background reporting. Shortly after signing the LOI, your sales rep will introduce you to a member of the Transfac underwriting sta. The process of underwriting can take anywhere from just a few days to a week or longer, depending on your company’s circumstances. In your introductory call with the underwriter, you will be given an overview of the process and an estimate of the time it will take to complete the due diligence phase. The underwriter will prepare and issue the Purchase and Sale Agreement, which is the factoring agreement, plus related side agreements like the personal guaranty. Take time to read these documents carefully and refer any questions you may have to the Underwriter. Transfac issues documents early in the process to give you time to familiarize yourself with the agreements before signing. After you have signed and returned the contracts and Underwriting has completed due diligence, the nal step is Verication of your accounts. Transfac’s operation sta will review all of your outstanding invoices and will contact your accounts to assure acceptance and validity of the billing. At this time, your customers will be notied of the pending arrangement with Transfac, and they will be advised to change their remit to address to the Transfac address. Just before your rst funding, or at your convenience shortly thereafter, you will be introduced to your Transfac Account Manager who will orient you to our process and reporting. You will learn how to submit sales and receive advances on a regular, ongoing basis. Your Application The Letter of Intent Underwriting and Due Diligence Contract Review Verication and First Funding Orientation Mike Schepper | Business development Officer | PH. 888.333.5173 | C. 801.512.7117 | mikes@transfaccapital.com | www.texasoilfieldfinancing.com