If you’re new to the concept of factoring for your Texas business, you may be a bit overwhelmed or even confused. Factoring is a straightforward financial tool to help your company with cash flow problems. Factoring firms like JOBE Services, Inc. use specific terms when talking about factoring, and we want you the know what we’re talking about. Much of the terminology is standard to the financial world, but here are some definitions to help you learn more.

1. Factoring – This is a financial tool where a business sells its outstanding invoices to a factoring company for cash. The factoring company pays the business minus a fee and then collects the invoice payment from the business’ client.
2. Recourse Factoring – With this method of factoring, the business is responsible for paying the factoring firm if the debtor’s invoice is not paid in full in the allotted time.
3. Non-Recourse Factoring – This factoring method is more secure for your business. If your creditor does not pay the factoring firm in the allotted time, you still owe nothing.
4. Accounts Payable – This is money your company owes to its creditors, for goods and services, utilities, and other debts.
5. Accounts Receivable – This is what companies love – money they are owed in exchange for their goods and services provided to clients.
6. Accounts Receivable Factoring – This is another name used for factoring.
7. Accounts Receivable Financing – This is another term sometimes used for factoring.
8. Assignment – This term is used in factoring to describe the invoice you sold to the factoring firm. You “assigned” this invoice to the factoring firm in exchange for faster payment.
9. Cash Flow – This is the money moving through your business. It covers income earned and paid, and debts you pay out. You always want more coming in and less going out.
10. Credit Approval – This is the check by a factoring firm to determine if your company is a good enough risk for a factoring agreement.
11. Factoring Fee – This is the fee subtracted from an assigned invoice and kept by the factoring firm for their services.
12. Invoice – This is your bill for services rendered that you give to clients.
13. Minimum Volume – Some factoring firms require clients to factor a minimum or fixed amount in invoices for each transaction or in a calendar year. This is called minimum volume.
14. Net Terms – These are the payment terms on your company’s invoices. Many service companies have delayed payment terms of 15, 30 or even 90 days.
15. Spot Factoring – This term means only factoring a single invoice, or invoices for a single client, as opposed to comprehensive factoring for all your clients.

No-Gimmicks, Non-Recourse Factoring You Can Trust

JOBE Services, Inc. not only wants you to understand these important terms, but we also want you to know you can trust us completely. You can expect:

• Non-recourse factoring
• No credit checks (we rely on the good credit of your clients)
• No hidden terms or fees
• No long-term contracts
• No minimum volume

Use factoring the right way to help your Texas business. Contact JOBE Services, Inc. today, and let’s talk about how factoring can improve your cash flow.