Fedfactor Llc

Contact us if we can be of assistance to your business. Factors make funds available, even when banks do not. We focus first on the credit worthiness of the debtor, the party who is obligated to pay the invoices. In contrast, the fundamental emphasis in a bank lending relationship is on the creditworthiness of the borrower. Factoring is a financial transaction whereby a business sells its accounts receivable (i.e, invoices) to a third party (called a factor) at a discount in exchange for immediate money. Factoring differs from a bank loan in three main ways. First, the emphasis is on the value of the receivables not the firm’s credit worthiness. Secondly, factoring is not a loan – it is the purchase of a financial asset (the receivable). Finally, a bank loan involves two parties whereas factoring involves three.