You continue managing your customer relationships. To keep your line current, customer payments are directed to an account designated by your lender to pay down your balance. You draw back against your available line as you need it. It's a standard part of how asset-based facilities work, and it keeps your borrowing base and availability in sync.

Absolutely. That's exactly how we like to work. Many businesses start with factoring or payroll funding and move to an asset-based line as their revenue and balance sheet grow. Because we offer the full range, the transition is seamless, and you keep the same team that already knows your business.

Not like a traditional bank loan. We require a Fixed Charge Coverage Ratio (FCCR), or minimum Tangible Net Worth (TNW). We shape any covenants around your business, and strong borrowers often carry very few, if any.

Asset-based lending involves a bit more due diligence than factoring. Typically, ABL includes a pre-funding field exam and, in some cases, a third-party collateral appraisal. Once your facility is in place, you'll provide regular borrowing base reporting, typically weekly, so your available line stays current as your assets change. Our team guides you through every step.

Most commonly your accounts receivable, which carry the highest advance rates. Depending on your business, your borrowing base can also include inventory, machinery, equipment, and real estate. We'll help you identify which of your assets qualify and what they can unlock.

Asset-based lending (ABL) is designed for businesses with strong, steady revenue and solid financial reporting. If you've outgrown straight factoring and you're looking for a larger and more cost-efficient line, it's worth a conversation. Not quite there yet? Our invoice factoring and payroll funding solutions are a great place to start, and we'll help you graduate to ABL when the time is right.

With invoice factoring, also known as payroll funding in the staffing industry, you sell your receivables, we advance the cash, and then we collect payment directly from your customers. With asset-based lending, you keep your receivables and borrow against them (along with your inventory, equipment, and other eligible collateral) through a revolving line of credit without handing your accounts to a third party. Factoring is built for speed and flexibility, and ABL is built for established businesses that want a larger, lower-cost line and more control.

There are many reasons why a business would want to utilize invoice factoring such as: rapid growth, long drawn out payment terms from their customers, and demanding payroll. 

Payroll funding is a term used by working capital finance or accounts receivable factoring companies. The term specifically refers to providing the capital it takes to pay the employees of temporary staffing companies. The key benefit of using a payroll funding company to finance your temporary staffing company is making sure you can always fill the job orders from your clients. Your employees are always paid on time each payroll period even if your clients take 10 to 90 days to pay your invoices.

There are many reasons why a business would want to utilize invoice factoring such as: rapid growth, long drawn out payment terms from their customers, and demanding payroll.

The two main pieces of criteria you should think about before applying for invoice factoring are: Is the work you are invoicing for complete? Are my clients credit-worthy (if you're not sure, we can check for you!) Beyond that, there is a short application process so we can understand your business.

Factoring is a transaction where a business is selling its invoices to an invoice factoring company to gain access to the cash tied up in outstanding accounts receivables. The receivables are removed from your books and are added to the factoring company’s balance sheet at their fair value. The factoring company would be purchasing these accounts receivables at a discount rate. We then wait on your customers to pay the invoices, whether that is 30, 60 or 90 days later.

Meritus is always willing to work with our customers to have a fee structure that works great for all parties. The cost of invoice factoring depends on your unique situation, typically based on credit quality of the customers and the amount of invoices a business is looking to factor. Typically, the cost will be in the range of 0.3-0.63% of the invoice total each 10 days the invoice remains outstanding. As was mentioned initially, pricing is very much situation- dependent and we work out what is best for you.

An advance rate is how much of the invoice value you would be receiving up front from the factoring company. Typically this would be between 80-95%.

A lot of it comes down to you and how quickly you can get us the documentation we need. For invoice factoring, businesses can typically expect 7–14 days, but with our online application and easy eSigning, the process is faster than ever. With Meritus Capital, first funding can happen in as little as 3–7 days if everything goes smoothly.

‍

An asset-based line of credit takes a little longer to set up. By nature, ABL involves more moving parts, so there's additional due diligence up front, including a field exam and, where applicable, a collateral appraisal. That extra step is what allows us to build a larger, more flexible line around the full value of your assets, so it's time well spent for businesses ready for it.

Yes, we have provided factoring for many businesses right from their first invoice!

Simply visit the Get Funded page and start your application today!

Factoring companies do need a 1st position UCC filing on the accounts receivable of the business they are providing factoring for. That being said, there are many cases where agreements can be made between lenders to facilitate factoring even if you have some other type of financing. Speak with someone at Meritus Capital to discuss your situation and how we may work together.