What is Factoring Reserve?

The first payment to your company, the Factoring Advance, is typically 80-90% of the invoice value and is made once the invoice is received and verified. As stated above, our goal at ECapital is to verify and fund the same day as invoice receipt (if before 10 am with a wire transfer to you by 4 pm). The remaining 10-20% is held in reserve (The Factoring Reserve) until the invoice is paid. Once the invoice is fully paid, the Factoring Reserve is rebated, less any Factoring Discount Fee.

Audio Definition/Pronunciation

OTHER TERMS BEGINNING WITH "F"

  • Factoring

    Invoice Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (invoices) to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to…

  • Factoring Advance

    A cash advance to a Client (usually by wire transfer or ACH) for 80-90% of the value of the purchased and verified Invoice. Our goal at ECapital is to verify and fund the same day as invoice receipt (if before…

  • Factoring Company

    A factoring company is a financial institution which buys the accounts receivables of your businesses. The factor can buy your invoices taking the credit risk on a non-recourse basis. A factoring company can also offer you other services including risk…

  • Factoring Discount Fee or Factoring Rate

    The Factoring Discount Fee or Factoring Rate is the cost to you for Invoice Factoring, A/R Management, and Credit Protection from ECapital. It is typically based on your monthly volume and creditworthiness of your Customers (the Account Debtors) and can…

  • Factoring Receivables

    Factoring Receivables is a type of financing where a business will sell its good invoices to a factoring company. Invoices can be sold on a recourse or non-recourse basis. Factoring Receivables is not bad debt collection.

  • Federal Acquisition Regulations (FAR)

    The Federal Acquisition Regulations (FAR) is a substantial and complex set of rules defining the federal government's purchasing process with suppliers. Selling to the government can be a great way to grow your small business, but it can be intimidating.…

  • Financial Statements

    The Financial Statements are the Income or Profit & Loss Statement and Balance Sheet of a company, which report the company’s sales, expenses, and profit (income statement) and its assets, liabilities and net worth (balance sheet). Financial statements can be…

  • Financing

    Finance is an all-encompassing term dealing with the allocation of assets and liabilities. It can describe the management of large dollar amounts by governments or Fortune 1000 companies. It can also describe the small business using invoice factoring or getting…

  • FinTech

    The term FinTech represents the emerging financial technology industry composed of companies using new technology and innovation to improve the delivery of financial services.

  • Fixed Interest Rate

    A fixed interest rate is when a rate of interest for a loan does not fluctuate and remains the same throughout the term of the loan.

  • Fraud

    Fraud can be any number of dishonest practices whereby a client and/or Account Debtor attempts to defraud a factoring company.

  • Free on Board (FOB)

    FOB is an acronym for "free on board". In the US FOB is commonly used when shipping goods to indicate who pays loading and transportation costs, and/or the point at which the responsibility of the goods transfers from shipper to…