Factoring in Syracuse, NY

- About Syracuse
- Factoring Information
- How Does It Work?
- Factoring Terms Glossary

About Syracuse, NY

Syracuse is a city in Central New York, USA. According to the 2000 census, the city population was 147,306, and its metropolitan area had a population of 732,117. It is the county seat of Onondaga County and the economic and educational hub of Central New York, a region with over a million inhabitants. Syracuse is also well provided with convention sites, with a downtown convention complex and the Empire Expo Center directly west of the city, which hosts the annual Great New York State Fair. Syracuse was named after the original Syracuse, a city on the eastern coast of Sicily, Italy, with which it shares some similarities, including a formerly important salt industry and a neighboring town of Salina.

The city has functioned as a major crossroads over the last two centuries, first between the Erie Canal and its branch canals, then of the railway network. Today, Syracuse is located by the intersection of Upstate New York's two major interstate highways, and its airport is the largest in the region.

Syracuse is the home of Syracuse University, a major research university, as well as several smaller colleges and professional schools.

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Factoring Information

Factoring is often used synonymously with accounts receivable financing. Factoring is a form of commercial finance whereby a business sells its accounts receivable (in the form of invoices) at a discount. Effectively, the business is no longer dependent on the conversion of accounts receivable to cash from the actual payment from their customers, which takes place on typical 30 to 90 day terms. Businesses benefit from the acceleration of cash flow by obtaining cash from the factor equal to the face value of the sold accounts receivable, less a factor's fee.

Factoring is considered off balance sheet financing in that it is not a form of debt or a form of equity. This fact makes factoring more attainable than traditional bank and equity financing.

There are usually three parties involved when an invoice is factored:

• Seller of the product or service who originates the invoice.
• Debtor is the customer of the seller (i.e., the recipient of the invoice for services
  rendered who promises to pay the balance within the agreed payment terms).
• Factor (SL Business Capital Corporation)

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How Does It Work?

The initial step is for your company to complete a simple application and supply some requested documentation.  Once the application and all documents are received, “due diligence” as to the credit worthiness of your customers will take just a few days to complete for application approval.  Once your factoring account is open cash advances against valid outstanding commercial invoices are wired to your company within 24 to 48 hours on a regular basis upon your instruction. Working capital is then in your hands ready to apply as needed.

Your cash advance against each invoice will consist of 80 - 90% of the invoice face amount.  The remaining portion of the invoice is retained by the factor and is called a “reserve”. You will later receive the reserve once your customer has paid the invoice in full.  The factor deducts a small discount fee from the reserve.  The amount of cash advance and discount are directly related to your monthly sales volume and the credit standing of your customers (not your credit standing). The discount is also based on various risk factors such as the length of time your customer takes to pay the invoice in full.  You may certainly discuss the aspects of the factoring process with our associates. 

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Factoring Terms Glossary

Factoring has its own specialized jargon -- commonly used terms that are unfamiliar to people outside the industry. To put you on the inside track, we have included a glossary of some of the most commonly used terms and abbreviations.

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