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  • Factoring

    Our primary form of providing financing services to small to medium sized businesses is through the purchase of accounts receivable assigned by our clients for their customers, otherwise known as Factoring.  In a typical factoring relationship, the client effectively outsources the management of their accounts receivable and protects against credit losses. In the role of factor, Continental acts as its client’s credit, collections and accounts receivable departments by conducting credit analyses, setting limits on credit exposure, collecting accounts receivable and recording accounts receivable transactions. By “approving” a particular account receivable, Continental agrees to absorb potential credit losses on that account.

    But a factoring relationship with Continental enables receivables turn much faster and cash is applied daily. Bookkeeping is always current and accurate, and approved credits relieve the financial burden of questionable receivables. With Continental as a partner, clients are often able to sell to customers that they might not consider selling to on their own.

    In connection with our Factoring services, we also make working capital advances available to our clients prior to collection of the factored receivables and charge interest on such advances, which is in addition to the factoring fees mentioned above.  These advances are secured by the factored receivables and other assets of the client, such as inventory and equipment, and are repaid from the collections that we receive from the purchased receivables.

    A factoring relationship involves four key elements

    • Credit Approval/Protection: In the event that a customer whose credit has been approved is unable to pay its bills, Continental is responsible for payment to the client.
    • Collections: Continental follows up late payments and provides clients with notification of claims and allowances. Payment of accounts receivable is made directly to Continental.
    • Bookkeeping: Continental tracks all invoices on our system, recording sales, cash payments and credits.
    • Payment Arrangements:
    • Advance: This is essentially a line of credit secured by receivables. Continental advances funds against eligible accounts receivable before receiving payment, up to a specified percentage of receivables.
    • Collection: Continental deposits funds into the client’s account as receivables are collected.

    For factoring arrangements, Continental charges a commission based on an agreed-to percentage of gross sales volume. In the case of advance arrangements, interest is charged on the daily balance of the advances outstanding.

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    Contact Continental Business Credit

    “Loans made or arranged pursuant to a California Financing Law license.”

    15303 Ventura Blvd., Suite 1000
    Sherman Oaks, CA 91403
    Phone: (818) 737-3700

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