Question 1

What is factoring?

Accepted Answer

Factoring is a type of financing that helps businesses increase cash flow due to slow-paying clients. Normal clients take 30, 60, 90 or more days for traditional payment terms, you can’t always control the way cash flows in and out of your business creating money problems. Selling accounts receivables (financing invoices) gives you immediate cash that can be used to pay current and important expenses like payroll, suppliers, vendors, repairs.
 
Most transactions follow these steps:
 
1. Your company delivers the goods/services to the client
2. You submit an invoice for financing
3. The factoring company advances 85% of the invoice (this amount varies)
4. Your client pays depending on the time terms
5. The factoring company issues a rebate of 15%, less the service fee

Question 2

What are accounts receivables?

Accepted Answer

Accounts receivable refers to any outstanding invoices for products or services that you provide to your customers on credit.

Question 3

Why is factoring necessary?

Accepted Answer

Factoring helps you manage your company’s financial obligations and operating expenses. With the cash in hand, you can keep suppliers and employees satisfied with on-time payments. Since factoring also allows companies to bring in money without taking on new debt, it can be an excellent solution if you do not qualify for a loan.

Question 4

Benefits of Factoring

Accepted Answer

- The capacity to develop deals without being restricted by existing capital 
 
- Allows organizations to grow and develop without increased bank obligation 
 
- Guarantees deliveries to customers with the right Cash Flow in hand 
 
- Increase market share
 
- Allows organizations to make higher profits by fulfilling larger orders
 
- Flexible, and fast financing

Question 5

Difference between a traditional bank loan and factoring?

Accepted Answer

A traditional business loan is a withdrawal from a bank  where the business incurs debt and you’re required to have a collateral. On the other hand, factoring is a transaction in which the company is selling unpaid invoices and focuses on the financial strength of the company’s buyers/clients.

Question 6

Do I need a collateral asset?

Accepted Answer

Factoring companies require that you have clients account receivables to secure the funding.  For this financial service, you don’t need any assets like inventory or real estate to back up the purchase of the invoices. The factor makes a UCC under the name of their client.

Question 7

What is a UCC?

Accepted Answer

UCC’s (Uniform Commercial Code) applications are legal forms that a creditor (factor) submits to give notice that it has an interest in the business property of a debtor.

Question 8

How quickly does CIMA make funding decisions?

Accepted Answer

Once invoice is accepted by your client, funding can be made 24 hours or less. With immediate cash,  you can speed up your growth strategy and reach your goals.

Question 9

What kind of invoices can I submit?

Accepted Answer

1. The product/service must be delivered and accepted by your client
2. You are a business not a person
3. Your client is a business not a person
4. Your client is based in the U.S. or Latin America (English and Spanish speakers)

Question 10

What industries does CIMA work with?

Accepted Answer

CIMA Group works with a variety of industries such as wholesale trade and distribution, manufacturing, IT services and technology, healthcare, construction and  hardware, and oil and gas.

Question 11

What happens if my customer does not pay?

Accepted Answer

If your client does not pay the invoices, you are still responsible for the outstanding balance with CIMA Group. You can self-pay the balance or make partial payments through our bank account and we will proceed in the adjustment of the balance within CIMA software.

Question 12

Are there termination fees if I want to leave?

Accepted Answer

There are no termination fees, as long as there is no an outstanding balance you can stop using our services whenever you want with no consequences.

Question 13

What are the benefits of using CIMA Group?

Accepted Answer

Flexibility: Fund only when you need. There are no minimum or maximum invoices to sell
Customer Service: Our team is readily available to help with any questions, issues, or concerns. In addition, we have English and Spanish speakers to assist you. 
Easy to work with: Our online software tool can be accessed from any device everywhere in the world

Question 14

Purchase Order Financing

Accepted Answer

Purchase Order (PO) Financing is a type of financing that allows a business to receive funding for a pre-ordered project using the purchase order from the client. Many times, businesses do not have the cash on hand that they need in order to purchase all of the materials necessary for a big order, nor can they obtain credit from a bank based on their credit history. By financing your purchase orders with a PO financing company, you will have the cash to fill new orders and grow your business.

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