Contract Financing

Contract Financing is an alternative solution designed to assist a small business owner in accelerating cash from future proceeds or fulfilling their contract and purchase order obligations. This highly specialized form of financing utilizes future contract proceeds as the basis for financing today.

Contract Financing, also known as factoring, is the purchase of receivables, at a discount, for immediate cash. Contract Financing is not a loan with interest due, but the purchase of an asset at a discounted rate from the asset's face value. Therefore, Contract Financing clients are not paying an interest rate as they would for a bank loan, but a discount (or "Factor Amount"), as they would if they were giving terms to a customer for early payment.

Q: How does Contract Financing work?
A: Once a small business has delivered a product or performed a service for another creditworthy company (their client), contact us prior to sending your invoice to your customer. We will confirm with your customer that the work has been completed or the goods delivered and accepted, we will advance up to 80% (up to 70% for the construction industry) of the face value of the invoice amount in cash. When your customer pays us, your will receive the balance less our discount.

Following is a diagram of how factoring typically works.

Q: How do I qualify?
A: We base our credit decision primarily on the strength of your customers, not you. It's easy to qualify if you meet the following criteria: Your customer must be another (creditworthy) business. Your invoice or receivable must be a valid one for goods sold and delivered or services rendered – to your customer's satisfaction. We will verify each invoice with your customer.

Q: What does it cost?
A: eCapital Finance provides Contract Financing at very competitive rates in the industry. We factor invoices and accounts receivables at fees in the range of 3-5% for each 30 day period. Invoices paid within 30 days receive 95-97% of the invoice total!

Apply Now! to find out more about how Contract Financing will work for you!