Frequently Asked Questions About IFG
Q. What types of companies does IFG help?
A. IFG helps companies:
- With expected annual sales between $200,000 and $10,000,000.
- That sell to other businesses or government entities (not consumers).
- That are not being paid quickly enough by its customers and needs cash to support its growth.
A. We will consider funding any business that has sales to and generates accounts receivables from other businesses and from governmental authorities. We provide business funding to manufacturers, distributors, importers, exporters and service providers in almost every industry. We are among the few companies that fund progress payments owed to construction industry subcontractors. To view some recent transactions, click here.
Q. How is IFG different from a bank?
A. IFG is different from a bank in that IFG looks at companies with:
- Weak balance sheets or financial ratios.
- Little operating history.
- Tax liens or owners with previous bankruptcies.
Q. What types of accounts receivable does IFG buy? Is IFG a collection agency?
A. We factor current accounts receivable and not past due receivables. We will consider factoring any type of commercial accounts receivable, that is, any type of B-to-B receivable generated by the sale of goods and/or services to other businesses. We will also consider spot factoring government receivables generated by the sale of goods and/or services to a governmental authority. We generally do not acquire consumer receivables or payment obligations of insurance companies under insurance policies.
Q. How quickly can I receive funding?
A. With your cooperation in the application and due diligence processes, we can complete an initial funding transaction in as little as five business days from the time of your first communication with us. Subsequent funding transactions can be completed in less than 48 hours.
Q. Can I be selective in the invoices I sell?
A. Yes. We do not expect to buy 100% of your accounts receivable portfolio. Our service is a use it as you need it program, placing you in control of your financing costs.
Q. Can I sell you just one invoice?
A. Yes. Our solution involves no long term commitments or recurring monthly minimum invoice discounting volume requirements. You sell us accounts receivable only when you need cash. You do not have to sell us a minimum amount of receivables each month or sell us receivables every month for a one or two-year period. If you need only a one-time funding, we can provide it.
Q. What percentage of my gross invoice amount will IFG fund?
A. Differing invoice payment terms and differing credit risk profiles of your customers (the account debtors) may impact the percentage of the gross invoice amount that we will fund. Generally, our funding percentage is between 80% and 90% of gross invoice amount. Upon the payment in full of an invoice that we purchase, we pay the remainder of the invoice to you, minus our fee.
Q. How much will IFG's service cost me?
A. Each client's circumstances will vary and may have an impact on our pricing. In general, our discount rates (from the gross invoice amount) range from 2% to 7%, depending on the number of days the invoice is actually outstanding.
Q. Am I liable if the account debtor does not pay the invoice I sold IFG?
A. Generally, you will have to exchange one or more other invoices with a substantially similar aggregate gross invoice amount for the defaulted invoice or pay the gross invoice amount of the defaulted invoice directly to IFG.
Q. What is the difference between traditional "factoring" and IFG's "Invoice Discounting" service?
A. There are four major differences between factoring and invoice discounting:
- First, invoice discounting is non-binding. Factoring usually contains large termination fees that lock the client into using one factoring company for at least a year. With invoice discounting, the client uses IFG only when they need cash and can exit the relationship at any time.
- Invoice discounting has no monthly minimums whereas factoring companies usually require at least $25,000 a month.
- Invoice discounting has no hidden fees. Factors often require upfront application fees and a minimum charge per invoice. IFG has no minimum charge and bases its fees on how many days the invoice is outstanding, whether it be 1 day or 60.
- Invoice discounting is flexible. Factoring arrangements typically require a company to sell invoices at a predetermined up-front amount (80% for example). Invoice discounting allows a company to only receive the amount of cash that is needed (20%-90%), so they are not paying for funds they do not need.