Factoring is an alternative solution to conventional working capital financing. California Bank & Trust provides this flexible source of funding[cite::111::cite] to provide available capital for growing or transitioning businesses, often as a bridge to conventional bank financing. The factor purchases eligible invoices from a completed service or accepted product and essentially transfers the credit risk from the client to the client’s customer.

How it works

• Invoice issued by client to customer
  
• Invoice is sold to Bank
• Cash is used by client for growth, payroll, and/or other expenses
• Invoice pays through client's lockbox
• Bank receives payment
• Client receives reserve amount less fees

When it Works

In certain business situations, a more aggressive source of working capital financing may be a viable solution but also may be difficult to find. We look at the following challenges as opportunities to explore creative funding solutions for our customers and prospects:

• Newly formed, early stage
• High-growth
• Seasonality
• Acquisitions
• New large orders
• Owners with limited net worth and/or damaged credit
• High debt or inadequate company net worth
• Highly-leveraged
• Leveraged or management buyouts
• Turnaround or restructure
• Unhappy with existing factoring or asset based lending relationship
• Payroll tax issues or liens
• Bankruptcy (DIP)
• Non-compliance with required loan covenants
• Inadequate existing revolving loan facility
• Loan facilities anticipating decline
• Concentration
• Inadequate advance rate

Business Credit Advantage

• More than 100 years of combined business credit experience
• Same day funding for qualified clients
• Unlike independent Business Credit providers, your funds are federally insured
• Our low cost of capital allows for competitive client pricing
• Flexible program compared to big bank structures
• Advance rates up to 95% of the invoice amount
• No exit fees with 60-day notice and no long-term commitments
• Bridge financing that potentially leads to a traditional bank facility

Industries Served

• Manufacturing Industry
• Staffing
• Service Companies
• Trucking
• Energy
• Manufacturing
• Wholesalers / Distributors
• Government Contractors

For a list of commonly asked questions about Factoring, see our Factoring FAQs.