Factoring

Kronos Capital factoring facilities reduce cash flow friction by providing clients with the much needed capital they need to operate their business, pay them employees and suppliers, and, most importantly, grow.

We believe the ability to deliver long term performance is the true measure of our success.

However, factoring is NOT a loan. Rather, factoring involves selling your businesses invoices at a slight discount to us for immediate cash and working capital, similar to discount payment terms or credit card interchange fees. Additionally, Factoring is much more cost-effective than adding on expensive and dilutive equity.

What Is Factoring?

Factoring is an efficient financial tool used by many businesses that combines working capital financing, accounts receivable bookkeeping, credit analysis of your customers, , credit protection, and collection services. Factoring allows you to convert your invoices immediately into cash that can be used immediately to meet payroll, other business expenses and help your business grow. Additionally, factoring allows businesses the power to ensure growth at any stage without incurring debt or selling dilutive equity. Kronos Capital factoring provides factoring services to small and medium-sized businesses worldwide.

How Does Factoring Work?

Our clients enjoy the benefits of immediate funding through factoring, as opposed to waiting up to 90 days for payment from your customer (called an "account debtor"). Once a client is approved after our due diligence, factoring with Kronos Capital is fast and simple. Clients send a schedule of invoices they wish to sell when capital is needed. Upon receipt of the schedule, Kronos Capital will verify the invoices and purchase the invoices by remitting 75 - 90% of the total amount within 24 hours. The unfunded piece of the invoice amount is called the "reserve." Once the invoice is collected from the account debtor in Pyramid Investment's lock box, the reserve amount (minus our factoring fee) will be returned to our client.

Recourse vs. Non-Recourse Factoring

In a recourse factoring transaction, the factor requires that the client repay any funds advanced to the client if the debtor does not pay the receivable. In many cases, factors will also accept a substitute invoice/obligation if the original debtor has not made payment after a certain amount of time passes. Recourse factoring transactions are less expensive to the client than traditional non-recourse transactions. Depending on the client's needs and objectives, Kronos Capital will engage in both recourse and non-recourse factoring transactions.

The Factoring Process:

1. Undertake due diligence based on reviewing your A/R payment history and customer list
2. Document the transaction through a Master Factoring Agreement which specifically details all terms and conditions
3. Work with your company to ensure all new invoices show the payee to be Kronos Capital
4. Verify the delivery of services or products on most invoices with your customers
5. Pay your company an immediate and full advance within 24 hours of invoice presentation
6. Collect the full invoice payment from your customer in our lockbox
7. Once an invoice has been paid by your customer, remit the balance, minus fees, to you