Consumer and Contract financing are options that allow customers to buy more now and pay later, while the seller receives immediate payment.

How does it work?

If you sell goods or services, you can allow your customers to make periodic and scheduled payments even though you will receive immediate bulk payments by selling your customer's payments or contracts to a third party.

Contracts and payments are purchased at a discount with a reserve to cover eventual defaults. For example: If you have a customer with marginal credit on a 12-month contract, you can receive immediate payout of up to 80% minus potential default reserve that will be refunded to you later, instead of waiting one full year to collect all payments.

Just about any business that sells to consumers can benefit from selling accounts receivable contracts. A partial list of companies that are presently benefiting from this program includes:

• Vocational Schools
• Timeshare or Vacation Clubs
• Dating Services
• Exercise Equipment for Consumers
• Home Food Plans
• Discount Buyers Clubs
• Medical Procedures (Medical must be discussed in more detail.)
• Seminar/Sales companies
• Jewelry Stores/Furniture Stores
• Business opportunities
  

Businesses in many industries sell contracts. The main qualifying criteria to sell a contract are margin -- to have a margin of profit that will enable you to sell at a discount. Of course, there are other conditions as well. The most common conditions in businesses that sell contracts are:

• Each individual sale or contract does not exceed $10,000 otherwise a down payment may be required.
• Margins are typically 50% or better.
• Total sales volume is at least $10,000 a month or more.
• Customers that are financed are gainfully employed or have other valid sources of income.
• Customers that are financed have income of at least $20,000 a year.
• Customers that are financed have a home phone.
• Customers that are financed may have marginal to good credits.

The key benefit why businesses sell contracts is that they receive immediate cash instead of waiting on delayed or monthly payments. An influx of cash can make the difference between running a growing and successful business versus running a business that is continuously strapped for cash and always on the brink.

Businesses that conventional lenders do not understand or that are perceived as risky with consumer sales of $1 million a year or less are ideally suited for contract financing. There are other programs for businesses with bigger sales volume. Funding rates for contract purchases varies according to the risks involved, interest rates to the consumer etc. Selling of contracts may not be the most inexpensive option for a business, but it can net more cash in the long run. Please bear in mind that references of any business that applies for contract funding program will be verified and the business must be reputable to qualify.

We can also arrange for management and servicing of business loans and other accounts receivables for a flat fee without providing in-house financing. This latter service can be ideally suited to companies that find it more efficient and cheaper to outsource receivables management.

If you would like to establish a consumer/contract funding account, please click here to obtain a copy of our worksheet and fax it to us after you have completed it.

QUICK QUOTE REQUEST
*All Fields Are Required