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What type of working capital loans will you provide?
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EGF provides Accounts Receivable (A/R), Inventory, Equipment & Select Account Financing Our typical customers are businesses with a bright future who face challenges due to under capitalization or a lack of consistent profitability. |
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What are some of the benefits of financing receivables?
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Receivable financing can enable a company to increase inventory, finance growing sales & expansion, meet payroll & operating expenses, manage payables, purchase new equipment, restructure existing debt and take advantage of trade discounts.
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How much will we loan a company?
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EGF and its institutional investors generally make loans of this kind for amounts ranging from $50,000 to $5,000,000.
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What are your interest rates?
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Rates start as low as Prime + 3 with a low monthly administrative fee. Rates for select account-financing start as low as 2% per month. Rates on both plans are calculated on the average daily loan balance.
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What makes A/R financing different from Factoring?
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On A/R financing interest rates are calculated on the loan balance rather than the collateral balance. Generally, financing costs for A/R are significantly lower than factoring. The most important difference is that normally on an A/R line, we will not require notification of an assignment to a borrower’s accounts. It remains transparent to your customers.
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Are changes in accounting procedures required?
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No. When financing receivables our clients invoice and
collect their accounts as usual. At the same time, copies of invoices are sent to EGF’s team for each advance.
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Is it necessary to borrow against all receivables?
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No. Clients may borrow only when they are in need of working capital or need an advance on an existing invoice. Interest is calculated ONLY on the average daily loan balance.
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How long does it take to obtain funding?
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Normally, we can pre-qualify a prospective borrower within 48 hours of receiving the application and other basic data and provide funding within 5-10 days. Once an account is established, we provide loan advances within 24 hours of assignment of accounts.
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What is the difference between A/R Financing and Select Account Financing?
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Accounts Receivable Financing permits the client to assign and borrow against all accounts receivable. Select Account financing allows a client to borrow against specific accounts.
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Do you notify a borrower’s clients of the assignment of accounts?
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Accounts Receivable financing plans normally do not require notification. We realize how important it is for a growing company to maintain confidentiality. Collections are made directly by the borrower on behalf of EGF, or by establishinga lock box arrangement.
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Are Government and Foreign A/R eligible for financing?
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Yes, government receivables are normally eligible for financing as well as foreign accounts that meet reasonable credit criteria.
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