Marine Factoring has its roots in the age of the great exploration, when it was used by shipbuilding companies as a means to spread out their risk and reduce their cost to start new business ventures.
Whether it’s a shipbuilding contract or a vessel lease, Marine Financing can provide the necessary financial support to gain ownership of marine property.
A Factor working within the Marine Industry & Offshore Sector provides dedicated cash flow solutions supporting contractors, shipping companies and shipyards.
A Factor advances needed cash to companies against the value of their invoices before they have been paid on the invoices thus providing sufficient cash flow to meet the daily demands of running their business.
Marine Financing may involve the utilizing of a floating charge, which is a type of asset security over marine property yet this is primarily used when obtaining Marine Financing not regular Marine Factoring.
Marine Financing is a specialized area of finance dealing with the purchase, lease or ownership of a marine vessel.
Instead of waiting 30-90 days for their customer to pay them a business will sometimes factor its receivable assets to meet their immediate cash flow needs.
Marine Factoring involves converting a company’s unpaid invoices into immediate cash which the company can then use in any legal way it chooses.
Business owners work with a Factoring Company (Factor) to ensure that they have the necessary cash flow to keep their business running easy and more efficiently.
Invoice Financing is a form of Revolving Business Loan or Business Line of Credit. Businesses can borrow money from a lender with the funds being secured and based on the value of one or more of their outstanding company invoices.
Recourse Factoring is the most common form of Invoice Factoring.
With Recourse Factoring the client is liable for their sold invoices if their original customer never pays the Factor.
In Marine Financing aka A/R Accounts Receivable Financing the responsibility of collecting the invoice balance normally remains with the borrowing company, whereas in Non Recourse Factoring when an account debtor the customer of the client does not pay an invoice, then its the Factoring Company the Factor that will take the loss on that invoice, not the Factor`s client.
Factoring is a sale, where the invoice or asset is sold to the (Factor) Factoring Company with no intent to get the asset or its full value back, it then becomes the responsibility of the Factor to collect the invoice payment from the original customer of the client that has sold their invoice or invoices to the Factor.
Marine Transportation/Shipping Companies, Ocean/Sea/ Freight/ Cargo Contractors, and Shipyards benefit from Alternative Financing`s flexible options that include Invoice Factoring, Accounts Receivable Financing, Purchase Order Finance and Cargo Factoring.
With a Factoring Company (Factor), the amount of cash advance is typically based on the value of their client’s invoices, not their credit score.
The main reason that a business decides to use factoring is that it maximizes their cash flow, especially cash flow from their slow-paying customers.
For More Information On Marine Factoring and Financing
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