Riviera Participates in Community Food Drive


Mercerville office food drive participants

This past week, our Northeast office in Mercerville, NJ participated in a local food drive for the Mercer Street Friends.  The northeast team collected specific food and personal care items that the local community was in need of.

The Mercer Street Friends Food Bank channels 2.7 million pounds of food and groceries annually to a network of 80 local food pantries, shelters, soup kitchens, meal sites, schools, senior disabled programs and low-income housing sites.

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The History of Factoring


The History of Invoice Factoring | Riviera FinanceInvoice factoring is a type of business financing that’s an alternative to conventional business loans. A factor buys invoices from a business, allowing it to get cash up-front rather than having to wait for customers to pay. This type of financing has quite a few benefits, especially for smaller businesses that may not qualify for substantial bank loans. Although this type of financing has gotten more popular in recent years, it’s actually been around for some time.

Factoring Dates Back to Ancient Times

Factoring can be traced back to ancient times. It was used extensively during the Roman Empire. This was helpful for merchants who conducted business in faraway places, as Rome was one of the first global empires. Factors made it possible for these merchants to fund expeditions and to do business during slow seasons. The ancient world was largely dependent on agriculture, where weather, as well as local economic conditions, resulted in great fluctuations in crop price. Factors provided merchants with the resources that helped them survive and even thrive even when conditions were less than ideal.

The same was true for some of the great European empires, especially Britain during the height of its power. Some of England’s most prosperous companies, such as The Hudson Bay Trading Company and The East India Company used factoring to help finance their transactions as they built global enterprises. Throughout history, businesses have used factors to improve their financial situation.

The Advantages of Invoice Factoring

What has made factoring such a beneficial and influential form of financing for so many centuries? If you have a business, you typically deliver your products or services and then issue invoices to your customers. You then have to wait anywhere from a few weeks to a few months for them to pay. When you work with a factor, however, you receive payment for these invoices right away.

The top benefit of factoring is that it’s a fast way to improve your business’s cash flow. In many cases, the factor provides you with cash within 24 hours. You can use this cash to buy more inventory, upgrade your equipment, hire more help, or invest in marketing. Better cash flow help you grow your business faster. Unlike a loan, factoring provides you with cash without incurring additional debt. The factor collects payment from your customers along with a transaction fee. You don’t have to make monthly payments and interest as you would with a business loan.

Another advantage of factoring is that it’s a flexible alternative for businesses that have trouble getting loans. If you don’t have strong financials or haven’t been in business for a long time, you may get turned down by banks. Even if you can get a loan, it may not be large enough to cover your needs or it may come with unfavorable terms. A factor will usually work with you as long as you have customers to whom you issue invoices.

This creative financing option has long been instrumental in helping businesses improve their financial situation and grow faster. While factoring has taken on different forms over the ages, it has served the same basic function throughout history. It’s a viable financing alternative for all types of businesses who want to improve their cash flow.

how invoice factoring works

Contact the experts at Riviera Finance to see how invoice factoring can help your business grow.

Factoring Pricing: Making Sense of the Variables


Variables of Invoice Factoring Pricing ExplainedThe art of factoring is simple. So years ago, factoring companies had to come up with some way to make it complicated and hard to understand. They did so through pricing.

Here are the basic variables of pricing, why factoring companies use them, and how they can impact you.

Factoring Rate (Discount Rate)

Expressed as a percentage, and applied to the face value of the invoice, this is the amount the factoring company charges each time an invoice is factored. If the rate is 3% and the invoice is $10,000, the factoring fee is $300.  In a traditional “flat rate” transaction, this rate is fixed and it covers all the factoring company’s costs, including financing, staff, postage, supplies, accounting, administration, overhead, writeoffs, and profit.

  • If the extra income generated from the added cash flow is more than the 3% added cost, then factoring has value for you and you should consider it. Otherwise it may not be the best solution for your business.

Adjustments for Turn and Volume

Factoring companies may adjust the factoring rate up or down based on how quickly the invoices are paid, or “turn.” The rate might also be adjusted for the total dollar amount you factor, usually on a monthly basis. These adjustments should be clearly stated in the security agreement. In many cases, the adjustments can be significant, so the client should study the agreement and be diligent to take advantage of the adjustments whenever it makes sense to do so.

Effect of Reserves

Many factoring transactions are done with reserves, meaning the factoring company holds back a percentage of the invoice until after it gets paid by the end customer. In general, the greater the reserve, the lower the factoring rate, since the factoring company is advancing fewer funds and is taking on a lower risk. If you are looking to reduce your factoring rate and can manage without maximizing cash flow, ask your factoring company for a higher reserve and a lower rate.

Effect of Term Agreements

Factoring agreements can vary from month-to-month to two years and more. As a rule, the longer the agreement, the lower the factoring rate. To experience factoring before committing for the long haul, request a short-term agreement, then lengthen it after you’re convinced that factoring works for you.

Added Fees

This is where you must be extremely diligent to avoid turning a productive tool into an expensive burden. Factoring companies can be very creative in managing income by reducing the factoring rate while adding all sorts of other fees. Be careful to ask about them and scour the security agreement before signing. Here are some of the more common fees:

  • Postage and handling: per-invoice fees can include copying, mailing, filing, etc.
  • Application fees (one-time)
  • Setup fees (one-time)
  • Error fees: for client and/or end-customer errors
  • Credit checking fees: for credit requests
  • Chargebacks
  • Attorneys fees
  • Method of payment fees: ACH, wire transfer, etc.
  • Default fees
  • Early termination fees

There are many pricing elements and variables available in invoice factoring. Get ahead of the game and structure a deal that works for you.

How Riviera Finance Can Help Your Business with Invoice Factoring

For more information about invoice factoring and the pricing variable, contact a Riviera Finance representative in your area today.

Translating the Finance Jargon


How to Understand Financial JargonThe worlds of business and finance are full of jargon. If you don’t have a business degree or many years of experience, you may be confused or intimidated by some of the terminology. This is especially true when it comes to areas, such as factoring and business financing.

Often, you’ll see terminology with slight variations and you may wonder if two terms are referring to the same thing or if there are differences.

Here’s a brief description of some finance jargon you’re likely to encounter:

Trade Finance – This is a broad term that refers to any type of financing for commercial transactions.

Factoring – This is the practice of a business selling its invoices or accounts receivable to another business, called a factor, at a discount. This allows the business to receive immediate cash.

Invoice Factoring – This is the most common type of factoring that is commonly discussed today and refers to the type of arrangement mentioned above.

Discount Factoring – Another term that is often used interchangeably with factoring and invoice factoring, but most often outside the United States.  The factoring company “discounts” the face value of the invoice and retains the discount as its fee.

Accounts Receivable Financing – This is an umbrella term that includes factoring and accounts receivable lending.  Whereas factoring is an outright purchase of receivables, accounts receivable lending involves a loan secured by receivables as collateral.

Working Capital Financing – Any type of financing that is used to provide ongoing working capital for a business.

Inventory Financing – A loan or line of credit made to a business so that it can buy essential products or inventory for eventual sale.

Revolving Line of Credit – A specific amount of credit that is available on demand to a borrower.  Once the loan is repaid, the business can borrow again. The terms may change over time, but the basic arrangement remains steady.

Asset-Based Lending – Any type of business loan that’s secured by assets or collateral.  Assets include inventory, accounts receivable or anything of value that the business owns.

Purchase Order Financing – Also called purchase order funding. This practice is usually confined to businesses that sell products rather than provide services. It allows such businesses to obtain financing for purchase orders that they couldn’t otherwise fund.

It can be confusing to understand finance jargon because many of these terms are quite similar. Furthermore, you’ll find that different financial institutions may use them in slightly different ways. It’s always important to make sure you understand the specific terms of any arrangements that you enter into.

Invoice factoring can be a beneficial practice to help businesses improve their cash flow. Riviera Finance is one of the most trusted companies in this field, with experience in business financing since 1969. If you think that your business might benefit from factoring, visit the Riviera Finance website or call for a quote at 800-872-7484.