FAQs

Does Federal National provide financing with its own money?

Federal National is a funding source, not a broker. Federal National is funded with substantial amounts of its own capital and with a large, institutional line of credit. Federal National finances over $200 million each year for 80 to 100 customers nationwide. Federal National holds all of it’s financing on its own books and does not place clients with other lenders, factors or servicer providers.

How long does it take to obtain funding from Federal National?

Federal National’s application process is simple and straightforward. It averages two weeks for Federal National to process a completed application package and provide the initial funding. Subsequent funding is usually accomplished on a same or next day basis.

Do my customers need to know that I am financing with Federal National?

Your customers are informed that Federal National has purchased the accounts receivable and that payments should be made in care of Federal National. This notification is accomplished professionally and conveniently, and is cast within a context of your prosperity and growth opportunities. Federal National’s professional handling of accounts-receivable relationships often results in improved relations and more prompt payment. This is a well established form of finance that large customers will take in stride and is usually handled routinely within your customers’ accounts payable departments.

How much paperwork is involved?

At application, Federal National requires a modest amount of basic financial information. Once the account is set up. You simply fax copies of invoices you wish to finance and Federal National takes it from there. Most often, there are not important additional reporting responsibilities. If you have a large Funding Line comprised of many invoices, Federal National may collaborate with you to work from reporting available in your systems to eliminate faxing. Our system is easier and involves less paperwork than most bank lines of credit.

What happens if I have a good month and don’t need to finance all of my receivables?

You may decide on a day-by-day basis how much of your company’s accounts receivable to submit to Federal National for financing. When invoices that were not financed are paid, they are forwarded by Federal National the next business day with no financing fees applied.

What happens if, after a while, I don’t need Federal National any more?

Federal National supports swift and easy exits when we are no longer needed.  Typically we establish a very modest exit fee meant to compensate us for the costs of setup if you depart early.  The exit fee reduces with each month you finance with us and only applies in the first year.  Federal National typically does not require commitment fees.

How does Federal National’s Factoring Line compare with asset-based lending?

Federal National’s Funding Lines compare favorably with the best values in the market for asset based lending. In most cases, the name “Factoring” versus “Asset Based Lending,” has very little to do with the services you will receive or price you will pay.