How We Work

Federal National's accounts receivable lines function as revolving facilities. They are easier to use and more flexible than many bank lines of credit. Following is an example of how Federal National works with High-Tech Company, a fictitious software and communications engineering company, which serves large corporations and government entities.

High-Tech performs its services and bills its customers specifying payment in care of Federal National on the invoices. Federal National is copied, typically by e-mail or Fax.

High-Tech and Federal National notify
High-Tech's customers that Federal National is its new financing provider and that High-Tech has assigned its accounts receivable to Federal National, requesting that the receivables be paid directly to Federal National. This is a commonplace form of financing that does not trouble High-Tech's customers.

Federal National's staff verifies that High-Tech's customers received their invoices and that service has been rendered. In most cases, this is accomplished with a telephone call, e-mail, and/or online payment system inquiry. High-Tech's customers are usually not asked to sign any forms or agreements with Federal National.

Using ACH or wire transfer, Federal National advances up to 85% of High-Tech's invoice (90% for its invoices to federal government customers) within one business day after verification.

Invoices are paid by High-Tech's customers directly to Federal National. Federal National applies these customer payments daily, recovering the amount advanced to High-Tech and deducting the financing fees incurred. The balance is sent to High-Tech's bank account within one business day following receipt.

Once the accounts receivable line is established, High-Tech may choose which of its invoices to finance and when to finance them. Customer payments received by Federal National for invoices not financed by High-Tech are remitted the next business day to High-Tech and are not subject to financing charges.

Federal National makes available to High-Tech, via Federal National's Online Client Portal, daily advance and settlement reports and complete reports of daily, monthly and other period activity. The reports in the Online Client Portal reflect all transactions as of the close of the prior business day.