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BANKING
VERSUS FACTORING
Comparing Bank
Lending Rates to factoring? When compared to bank lending rates, factoring
initially appears to be very expensive. Here are four typical
questions/concerns that are raised by potential factoring clients.
Monthly Gross Sales: $ 100,000
Cost of Goods Sold: $ 60,000
= 60% of Gross Sales
Monthly
Gross Profit: $ 40,000
= 40% of Gross Sales
Fixed Expenses: $
10,000
= 20% of Gross Sales
Variable Expenses: $
17,000
= 17% of Gross Sales
Factoring Fees 3%: $
3,000
Total Expenses:
$ 30,000
= 30% of Gross Sales
Monthly Net Profit: $
10,000
= 10% of Gross Sales
Monthly Gross Sales: $ 50,000
Cost of Goods Sold: $ 30,000
= 60% of Gross Sales
Monthly
Gross Profit: $ 20,000
= 40% of Gross Sales
Fixed Expenses:
$ 10,000
= 20% of Gross Sales
Variable Expenses: $
8,500
= 17% of Gross Sales
Factoring Fees:
N/A
Total Expenses:
$ 18,500
= 37% of Gross Sales
Monthly Net Profit:
$ 1,500
= 3% of Gross Sales
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