Frequently Asked Questions

Gateway wants to address any and all questions you might have about our program. If the information you are seeking is not provided here, please Contact Us and we will be happy to assist you in any way.

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Q: What is Accounts Receivable Financing?
A: Accounts Receivable Financing is a form of asset-based lending that offers financing to business owners. Nearly every successful business has capital needs that must be met in order for the company to be successful. Many businesses generate commercial accounts receivables and those receivables may be used as collateral for raising capital necessary to operate a successful company. To discuss how a revolving Line of Credit from Gateway can help your business grow, please call us toll free at 800-377-9730. There is absolutely no obligation. If you're currently financing with another asset-based lender, we can typically save you money and our service and professionalism is second to none. Back to the Top

Q: What is Asset-Based Lending or an "Asset-Based" Loan?
A: An "Asset-Based" loan or "Asset-Based Lending" is a secured business loan in which the borrower pledges as collateral any assets used in his or her business. It is also called commercial financing or asset-based financing. Accounts Receivable Financing is a form of asset-based lending. Gateway is an asset-based lender that specializes in accounts receivable lines of credit and we provide hundreds of companies with commercial financing. Rather than impose restrictive covenants, conditions, and other limitations relating to our borrower's businesses, Gateway looks primarily at the quality of the businesses' assets, primarily the accounts receivables, along with other assets, as collateral for these business loans. If a business has a slow season, or a temporary downturn for whatever reason, or has new management, or has less than 3 years of sustained profits, then many banks will take some form of negative action against the business. Gateway does not, since its primary focus is the quality of the accounts receivables being assigned. Back to the Top

Q: What is Factoring?
A: "Factoring" is a form of accounts receivable financing, where a business sells its accounts receivables (also know as invoices) to a factor at a discount. Gateway is not a traditional factor. In factoring, a company sells its accounts receivable to a factoring company at a discount from face value so that it can obtain cash upfront (i.e., so that it does not have to wait the normal 30-90 days for its invoices to be paid). The downside to factoring is that the discount taken by traditional factors can be quite costly. Gateway is not a factor; it is an asset-based lender that specializes in accounts receivable financing. As a result, for businesses that have used factors previously, a Gateway line of credit will save such companies a substantial amount of money. Saving money is just one of the many benefits that a Gateway's commercial financing arrangement can offer its customers. To discuss the various ways that a revolving Line of Credit from Gateway can help your business, please call us toll free at 800-377-9730. Back to the Top

Q: What is the Difference Between Accounts Receivable Financing & Factoring?
A: Many business owners equate accounts receivable financing with factoring. However, there are numerous significant differences. Factoring is the discounted sale of accounts receivable. With factoring, the factor purchases each invoice that is sent to a customer. Factoring can be costly. In contrast, in the typical asset-based lending and/or accounts receivable financing arrangement, the lender advances a percentage of each qualified invoice amount that is assigned to the lender. In this form of financing, the business owner maintains some control of its accounts receivable and its customers. Gateway works with its borrowers to assure that collections efforts are accomplished. A Gateway Line of Credit is superior to factoring in that borrowers have considerably more flexibility in what invoices they assign, how notification is handled, substantial cost savings, and many other advantages. And Gateway is one of the premier, most experienced, and professional asset-based lenders in the Western United States. See Line of Credit v. Factoring for more information on the difference between Accounts Receivable Financing and Factoring, and the benefits to choosing A/R Financing Back to the Top

Q: Is Accounts Receivable Financing a Type of Loan?
A: Yes. In the typical accounts receivable financing arrangement (a form of asset-based lending), a business assigns its invoices to its lender, and the lender uses the assigned A/R as the collateral for one or more loans. (In contrast, in the traditional factoring scenario, the factor buys the accounts and, therefore, the factoring transaction is actually a purchase rather than a loan.) Gateway is an asset-based lender that specializes in accounts receivable loans. Typically, Gateway enters into a contact with a borrower, whereby the borrower assigns to Gateway its accounts receivables, which creates "availability" or available funds that the borrower can request. The borrower can take all of its "availability" or it can take nothing at all. The borrower can have Gateway deposit a check into its checking account (at qualified financial institutions), we can wire and/or ACH the funds, or the borrower can come in and physically pick up a check. When the collections from the assigned accounts come into Gateway, it typically creates additional "availability," which the borrower can access. This is the essence of a Gateway line or credit - Invoices are assigned, advances are made, and collections are received. One of the many benefits of a Gateway line of credit is that the borrower only pays interest on the money they borrow! Not to mention that there are no long term contracts, no expensive assignment fees, no costly termination fees, etc. In fact, Gateway is one of the very few accounts receivable lenders who does not charge any termination fees. Borrowers are always able to pay off their line of credit and Gateway will promptly provide a value received letter, terminate the Security Agreement, and terminate the Personal Guaranty. Most accounts receivable lenders charge a very substantial termination fee (and many only allow a borrower to terminate the contract during a very short window of time, such as one week during the year), which can be in the tens of thousands of dollars. Moreover, the primary form of collateral for a Gateway line of credit is the accounts receivables being assigned. As a result, it is the credit-worthiness of your customers, not your balance sheet or company history, that are of primary importance to Gateway. On the other hand, banks are heavily regulated and are driven by a variety of pressures. When times are tough and cash is tight, banks typically limit lending and/or impose substantial restrictions on commercial lending. In many cases, Gateway is often the ideal financial solution for many businesses. To discuss the various ways that a revolving Line of Credit from Gateway can help your business, please call us toll free at 800-377-9730. Back to the Top

Q: What are the Major Benefits of Accounts Receivable Financing?
A: A business may obtain immediate cash, the same day it assigns Gateway its qualified accounts receivable. There is no need to wait 30, 60, 90, or even 120 days for customers to pay. You're essentially using one your company's most valuable assets, its accounts receivables, as collateral to obtain working capital immediately. Your business enjoys increased cash flow, while we provide credit, collection, and accounting expertise and services. This allows your business to concentrate on its core services and production. Also, there are no long term contracts, no assignment fees, and no termination fees. You pay interest only on the funds that you borrow. Gateway's commercial lines of credit are competitively priced, so you may be surprised at just how affordable accounts receivable financing can be with Gateway. Our decision to finance your company is based on you and your customers' credit-worthiness instead of your balance sheet. If you can deliver the goods and services you've promised to your customers, and if your customers have acceptable credit, we can often provide a financial solution, no matter how limited or problematic your company's financial history. Back to the Top

Q: Who can Benefit from Asset-Based Lending or A/R Financing?
A: Manufacturers, wholesalers, distributors, and service providers all turn to asset based lending for an equally diverse range of financing needs. Our clients include manufacturers, service providers, temporary services providers (e.g., temp agencies), importer, exporters, distributors, wholesalers, businesses in the apparel industry, high tech businesses, trucking companies, start-up companies, businesses looking to expand, companies that have exceeded the loan amounts imposed by their banks, established companies that have encountered financial difficulties, and companies that want to expand their product lines, upgrade equipment, and grow in size all turn to us for their financing needs. Back to the Top

Q: Will my Customers Think I'm in Financial Difficulty if they Find out I'm Using Accounts Receivable Financing?
A: Absolutely not! Accounts receivable financing is an extremely popular financing option for many, many businesses. Besides, we have a number of notification options, including non-notification (for established businesses that have additional collateral to pledge as security), accounting office (where your customers will send the payments to an "Accounting Office," which is Gateway's Post Office Box), or full notification. Even on Gateway's full notification accounts, all contact that we have with your customers is handled in a professional manner. Remember, we want your business to grow. And, of course, we both want your customers to pay you in a timely manner. With our full notification accounts, the only real difference to your customers is location where they will be sending their payment and to whom payments are made. While you remain primarily responsible for your collections, we are happy to assist you in this regard. We are perceived as a professional arm of your organization. Your customer relationships, in fact, will likely improve. And, for our non-notification accounts, your customers will not even be aware that you have an asset-based, revolving line of credit. To discuss the various ways that a revolving Line of Credit from Gateway can help your business, please call us toll free at 800-377-9730. Back to the Top

Q: Will my Customers take Longer to Pay?
A: No. Often, just the opposite is true. If your customer is a large corporation with its own invoice-payment policy, it will make no difference who the creditor is. As always, they will adhere to their credit policy and pay accordingly. If your customer is a smaller or closely managed company, chances are they will be inclined to pay faster knowing that Gateway, as a commercial lender, is a prime reporter of credit information to credit bureaus and an influential credit-reference resource. Moreover, if one of your accounts fails to pay you, we have an attorney on our staff who can assist with collections on large, unpaid invoices. Back to the Top

Q: Wouldn't a Bank Loan Make More Sense?
A: Sometimes they do, but other times they do not. Banks typically have restrictive lending requirements relating to cash flows, profitability, equity, years in business, federal restrictions, etc., which may prohibit them from making loans to certain companies. We base our lending decisions on the business we are financing as well as the credit of its CUSTOMERS, so we can provide financing in most situations, even when your local bank can't or won't. Back to the Top

Q: Why would a Company Assign their Accounts Receivable as Collateral for a Loan?
A: Many businesses have capital demands that, if met, would increase their profitability. Other companies might have recurring cash-flow problems and often can't afford to wait 30, 60, 90, or even 120 days for invoice payments. Demand for capital to meet the immediate financial requirements of a business is a common struggle for owners. Assigning invoices to Gateway provides a mechanism to help meet these capital demands. Upon assigning the invoices, a business may obtain funding the same day. Then, when the invoices pay, this creates additional "availability," which the borrower is free to take. Interest is charged at the end of the month, and only on the average daily balance of the actual funds borrowed. To discuss the various ways that a revolving Line of Credit from Gateway can help your business, please call us toll free at 800-377-9730. Back to the Top

Q: Will you help me Collect some of my Old and/or Delinquent Accounts?
A: We generally finance current accounts and accounts that are not 90 days or longer past due. We make some exceptions, but this is our typical practice. And, while you remain primarily responsible for your collections, we are happy to assist you in this regard. Nevertheless, accounts greater than 90 days old are typically not included as eligible collateral for the purpose of generating availability. For more information on this and other commercial financing topics, please call us toll free at 800-377-9730. Back to the Top

Q: How do I get Started and how long does the Process Take?
A: Please fill out our online application and Contact Us. We can often provide funding within 24 hours. Back to the Top

Q: Do I Need to go Through as Much Trouble for Accounts Receivable Financing as with Bank Financing?
A: No. All we need to quickly produce a specific financing proposal for your business is a completed pre-qualification form and basic company information. Click Here to Pre-Qualify Immediately and Get Started Today. Back to the Top

Q: How much does Accounts Receivable Financing Cost, and How are the Fees Determined?
A: First, Gateway's rates are extremely competitive because we have been providing asset-based loans for over 30 years. Our rates are based on individual and specific circumstances -- they depend on the size of your line of credit, the credit-worthiness of your customers, your average invoice size, average payment cycle, financing volume, company assets, and other elements. Because our rates are so competitive, we rarely lose any prospective deals based on rates. In general, the cost of financing is outweighed by its significant benefits: access to immediate cash, credit analysis, assistance with collection work, accounting services, and detailed accounts-receivable reporting. For more information on how much Gateway can loan your company, as well as the best rate we can provide your company, please call us toll free at 800-377-9730. Back to the Top

Q: How Quickly will I Receive Funding?
A: We can typically move as fast as you can! In fact, within 24 hours of receiving your basic company information, we can send you a proposal. And, if you accept it, we promptly conduct our due diligence and complete all documentation. Then we can fund your business once we receive the documentation back from you. We have funded companies in as little as 24 hours. However, it typically takes from a couple to a few days to get all of the paper work prepared and executed. Once your accounts is set up, we provide same day funding (i.e., we'll fund your qualified, assigned invoices the same day that you submit them to us!). Back to the Top

Q: How Much Money can I get through Financing my Receivables?
A: Gateway's typical rate of advance is 80%. In some industries and situations, we can increase the rate of advance ever higher. For more information on how much Gateway can loan your company, as well as the best rate we can provide your company, please call us toll free at 800-377-9730. Back to the Top

Q: Why should I choose Gateway over other asset-based lenders?
A: There are many reasons why Gateway is an ideal company to do business with, the following are a few examples:

  • Gateway has been in business for nearly 30 years, and has created a reputation of excellence.
  • We are a family owned and operated business, and therefore, we value the relationships we form, and do the utmost to nurture those relationships.
  • We have exceptional service with friendly, efficient, hardworking loan officers.
  • Our rates are highly competitive.

See Gateway Line of Credit v. Factoring for more information. Back to the Top

Q: Does your company have any additional fees, other than the interest charged on a loan?
A: Most lenders have numerous fees that are not readily apparent to a prospective borrower, such as an assignment fee, an annual line fee, a termination fee, etc. Although these fees may seem trivial, when they are added up they can cost your company a lot of money. Gateway has a one-time 1% loan origination fee deducted from the proceeds of your first funding. This aside, Gateway has no other fees other than the interest paid on the money borrowed. Gateway does not even have a termination fee. Back to the Top

Q: What types of businesses does Gateway finance?
A: Gateway serves a wide range of industries, including distributors, trucking companies, telecommunications companies, temporary personnel agencies, printing companies, computer hardware and software providers, manufacturers, wholesalers, consulting organizations and service organizations, including such industries as janitorial services, computer services and armed-guard services. If you sell goods or services to another credit-worthy business or government entity, it's likely we have a solution for you. Back to the Top

Q: Do you have any restrictions as to the location of a client or their customers?
A: No. Gateway is a nationwide commercial finance company-we can serve clients anywhere in the United States. Back to the Top

Q: Do I have to assign all of my invoices?
A: No. You decide which invoices you want to assign to help successfully manage your financial needs. We provide you with a flexible financial service that allows you to create the cash flow you need to be successful. Gateway does not want to manage your company, only you know what's best for your business. Back to the Top

Q: Are my receivables held as collateral?
A: Yes. We require a first position security interest on all accounts receivable. Back to the Top

Q: Does Gateway require additional collateral?
A: Gateway files a UCC-1. But no other additional collateral is required. Back to the Top

Q: How long do I have to commit to financing my Receivables?
A: Our standard term is six months. However, we can adjust the term to meet the needs of the client. Back to the Top

Q: How will I know the status of my Receivables?
A: Gateway is pleased to provide online account management, which allows companies to access their complete account history securely using the Internet at any time. In addition, you will be assigned to a loan officer who will be your direct contact for any questions you have. Back to the Top

Q: How do you communicate with my customers?
A: It is not always necessary for our loan officers to communicate with your customers, but when they do, they communicate by mail, fax and occasional telephone calls as part of our accounts receivable management/collection services. The letters ask your customers to verify the invoices and direct invoice payments to us. Should your customer default on payments, we will first contact you before taking any action. Back to the Top

Q: Who is responsible for collections?
A: Your company is responsible for collections, however, Gateway will assist in that effort. Back to the Top

Q: How do I receive the money from my assigned accounts?
A: Gateway can wire funds to your account, send a check through FedEx or any other overnight service, via US mail or we can simply drop your check off in person. In some cases, if your bank has a branch near our operations office we can deposit the check directly into your account. Back to the Top

Q: How will our customers be treated?
A: We recognize and respect the relationships and goodwill you've created with customers, and we'll treat your customers with the same degree of integrity and professionalism. Any serious issues will be discussed with you and handled appropriately. Back to the Top

Q: When is Accounts Receivable Financing NOT a good fit for a business?
A: Generally factoring is not a good fit in the following situations:

  • Your business operates on extremely low margins (less than 8%).
  • Your business has significant cash reserves free of cash-flow concerns.
  • Your business serves as a sub-contractor to a less-than-established general contractor.
  • Your business involves Medicaid or Medicare-based accounts receivable.
  • Your business sells almost entirely to less than credit-worthy customers.
  • Your business has a significant amount of accounts receivable that are already overdue.
Back to the Top

Q: How do my customers know where to send payments?
A: When Gateway is assigned an invoice, it is stamped with our address before being mailed to the customer. Back to the Top

Q: What type of invoices can I assign?
A: You can assign almost any valid invoice for a service already performed or a product already delivered to a credit-worthy business or government entity. Back to the Top

Q: What if my company has a bankruptcy, bad credit, poor financials, or other derogatory information or history?
A: In general, these are not deal-breakers, as funding decisions are based on the credit-worthiness of your customers, not on your credit. Back to the Top

Q: What can I do with the additional cash I receive from financing my Receivables?
A: You can use the additional cash to take advantage of suppliers' discounts, meet payroll, satisfy operating overhead, purchase needed inventory or equipment or just establish good credit for future expansion. Back to the Top

Q: What reports will you provide for me?
A: Gateway will provide bimonthly detailed aged balance reports, a receipt for all collections, and a monthly loan ledger. Back to the Top

Q: Can you supply me with references from existing clients?
A: Yes. Gateway is proud of the service we offer and happy to provide references once we have received a completed application. Back to the Top

Gateway wants to address any and all questions you might have about our program. If the information you are seeking is not provided here, please Contact Us and we will be happy to assist you in any way.

Click here to Apply Now!