How Invoice Factoring Can Solve Cash Flow Problems For Your Business

September 8, 2011 by Cash Flow Tips
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How Invoice Factoring Can Solve Cash Flow Problems For Your Business

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Home Page > Business > How Invoice Factoring Can Solve Cash Flow Problems For Your Business

How Invoice Factoring Can Solve Cash Flow Problems For Your Business

Posted: Jan 15, 2010 |Comments: 0
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Invoice factoring is a way for you to convert your company invoices and future credit card receipts into immediate cash quickly. You sell these invoices or credit card receipts to an invoice factoring company in return for immediate cash.

You may decide to factor your invoices for many reasons. Typically, companies use factoring to increase marketing and advertising, finance seasonal needs, reduce bad debt and improve credit rating, Offer extended credit terms to their clients, meet increased sales demands and more.

Factoring, unlike a traditional loan, does not create company debt. You will not be required to make monthly payments. Your credit line will not be determined by your company’s financial strength or your personal credit. Your credit line will be determined by the financial strength of your customers and the size of the invoices you hold.

Every business needs cash to grow. In fact, sometimes the faster a business grows, the more its cash flow becomes a concern. If you’ve tried to obtain a bank loan recently, you know the banks move slowly, if at all. The approval process is burdensome and most applicants don’t even end up qualifying for a bank loan.

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As a business owner, you probably don’t have time to write a business plan and assemble the endless piles of paperwork the banks demand, let alone time to sit around waiting months and months while bank committees consider your request.

A factoring company will request a little documentation (e.g., copies of your invoices) from you and may have a few follow-up questions. Once you are approved, you choose the customers and invoices you’d like to sell. The company will then advance the funds to you and you can use them immediately to pay rent, purchase supplies, meet payroll, take advantage of expansion opportunities, or any other way you choose. When your customer ultimately pays the invoice, they will collect back the money they gave you earlier and send you any excess funds.

If you have customers that take 30+ days to pay your invoices or your business accepts credit cards regularly and you need cash soon, factoring can help you. There is simply no need to borrow from a bank to get the cash you need – factoring invoices can help you without all the time and difficulty involved in applying for traditional bank loans.

Generally speaking, businesses in most industries will qualify for invoice factoring. The main requirement is that you sell to financially sound customers on a regular basis, and do so on open credit terms. Some of the more popular industries for factoring include: trucking and freight, temporary staffing, medical, oil and gas, distributors, government contractors, construction, and manufacturing.

Invoice factoring is a great way for any business to remedy cash flow issues quickly. Many companies offer guarantees of funding in as little as 24 hours time. Typically, in situations where immediate funding is not required, you should expect the approval process to be completet in about 5 to 7 days. If your business needs money to grow, buy equipment, or even pay bills; invoice factoring may be the best solution for you.

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GrowCo Factoring & Financial provides creative financing solutions to growing businesses. We are a leading invoice factoring company with offices in Connecticut and Texas. For a free invoice factoring quote, visit our website at http://www.fasteasyfactoring.com

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Factoring to Improve Business Cash Flow?

August 31, 2011 by Cash Flow Tips
Filed under Factoring & Invoice Discounting

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Factoring to Improve Business Cash Flow?

Factoring to Improve Business Cash Flow?

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Factoring to Improve Business Cash Flow?

Posted: Aug 24, 2011 |Comments: 0
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Factoring to Improve Business Cash Flow!Â

By Marcia Gershenbaum-Bunday www.factoryourreceivables.com

“Factoring is a financial tool that allows businesses to get paid on their invoices in as little as 24 hours instead of waiting 30-90 days for their money.Â It is a process where a business sells their credit worthy invoices to a factor at a discount.Â They are paid right away and the factor waits the 30-90 days.Â It usually involves three entities the factor who buys the invoice, the client who sells his invoice to the factor, and the client’s customer who pays the invoice.”

In this current economic climate of two-digit unemployment many people are considering starting their own business.Â They reason how else they can be assured that they will continue to be employed and have an income they can count on unless they count on themselves to provide it.Â In many cases thinking of a way to make money is not the problem, but the old adage that “it takes money to make money” is what holds a budding entrepreneur back.Â

In the past, it was often possible for a new business owner to get a business loan at the bank. Now either their credit has taken a nose-dive or banks just aren’t as willing to loan money on an unknown quantity or business even with a great business plan.Â You may already know there is a market for your products and have customers who are willing to purchase from you, but you are either too new or have some credit problems which prohibit being approved for a loan.Â Factoring receivables or invoice financing can often be an answer to your problem!

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Another scenario which could apply is you have been in business for a while, but when the economy tanked a few years ago your ability to pay your obligations was inhibited.Â Â Your customers may also have had some financial problems as well and are now taking 30, 50, 60 days or even longer to pay their invoices. Â Although having slow paying customers is expected in today’s business environment, they make managing your cash flow a very difficult task. Paying suppliers, salaries and rent becomes a challenge.Â However, there is a way to solve this problem. The solution involves factoring your invoices.

Factoring will provide your company with the necessary capital to operate the business, pay suppliers and grow. However, factoring is not a business loan. Rather, factoring involves selling your invoices at a discount for immediate cash. The factoring company waits to get paid, while you get immediate use of the funds.Â Invoice factoring or financing can easily be integrated to any business and works as follows:

You deliver goods or services and invoice for them
You sell the invoice to the factor. They give you the first installment of 70% to 90% of your invoice. This is called the advance.
You get immediate funds to run your business
Once the customer pays the factoring company, you get the second installment (of 10% to 30%) and are charged a small fee for the transaction. This is called the rebate

AlthoughÂ factoring costs vary and are based on transaction size and the time it takes for the invoice to pay, the average cost of a transaction is usually between 1.5% to 3% of the invoice per month.Â Factoring is definitely easier to obtain than a business loan and can usually be set up in 1 week or less.Â The most important requirement is that you work with credit worthy businesses and have no liens against your receivables.Â If you are interested, please contact me at www.factoryourreceivables.com.

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Marcia G Bunday has been factoring broker for multiple factors for about 10 years. Â

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Marcia G Bunday has been factoring broker for multiple factors for about 10 years. Â

Construction Invoice Factoring – Solve business cash flow problems

May 5, 2011 by Cash Flow Tips
Filed under Factoring & Invoice Discounting

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If you need funding for a construction job, commercial construction loans from a bank could be an optionâ€”but they can be very hard to qualify for. Construction factoring is a reliable alternative to standard commercial construction loans, and is an excellent way to ensure you have the financing necessary to build your company. Factoring with CapitalPlus.com gets you money for your invoices quickly and efficiently so you are able to pay for materials and labor, and to help you competitively bid on other jobs. And as with standard factoring, with construction factoring you can receive up to 80% of your invoice amount in advance, with the balance held in reserve until the invoice is paid.

Tags: Business, Cash, Construction, Factoring & Invoice Discounting, Flow, Invoice, problems, Solve

Experiencing Cash Flow Problems? Invoice Discounting Could be the Answer

March 2, 2011 by Cash Flow Tips
Filed under Factoring & Invoice Discounting

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by Casey Serin

Experiencing Cash Flow Problems? Invoice Discounting Could be the Answer

Experiencing Cash Flow Problems? Invoice Discounting Could be the Answer

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Home Page > Finance > Experiencing Cash Flow Problems? Invoice Discounting Could be the Answer

Experiencing Cash Flow Problems? Invoice Discounting Could be the Answer

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Posted: Dec 27, 2007 |Comments: 0
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More and more modern businesses are proving the importance of invoice discounting. Whether these businesses are small start-ups or rapidly expanding, capital is the heart of every business and cash flow its lifeline.

As a company providing products or services to other businesses on a credit basis, you may already be experiencing cash flow problems. Even if you have 30 day terms, you might find your clients are working to varying payment terms of 60 days or even 90 days, itâ€™s easy for your payments to become tied up in the sales ledger. This can make affording your own expenditures difficult. Borrowing from the bank to cover your finances may seem like the best option, but itâ€™s often the most heavily administrated and time consuming, let alone the least cost-effective.

In these instances, a specialist finance broker becomes essential. A good broker can help identify the problems and tailor solutions to your needs with the right finance house that best suits your style of business. One solution they can guide you through is invoice discounting.

With an invoice discounting model tailored to your specific needs, a profitable business can draw money against its invoices immediately they are issues (as well as in the first instance get a payment from outstanding invoices. A discounter assesses what percentage of the outstanding sales ledger can be advanced, depending on your business up to 90%. Each month you will pay back more or less depending on the activity of your cash flow, with an interest rate based on the net amount of the advance.

All that is required of you is the continued administration of your sales ledger and debt collecting. This can prove beneficial when monitoring how much you can repay each month. Invoice discounting is an alternative, cost effective way of improving cash flow thatâ€™s flexible enough to support your fluctuating finances on a monthly basis.

Another benefit of invoice discounting is the support it provides you while working with clients of varying payment terms. invoice discounting allows you to build strong relationships with your client base without compromising on your monthly financing. Your customers donâ€™t even need to know such a system is in place.

And as well as improving customer relations, invoice discounting can significantly increase your available funds, improving your spending power. This can be a huge advantage when it comes to negotiations and prompt payments with suppliers – essential for small businesses looking to grow.

So what are the costs involved in invoice discounting and how do they compare to other forms of borrowing?

Alongside an administration fee based on your turnover and a monthly charge for your discounter, youâ€™ll need to pay back interest on the advance. This interest rate is often comparable with that of an overdraft, ranging from 1.5 per cent over base rate to 3 per cent over base rate and calculated on a daily basis. And, with a number of independent financers and banks both offering invoice discounting, the rates are very competitive.

Unlike an overdraft, which may need to be renegotiated or give your business a poor credit rating, invoice discounting can help keep your business in credit. With the help of the right finance broker, sourcing the best discounter for your business is even more straightforward.

If you have an annual sales turnover averaging Â£200,000 or more and a minimum net worth of Â£25,000, with effective credit history and profitability in your business, invoice discounting could be the best step to solving your cash flow problems.

To find out more about invoice discounting for your business, contact Martingales for a free assessment. Martingales specialise in taking the strain out of corporate cash flow with bespoke finance solutions and invoice discounting.

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My daughter has irregular periods. i.e. it lasts for 12 to 15 days with heavy flow. at present he is in abroad. How can she over come this problem?

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www.ifgnetwork.com – It is much easier to be approved by a factoring company than to try to get a loan during these economic times. Factoring pays invoices that are due in 30 or 90 days, in less than 48 hours.

Hi Tech Companies Look To Receivables Factoring For Cash Flow Help

February 22, 2011 by Cash Flow Tips
Filed under Factoring & Invoice Discounting

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Hi Tech Companies Look To Receivables Factoring For Cash Flow Help

Hi Tech Companies Look To Receivables Factoring For Cash Flow Help

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Home Page > Finance > Hi Tech Companies Look To Receivables Factoring For Cash Flow Help

Hi Tech Companies Look To Receivables Factoring For Cash Flow Help

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Posted: Mar 15, 2010 |Comments: 1
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Hi tech companies provide solutions for all size companies that require technical help with networks, computers, websites, and other areas that require highly skilled high tech labor.Â These companies can have one to thousands of highly skilled technical experts that provide solutions for computer and high tech needs.Â Since larger companies often require 30 to 60 day payment terms this often puts the technical consulting firm in a cash flow crunch.Â Highly skilled tech labor is expensive, and these employees are paid either weekly or bi weekly.

Accounts Receivables factoring often provides a fix for the cash flow crunch brought on by slow paying receivables combined with weekly payroll expenses.Â Many tech staffing business owners have discovered how factoring receivables can provide the needed cash cushion to keep the payroll paid while allowing room for growth.Â Once invoice factoring is functional as soon as the invoice is generated up to 90% or more of the total invoice value will be advanced within one business day.Â This can reduce the waiting for payments by up to 60 days providing the cash needed to operate effiecntly.

Most factoring companies charge .5% to 5% of the invoice total to provide the advance on the receivables.Â The factoring rates vary based on the credit rating on your customers, how long your customers take to pay, and the amount in dollars your company will factor with the factoring company.Â The amount advanced on the invoices also varies as each factoring company has different policies.Â The most common invoice advance rates range from 80% to as high as 99%.Â Most technical staffing and consulting firms are content with getting the funds needed to cover payroll and this can often be achieved.

Since banks often look for company assets and strong balance sheets factoring receivables often fits very well in the tech consulting industries.Â The reason is that the primary assets in tech consulting are your labor and that does not provide the collateral the bank wants.Â The factoring companies will be content with customers that have reasonable credit quality and that is an asset that most tech staffing firms have available.Â If your technical consulting company has growth opportunities by providing technical expertise to other companies it’s very likely that factoring can provide a cash flow solution.

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Jeff Bross, President, Capital Quotes, LLC

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factoring, receivables factoring, hi tech factoring, hi tech companies, tech industry factoring, invoice factoring, accounts receivables factoring, tech staffing cash flow

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1. Mattmorgan 12/05/2010

i want to talk to u….. seoexpart09@gmail.com is my id

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