Factoring For The Small Business

Cash flow is critical to all businesses, but it can be of particular importance to small to medium-sized businesses that have been only been established for a few years. They often find themselves in the working capital 'trap' of having plenty of potential business opportunities, but not enough cash available to exploit them. Factoring can be the perfect answer in this situation.

Factoring provides cash for the business as soon as an invoice is issued. It also has substantial benefits in terms of reducing management time spent on accounts receivables. There are two other important aspects of factoring that are useful to the growing business:

- They do not require personal guarantees

- They work with your customers' creditworthiness, not your own

How does factoring work?

After the initial setting up of your account with a factoring company, you will issue invoices in the normal manner, but they will be stamped to show that they are payable to the factor. The factor will then provide you with immediate access to funds, typically about 80% of the face value of the invoice. The balance will be credited to your account (less a small service charge) when the cash is actually collected.

From that point on, the factor will take over responsibility for managing your sales ledger and accounts receivable. The very fact that they are involved will usually bring about a reduction the time taken to pay invoices, as supplier know that factors often report delinquent payment performance to the major credit reporting agencies, whereas companies supplying the services do not.

Factoring companies are very careful about selecting and training people to handle collections professionally, as they are acutely aware that the task must be handled sensitively but firmly. They understand that customers are the lifeblood of your business, and that they need to maintain their goodwill toward you.

A good partnership with a factoring company can be one of the most valuable assets of a developing business, particularly in the early years, when there can be a danger of over-trading if adequate working capital is not available.

Andrea Lucas is CEO of Celera Financial, LLC, and has over 20 years? financial experience working with small and medium-sized businesses, both internationally and in the USA. Andrea can be reached by email at info@accountsfactoring.com or call (703) 651-3168. Website: http://www.celerafinancial.com

Factoring invoices| accounts receivables| invoice factoring company

Factoring, invoice factoring, or accounts receivable financing means selling your company's invoices at a discount to a finance company for immediate capital. Factoring makes it possible for your company to utilize funds that otherwise would not be available during a normal billing cycle.

In other words, invoice factoring or selling of an {a rel="nofollow" href= http://www.magfinancial.com/faq.cfm} accounts receivable invoice to a "factor" helps your business obtain the cash flow it needs. Prior to that there are a few key points to be emphasized:

* Elimination of bad debt: A non-recourse factor presupposes the risk of bad debt, thus eliminating this expense from the business' income statement.

* Invoice processing: In invoice factoring, "factors" usually handle a majority of the work associated with processing invoices. This includes posting invoices, depositing checks, producing regular computer reports and entering payments.

* Unrestrained capital: Invoice factoring is the only source of financing that grows with your sales. This means that as sales increase, additional money becomes instantly available. In this way, your business constantly grows and is also able to meet increasing demand.

* Advantage of timely payment: In your business transaction you can save 2 - 5% of your raw materials cost since you have the money to pay within ten days. In addition to volume purchasing, you can considerably lessen the true cost of factoring.

* Avoid early payment discounts to your clients: Since you are receiving your money without delay, you do not have to offer early payment discounts. Factoring will save you every dollar in discounts that your clients are currently taking.

* Don't give up equity: Invoice factoring ensures that you do not have to give up any equity in the company or take on any partners with factoring.

* Don't invite any additional debt: People have a misconception that factoring is a loan. This is not true; {a gref= http://www.magfinancial.com/factoring.cfm }invoice factoring<a/> is not a loan. Therefore, your business will not incur any additional debt.

In invoice factoring, the first transaction usually takes 3 to 5 days. Once the account has been set up, cash can be advanced toward your invoices to your bank. People mistakenly believe that there are monthly obligations with invoice factoring. As factoring is not a loan there is no debt repayment. Moreover, you are in control of how much you factor and when, depending on your personal {a rel="nofollow" href= http://www.magfinancial.com/cash-flow-program.cfm}cash flow needs.

If you are looking for an invoice factoring company that will help your company grow, then Magnolia is there for you. For more information on factoring, factoring invoice discounting, invoice factoring company and receivable management, please visit www.magfinancial.com.

Mr. Scott Stevens is well known author who writes about financial services such as cash flow programs, account recievables, factor recievable etc. Find more information about magnolia financial service at www.magfinancial.com

Funding Your Business With Factoring Financing

Factoring financing is one of those business financing tools that is not well known by the general public but widely used in the business community. It is widely used, because it?s easy to implement, can be set up in a few days and can provide the working capital that a business owner need to grow their business.

When a business owner needs working capital, the first thing they do is to visit their banker. However, they soon learn that getting funding from a bank is very hard. As an owner, the bank will demand that they have great personal credit. The bank will also want to see three years worth of audited financial statements ? showing a profit.

If your business is new, it?s close to impossible to qualify for bank financing. However, factoring may be an alternative that is better for your business, and easier to get.

If you have clients that take 30, 45 or even 60 days to pay their invoices, and if this is hurting your business, invoice factoring can help. Factoring can provide you with a substantial advance on your invoices, providing the working capital you need to pay suppliers and employees. And, as opposed to conventional business loans, receivables factoring is easy to obtain.

Factoring is also easy to integrate to all businesses. This is how a transaction looks:

1. You deliver the goods or services

2. You invoice your client

3. The factoring company advances you up to 85% of your invoice as a 1st installment. You can use these funds to pay suppliers and employees

4. Once the invoice is paid for, you receive the remaining 15% less the factoring fees.

Most factoring fees range between 1.5% to 3.5% based on certain criteria, but different factoring companies assess their fees differently. The biggest criteria to qualify for factoring is that you should do business with customers that pay their invoices reliably, such as government agencies or large corporations.

One of the biggest advantages of factoring financing is that it is tied to your sales. So as your sales grow, your financing also grows. This makes it an ideal tool for companies that are expanding.

About Commercial Capital LLC
Looking for a factoring company? We can provide you with factoring and accounts receivable factoring at competitive rates. Please call (866) 730 1922

Benefits of Factoring Receivables

If you sell goods or services to commercial or government accounts you are very familiar with the fact that you have to offer your clients 30 to 60 days to pay their invoices. However, offering 30 day payment terms can be very challenging for business owners who must cover all the business?s expenses while they wait to get paid. This quickly eats up any cash reserves and puts the business in a challenging position. Unfortunately, when it comes to getting paid, hurry up and wait seems to be the name of the game.

But there is a solution to this problem that you won?t find at your local bank. It?s called accounts receivable factoring. It has the following benefits:

1. It gets your invoices paid in 24 hours, eliminating long payment waits

2. Factoring is easy to obtain

3. Setting up an account takes just a couple of days

Although factoring provides your business with working capital, it is not a business loan. It is an advance on your outstanding invoices. Because of this, factoring invoices is easy to obtain provided that you do business with reliable customers. Furthermore, invoice factoring easily integrates into your company. It works as follows:

1. You deliver the goods or services and invoice your client

2. You send the invoice to the factoring company, who advances you up to 85% of your invoice as a first installment

3. You get to use the funds to pay business expenses, while the factoring company waits to get paid by your client

4. Once the factoring company gets paid, it rebates the remaining 15% as a second installment, less a small service fee

Factoring service fees vary based on a number of variables, such as monthly factored volume and how long it takes for an invoice to get paid. Based on these, fees can range from 1.5% to 6%. Generally speaking, factoring is very affordable if your clients pay their in 45 days or less.

Factoring invoices is a great alternative for startups and established companies that have exhausted their bank resources. It?s a flexible product that is tied to your sales performance, this means that you will not get a fixed line. If your sales increase, so does your financing. This makes receivables factoring, an ideal product for growing companies.

About Commercial Capital LLC

Are you interested in working with a factoring company? We can provide you with accounts receivable factoring and receivable factoring at competitive rates. Please call (866) 730 1922 for more information.

 

 

Accounts Receivable Factoring Companies

As an owner of a company, you may have felt frustrated because your cash is tied up in fixed inventories and so you don?t have enough cash flow to energize your business. And keeping track of the invoices and the slow payments may distract you from the more pressing needs of your business.

You approach a bank for a loan, but don??bf?t get it. Then, in this scenario, the best option for you is to approach an Accounts Receivable Factoring or Financing Company. An Accounts Receivable Factoring Company will purchase your Accounts Receivable, such as invoices, at a discounted rate. This means that it will purchase them for less than the face value of the invoices. The seller company gets the cash, and the responsibility of collecting the money due becomes that of the Factoring Company. The Factoring Company collects the cash at the face value of the invoices, and thereby makes profits.

Apart from the Accounts Receivable Factoring Companies, there are also the Accounts Receivable Financing Companies, which function a bit differently from the Accounts Receivable Factoring Companies.

These Financing Companies offer loans by taking the invoices as collateral. This means that they don??bf?t really purchase the invoices. They just issue loans against them. This also means that the responsibility of cash collection lies with the business company, not with the Financing Company.

Both Accounts Receivable Factoring Companies and Financing Companies charge additional fees for their services. But the fees involved with the Factoring Companies are more than those from Financing Companies. This is because the responsibility of cash collection is also with the Factoring Company.

Accounts Receivable Factoring provides detailed information on accounts receivable factoring, accounts receivable collection, accounts receivable factoring companies, accounts receivable financing and more. Accounts Receivable Factoring is affliated with Accounts Receivable Collection

Is Your Freight Company Stuck In Neutral? Finance It With Factoring

Growth in the trucking industry is all about freight volume. The more freight you move, the faster your company will grow. But big volume comes with a catch ? slow paying customers. Unfortunately, waiting 30 to 45 days to get paid is very common in the industry.

But what if you cannot afford to wait 45 days to get paid by your clients? What if you need to buy fuel, pay drivers or pay for repairs? Employees and suppliers seldom like to wait to get paid.

Needless to say, going to the bank for financing is not an option. They usually do not like to finance small and mid sized businesses. Unless, of course, you have tons of assets, three years worth of financial statements and you have great credit.

So, now what? What are your options?

If you own a trucking company, there is a solution that will provide you with plenty of financing. And as opposed to bank loans, this financing is tied to your freight bills. The more you invoice, the more financing you qualify for.

This solution can provide you with the necessary funds to buy fuel, pay drivers and pay for repairs. And it is available to freight companies of any size. The solution is called freight bill factoring (or freight factoring for short).

Freight bill factoring works as follows:

1. You deliver the freight and invoice your customer
2. You send a copy of the freight bill to the factoring company
3. The factoring company advances you up to 90% of your invoice (10% held in reserve)
4. Once the factoring company gets paid, they rebate you the remaining 10% less their fees

As opposed to bank loans, factoring has no arbitrary high limits. You can factor as many freight bills as you can generate. So, as your company grows, so does your financing.

Factoring is a great tool to finance growing trucking companies that need money to grow. It allows you to take on new opportunities to drive your company to the next level.

About Commercial Capital LLC We specialize in business financing. We can provide you with a free freight bill factoring, freight factoring or invoice factoring quote. For an immediate consultation, call Marco Terry at (866) 730 1922 or http://www.ccapital.net/html/freight_factoring.html or http://www.ccapital.net/html/business_financing.html

Structured Settlement Factoring

Have you received a structured settlement recently? A structured settlement can be a good thing if you have been a victim of malfeasance, have been severely injured or can no longer physically work. Structured settlements will help you pay bills. But what do you do if you have a structured settlement, which is coming your way and you really have decided that you might prefer to have the cash instead? Well, if this is the case you are in luck because there are companies, which will buy your structured settlement for a discounted price?

This is similar to factoring which is used in businesses, which need to maintain their cash flows. They can sell accounts receivables to another company as an investment and get the money that is owed to them in advance. For instance let’s say a company, which does janitorial services for a government agency, which are notoriously slow to pay and that government agency owes them $30,000 for services already completed? A factoring company will buy that check which is in the mail so to speak for $25,500 and give the money to the company now. You may say well that is 15% of the $30,000; yes it is, but if a small business does not get the money in time they could go out of business because the government is so slow to pay on their contract. Going out of business is not a good thing and if it happens all the money invested and time to build the business is out the window.

Let us say you have a structured settlement and you cash out of the deal using the same type of company? They will get the structured settlement money each month istead of you, but you will have all the money up front minus a 10-15% discount on the total money you would have received. You can then use this money for whatever you want. Such as investing, buying a house or buying new car, plasma TV and other things humans want to make them happy. You see?

"Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/. Lance is a guest writer for Our Spokane Magazine in Spokane, Washington