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.

 

 

FACTORING: What's In It for You?

Factoring or Accounts Receivable Financing is a tool for providing working capital and cash flow to businesses of all sizes and in all industries. It is especially useful for startups and for small, minority, women-owned and / or disadvantaged companies. There are many reasons why Factoring should be considered. Below I have highlighted some of the benefits.

QUALIFYING: If you're a start up or already have significant debt, you can still qualify for this financing. Funding is based on the financial strength of your customers. SPEED: the initial application process is fast, usually within a week. Then, as you generate and submit your invoices, CA$H is deposited into your bank account in 24 to 48 hours. PREDICTABLE: You have access to a steady, predictable cash flow. Invoices can be submitted daily. CONTROL: No longer do your customers determine your cash flow. No longer are you held hostage to the whims of your customers. And you are freed of credit term abuses. UNLIMITED: Virtually unlimited funds are available. We try to match you up with a factor / funding source that can handle current and future growth. But, in the unlikely event that you do exceed the capabilities of the funding company, Noble Finance$ will assist in converting your account so that you have uninterrupted cash flow. COST SAVINGS: Factoring clients have the ability to take advantage of early payment discounts from their suppliers. Additional savings are made when you can take advantage of volume discounts. These savings can significantly offset the factoring expenses. GOODWILL: Paying suppliers on time improves vendor relations and fosters good will. Suppliers are incented to provide better and more timely goods and services. This is a win-win situation. Vendors are better able to survive and support your expansion and growth. GROWTH: Factoring provides the working capital you need to fund business fund growth in general and to fund new lines of products or services, in particular. DIFFERENTIATION: Without concerns about cash flow, you can attract more business by offering better terms on your invoices. Most companies negotiate on price to win business in a competitive market. Factoring allows you to negotiate with terms instead of, or in addition to price. SCALABLE: Your funding grows as your business grows. No need to re-apply for a new or increased loan or line of credit. PEACE OF MIND: Get freedom from worry about how to meet payroll and pay tax obligations. You'll have sufficient working capital to eliminate these concerns. COLLECTIONS: The factor handles the collections. This frees up time spent on collections. Factoring clients generally have faster payments, since customers tend to pay financial entities faster than they pay other corporations. FLEXIBLE: No obligations, no minimums, and no maximums. You can control some of the factoring fees by waiting to submit invoices.

Noble Finances: Accelerating Cash Flow. Sandra Noble, CPIM, MBA, DCFS, CDP is president of Noble Finances, which is a division of Noble & Associates Consulting, Inc. Noble Finances helps companies Turn their Accounts Receivables into CA$H Now! See http://www.GetCashFromReceivables.com/

Growing Your Supply Company With Medical Factoring

Medical supply companies in general are very profitable enterprises. However, most medical supply companies operate on a very tight cash flow. Unfortunately, the challenging billing procedures and slow payment cycles of insurance companies, HMOs and Medicare/Medicaid create a situation where many companies wait 30 to 60 days before getting paid.

Cash flow can get even tighter if the company?s sales grow, or if the owners decide to open new locations. When this happens, most company owners try to obtain bank financing through a loan or line of credit. However, qualifying for bank financing is incredibly challenging as they will only lend money to a business that shows profits for three straight years and can provide audited financials.

There is a financing alternative in the healthcare industry that has been used with success with medical supply companies. This solution provides you with quick financing based exclusively on your sales. Furthermore, since financing is tied to sales, the line of financing grows as your sales grow. The solution is to factor your medical insurance claims using medical receivables factoring.

Medical factoring provides you with immediate financing based on your slow paying insurance and Medicare/Medicaid claims. Rather than waiting 30 to 60 days to get paid, with medical factoring you can get paid in a few days. This frees up significant cash, allowing you to finance operations, and more importantly, to buy supplies and fuel new sales.

As opposed to bank financing, where the bank lends you money, the factoring company buys your invoices and pays you immediately for them. The process is fairly straightforward. But more importantly, this also means that you are free from the traditional bank lending requirements. Medical receivables factoring is easier to qualify for, and often, the owners? personal credit is not a consideration.

Factoring your medical receivables can be an ideal solution for your medical supply company if your main challenge is that you cannot afford to wait up to 60 days to get paid by insurance companies. If that is the case, medical factoring should provide you with the working capital you need to operate and grow your business.

About Invoice Factoring Group - http://factoring.qlfs.com We can provide you with a free medical factoring, medical receivables factoring or invoice factoring quote for your healthcare company. Marco Terry, the president, can be reached at 1 866 730 1922 or at http://factoring.qlfs.com/html/medical_offices.htmlCommercial Capital LLC.

Why Try Factoring?

When you engage in factoring or selling your accounts receivable, you're accepting less money for an asset than you might expect to get for it. But there are great reasons for factoring and here are 10 of them:

1. The ready cash you'll get by factoring will help your company to grow. If you have $2000 ready cash in the bank, but you've invoiced for $100,000 down the line this will lead to $75,000. Think about it: the ability to hire more necessary staff, buy needed equipment, and have stock on hand could make a real difference to your business.

2. Ready cash can help you pay your suppliers sooner, helping you negotiate discounts and have a larger credit line than you had before.

3. Factoring your current invoices gives you the capital to take on large, deadline-oriented contracts and orders that you'd otherwise have to pass up because of slow cash flow.

4. Those large accounts are worth money. Having cash on hand now allows you to offer longer payment terms to the new large accounts.

5. Out of marketing comes business. With ready cash you can get from factoring, you can buy billboards, newspaper and radio ads, and even have direct mail campaigns for those timely marketing campaigns.

6. If you've invoiced too much and now are finding yourself in a cash crunch, factoring will help you to meet your current expenses right away, reducing the chance of not being able to pay your bills. Nothing is worse for your company than not meeting payroll; you lose your best employees, and the ones who stay are probably going to be seeking other employment.

7. You can improve your balance sheet with working capital without incurring debt.

8. Pay off limited lines of credit, or lines of credit that are costing you too much in interest and fees.

9. Factoring out slow debts allows you to skip the unpleasantness of making payment collection calls; instead, the factoring company does this for you.

10. If you factor out part of your accounts receivable, the factoring company will give you a free analysis and comparison of what payment terms and credit amounts your customers really qualify for. This is invaluable information for conducting business in the future.

In addition to these ten great reasons to try factoring your accounts, there are a few reasons never to factor your accounts. If you're concerned about late and slow payments without a good reason such as; you've given a thirty-day due date to someone and they take forty days to pay, then factoring is not a good idea. Instead, you should change your business practices to give a shorter due date. If you think your customer won't pay, factoring their invoice out is dishonest, and will win you no points with a factoring company. Do you really want to ensure you have a bad reputation with people who trust you with a large amount of their capital?

If you're in a dispute with a customer and you decide factoring out your invoice is a way out, you're wrong. The customer could simply refuse to pay the factoring company and then sue you, or worse, tell everyone else what a horrible company you run. Face your disputes head on. If you are dissatisfied with the customer, don't do business with them again.

Factoring to sustain a non-profitable business without some hope of profitability in the future is a sure way to drive your self into bankruptcy. Instead, you should let your business die a dignified death. Factoring so that you can remove cash from your business is a bad idea, akin to taking out a dozen credit cards so you'll have money now. When you engage in factoring, you're essentially agreeing to a profit loss; you should only do this if you stand to make more money in the long run.Henry Byers, Factoring advisor - focusing on Receivable Factoring and Invoice Discounting

Factoring Basics

Most sales to commercial clients usually carry 30 to 60 day payment terms. This means that as a supplier, you must deliver your products or services now. However, your client has between 30 to 60 days to pay you.

This creates a significant challenge for owners of small and midsize businesses. The problem is simple. Your clients want to pay you in 30 to 60 days, but you must pay rent, payroll and your suppliers now. As you can see, the math does not work. Unless you have a substantial bank account, this leads to an almost impossible situation.

If you are in this situation, it is also very likely that the bank will not be able to help you. As you well know, banks only lend to businesses that have three years of profitable operations and significant hard collateral. If you do not qualify for bank financing, your best bet may be to consider factoring.

Factoring is a business financing tool that helps business owners who cannot afford to wait 30 to 60 days to get paid by their commercial customers. Factoring provides you with the necessary funds to meet payroll, make rent and pay your suppliers on time.

As opposed to bank financing, factoring is easy to qualify for. The main requirements are that you have a profitable business with a strong roster of commercial clients. For the factoring company, your best collateral is the invoices from your strong customers.

Factoring is also easy to use. It enables you receive a substantial portion of your billings within a day of invoicing. It reduces the time you wait to get paid from 60 days to 2 days. The transaction is usually structured as a two installment sale of an invoice. The first installment, called the advance, is paid to you immediately. The advance can be anywhere between 70% and 90% of the gross value of the invoice. The remaining portion (10% - 30%) is held as a reserve to cover disputes and charge backs. The reserve is rebated as soon as the invoice is paid in full. The factoring company will charge a small fee for this service.

Factoring financing is an ideal tool for companies that are growing and that cannot afford to wait to get paid by the clients. It helps you to stabilize your financial situation and positions you for growth.

Commercial Capital LLC We can provide you with a factoring, invoice factoring or accounts receivables factoring quote for free. Marco Terry, the president, can be reached at 866 730 1922.