The factoring industry continues to enjoy a double-digit yearly growth!

The stats are in on the total volume for factoring in 2005. Go and read the

Press Release here

Factoring is a powerful form of commercial finance. As business owners learn more about factoring, they will start to understand it is not frowned upon but embraced. The growth speaks for itself. Many companies would not be around if it were not for factoring.

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Do you offer early pay discounts?

Do you provide an early pay discount option to your customers? A lot of companies do offer 2% net 10 or more.

The problem is that many times your customer will take the 2% and not pay in 10 days. It is obvious that increasing your cash flow is the objective; however your customers probably need to watch the cash flow also.

If you are offering an early pay discount you should look into factoring. You may find out that your discount is not much different than what you offer already. Plus the terms do not change for your customers and you are guaranteed the cash within 24hrs with a factoring account.

You can also use the constant cash flow to take early pay and volume discounts from your vendors which may wipe out all of your fees!

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Have questions? Call 888-603-0055!

How did your cash flow this month?

How did your company do this month when it comes to cash flow? Why not let the question go; how has your cash flow been this year?

Did you sweat it out worrying you might not make payroll, get that vendor off your back, pay that tax bill that was due and it was a lot more than you expected?

For those of you that have a line of credit, did you get close to maxing out your line and have concerns that your line of credit is no longer an adequate facility.

For those of you that use your personal money or credit cards to fund your cash flow, did you have moments you thought about getting a loan or a line of credit from the bank because the pressure is mounting, but you are still unable to get the banks to lend you the money.

For those of you that have been sailing on smooth waters lately but you can see the approaching storm on the horizon, but you dread approaching your bank “again” for an increase because they complained the last time because your growth is heavily centered around accounts receivable and they are getting uncomfortable.

Well, you may say that the checks seem to always come in the mail just in time to get you over the hump. I say, just keep throwing the dice, the numbers will not come up one day if you keep pushing your luck!

I could obviously continue with the examples but you get the point. The fact of the matter is that Factoring could be your solution for these and most scenarios when it comes to inadequate cash flow. Get informed about this form of finance and spread the word to your business associates. It could be what they are looking for also!

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Have questions? Call 888-603-0055!

Some Benefits of Factoring!

Did you know that Factoring is one of the oldest forms of financing there is. It enables companies to maximize their cash flow by receiving funds early for their receivables to be used for expansion, payroll, bill paying, or whatever the capital is needed for.

The Factoring process is very simple. You sell your accounts receivables for an immediate injection of cash, so factoring is not a loan. You generally get an 80% advance from your invoice immediately (higher advances are available for qualifying industries).

The remaining 20% (reserve) is paid to your company (minus your fees) when the invoices are paid. It's that simple.

In essence, you are out sourcing your credit and collection department. In doing so, you not only get your money more quickly but you will realize many other benefits as well:

1) Credit Investigation: Provides a safety net minimizing risk of doing business with slow-pay or no-pay customers. Through risk management your losses are minimized

2) Invoice Ledgering & Accounting: The Factoring company provides your company with full accounting of all activities done on your behalf with a simple ledgers, some Factoring companies have online access that allows this information to be downloaded from your on secured web site directly into your company booking software, thus reducing accounting cost.
3) Immediate Funding: Usually 80% of the invoice is funded within 24 hours.

4) Follow-up & Collections: The Factoring company follows up on the invoices to affect timely payments, which reduces your personnel and factoring cost. (time is money)

5) Aging & Other Reporting: Some Factoring companies have a State of the art reporting service available on a customized web site that you can access 24/7 .

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Have questions? Call 888-603-0055!

Thanks for reading and have a great weekend!

What kind of Companies Factor?

Companies factor their invoices for many of reasons. It has been a major source of revenue for start up and rapid growing mature companies because it helps them manage their receivables and use the cash flow it produces to fund growth. But there are additional reasons.

A company that is not yet or no longer Bankable: It might be new, have credit or tax problems, or it might be "too thin" for consideration by conventional bankers. Factors routinely work through all of these issues to a satisfactory and economical solution for our companies of all sizes.

A company might be in or have been in Bankruptcy: Frequently a viable business, for legitimate reasons, has had to file bankruptcy. While conventional bank lenders will not consider them, factors may.

To Get Larger Contracts: By factoring their receivables, a company can purchase materials and labor necessary to perform where they might not have otherwise been able to.

To Qualify for Discounts: By purchasing in larger quantities, a company can often save enough by purchasing bulk to more than pay for the factoring cost. Include early pay options and this can wipe out all factoring cost.

To Reduce Clerical Overhead: Very simply stated, companies frequently cannot perform all the services that a factor can provide.

Direct Focus: Clients can focus on looking ahead while a factoring company manages collection.

Factoring is a simple and cost effective solution to all the above scenarios and more.

Why, then do all companies not factor? Because not all are structurally able.

Remember, Factoring is not a loan; it is actual purchasing of the client’s credit worthy invoices.

If a factoring company cannot take title to them, they will not purchase them.

Examples include UCC Filings by banks, IRS, or others which take actual title to receivables. Other examples include liens on invoices, guaranteed sales and government invoices where they reserve the "right not to pay". However UCC filings by banks and the IRS can sometimes be subordinated.

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Know your Factoring Company!

Last month I posted a blog titled "Factoring Warning Before you Sign" you may want to read this post By clicking here

If you are thinking the post was to try and get you to use one of my recommended factoring companies, you are absolutely correct, however it is with reason.

I get paid by my factoring companies, so it is important that I deal with highly qualified factoring companies with a strong financial backbone which is managed by solid individuals. I know who they are and how they are financed. I hope you find value in this fact.

It is hard these days to trust people, and I can't force you to trust me. I can however try to give examples to back up the things I write about in hopes you will see my motives are to educate you about the Factoring Industry and in return, deserve a chance at your business.

So, I want to give you access to an article to help back up my Factoring Warning post. It is titled Who's to Blame?

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Can Factoring Make You Money?

Simply put, factoring helps businesses meet their cash flow needs by providing accounts receivable financing and management services. Many people view factoring as a short-term stopgap to plug the working capital hole that inevitably presents itself in almost every growing business. Although factoring can many times help a business refresh its working capital in the midst of a ‘cash crunch’, it can actually be a highly profitable long-term strategy. With adequate cash flow, a business has the ability to not only avoid stoppages in business, but to increase customers and sales. Cash flow is the lifeblood of any business and with out it, regardless of profitability, a business can cease to exist.

Factoring is one of the few forms of financing that can support rapid growth in a business. As the receivables increase, so in turn does the funding. Therefore, it stands to reason that by reducing working capital requirements, a company can more rapidly reach their long-term growth plans. The net effect is increased sales, increased production, and decreased stress.

Factoring is typically more expensive than traditional financing, however, the cost of factoring is usually significantly less than the loss of net profits that would have otherwise been generated by the substantial growth that it supports.

Next week I will talk about ways you may be able to use factoring with almost no cost at all.

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Thanks for reading and Happy Easter!

Questions about Factoring?

It seems to be human nature that once we do something over a period of time it starts to come natural to us. We tend to forget that the things we understand so well is understood by all.

Well that is obviously not the case.

I have been guilty of doing that in my field of Factoring, so that is why I am posting this topic. I want to make it very clear that if you have any questions at all about Factoring, please do not hesitate to call and ask me. No question is a dumb question, this form of finance is far to powerful for you not to explore it to the fullest and find out if it can benefit your company. It may be the solution you have needed all along.

If you already understand Factoring and are ready to get an account opened and just need to find the right Factoring company to partner up with, why not let us help. Get a free quote by Clicking this Link

If you are currently with a Factoring company and want to explore your options you may want a free quote by Clicking this Link We will get you access of up to 3 free quotes from a list of our highly recommended Factoring companies.

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Thanks for reading!

Factoring in the Gulf

Factoring services are being launched in the Gulf, check out this article

Factoring is a powerful form of commercial finance that can put immediate cash in your hands by using your accounts receivable.

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Thanks for reading.

Do not forget about the Previous post and Archives!

The goal and purpose of doing this blog about the Factoring industry is to help my readers get a better understanding about this powerful form of commercial finance. I also hope to get a chance to earn your business if the information helps you determine you may be a candidate for opening a Factoring account. I can't stress enough how much I recommend the Factoring companies I do business with and Free quotes are always available.

I also do not want the content of this blog to lack in information, tips and good ideas. That is why I am suggesting you make sure you look back at all of the past articles in previous post and archives. You may find that one blog that provides you with valuable information.

Factoring is unknown to many business owners and many need to know it is available. So please share the fact that this blog exist with your colleagues.

I hope you have a wonderful weekend.

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Thanks for reading!

What's A Growing Business To DO?

On this post I am sharing an article written by Mr. Larry Stephenson. He is with one of my highly recommended factoring companies. It is a worthy read, enjoy:

Consolidation in the banking and commercial finance industry has made it even harder for the small to medium size business to be successful. Let’s put aside for our purposes here all the other challenges this group of entrepreneurs’ face.

The big banks have no interest in the small manufacturer, distributor or service provider because lending to him or her is just too risky in their eyes. Wall Street would punish them severely for not posting ever increasing earnings as well as operating efficiencies. The big banks must stay in their comfortable environment of lending only to the nearly risk free companies or to the consumer where fees and costs can be readily passed on to the user.

Well then, would it not make sense that if the big banks don’t want the small to medium enterprise then surely the ever growing population of small community banks would embrace their needs. Today these new community banks are popping up seemingly on every busy corner near large shopping areas. Unfortunately, I’m afraid you can’t look for help here unless all you’re looking for is a fully collateralized real estate loan. Safeguarding deposits and making real estate loans are their stock and trade. Loans to actually support the success of these smaller enterprises we’re discussing are not made here. The doctors, lawyers and real estate people who form their board of directors are the original bank investors and they are looking for steady conservative growth. Growth, safe growth, which will someday in the future provide the owners with a payday when they sell to a larger bank who will then sell to the "Big" bank.

It’s nearly impossible to sustain or find a business opportunity, other than at the retail level, where the entrepreneur can provide all of the cash needed to run and grow the company. The small to medium business enterprise needs working capital financing in almost every case. Success in this size business is its own worst enemy as far as working capital needs is concerned. Growth in sales requires increases in inventory levels to support this very growth. And, success in growing sales directly multiplies the investment needed in accounts receivable as well. Success in business, as you can see, is directly related to the accompanying growth in accounts receivable and inventory and the inherent need for outside working capital borrowing. Does it not then make sense to find a way to margin the realistic values of these receivables and possibly inventory in such a way as to support this growth?

The important job of providing working capital for these companies rests with the factors and finance companies who best understand these businesses and their borrowing needs. As touched on above the opportunity to provide this financing is the product of the banking industry abandoning these entrepreneurs for, in their mind, more fertile ground.

The factoring and finance company industry is made up of a few very large players and a large number of smaller niche players with individual areas of expertise. The large players, even in this financial sector, have become so large they too are ignoring the needs of the small to medium business. They now prefer to only do business with companies with revenues in excess of $10 to $15Million. They also steer a wide path around enterprises just starting up or facing financial difficulties whether these difficulties are determined to be short lived or more serious.

The real task or opportunity to finance these businesses with revenues under $15Million or experiencing short term financial stress rests with the medium to smaller national and regional factoring and finance companies; which would appear to be a good match of needs and similar sizing.

These sources of finance have the financial strength to support the growth and working capital needs of their borrowers. The primary reason they are able to do what the bigger institutions shy away from rests with the attitude of their senior management. These individuals are able to look at struggling companies and approve a borrowing facility that takes into consideration all of the pluses and minuses. The loan can be made if the borrowing company has good, honest management willing to continue to work hard to be successful. They are able to look deeply into the company and its management finding innovative ways to structure the loan even when the company is losing money or the IRS or other challenges stand in the way. With the proper structure they can work with companies having financial difficulties until they have overcome these difficulties or grown to such a size that they can now borrow from the larger institutions.

Companies finding themselves in such a situation need to seek out this caliber of financial support. Usually one of your trusted advisors can get you in touch with such a company. Your accountant or lawyer or even a friendly competitor should have knowledge of where to secure this financing. You may even be able to obtain this knowledge from the bank that has declined your most recent request for financing.

Don’t despair, there are lenders out there very much interested in the success of these manufacturers, distributors and service providers and willing to provide the working capital financing needed to grow the business.

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April Fools Day and your UCC filing!

Every year I have this competition with my Mom on April fools day, she tries to get me and I try to get her.

Oh come on, no way can you fall for an April fools joke every year knowing it is coming. Well every year I think that, but some how she always seems to set the trap and I step right in the middle of it. I spend all day avoiding the snare and before you know it I am hanging upside down, dangling from the rope as we both howl in laughter at my annual defeat!

What does this have to do with my UCC filing you ask? Well let me tell you:

Just like my annual defeat at the hands of my Mom, several times a year we experience an April fools joke in the Factoring industry, and it is not always April.

To Factor your receivables, the Factoring company must have a UCC-1 on your Accounts Receivable. We will ask up front if any financing is currently in place. Many times the answer will be yes and we will ask if the Accounts Receivable are pledged as collateral (UCC-1) and the answer will be a no.

A search will be done for liens and APRIL FOOLS a UCC-1 will show that there is indeed a lien against the Accounts Receivable.

Now, I am not implying this was done intentionally. The applicant was not aware that the bank applied a blanket lien to cover the loan or loc.

If you currently have a loan or loc in place and still need additional working capital, Factoring can be the solution you need. Just double check your UCC filing to make sure your receivables are available, it can save you much hassle.

Please take note that a UCC-1 against your Accounts Receivable does not mean you will not be able to Factor. A subordination (release) or a buy out is done on a daily bases in the Factoring industry. Knowing this up front however will help the Factoring company better determine your chances of this.

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