Archive for the ‘business loan’ Category

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How To Finance Your Business With Receivable Factoring

Friday, January 6th, 2012

Do you do business with commercial or government customers? You are also used to waiting up to 60 days to get your invoices paid as well if your answer to that question is yes. When you do business with big companies, one of the most challenging facts is that they tend to pay slowly. Sure, they pay all right – they just take their own sweet time to do it.

Right now, there are expenses that you would have to pay. There are suppliers that you have to pay. Payroll should also be met. A big challenge is what this creates for both small and medium sized businesses.

Do you think the solution for this is a business loan? It seldom is. They are quite difficult to get. And when you get them, your hands are tied until the loan is paid off, since you can only get one loan at a time. This means that you are out of lick if your business grows and you need more money.

If your biggest headache is slow paying customers, a better solution is to factor your receivables. Providing you with the necessary financing to pay employees as well as taxes and suppliers is receivable factoring. Above all, you will be provided with peace of mind by eliminating or at least minimizing your financial worries.

Receivables factoring works on a simple premise. Valuable assets that can be financed are your invoices. Basically, the factoring company advances you money for your slow paying invoices and waits until your customer pays. They would, of course, charge a small fee for this service. This is how this will work.

Your work should be done as usual. You bill your customer but then submit a copy of the invoice to the factoring company for financing

An immediate advance will be provided to you by the factoring company and this will be about 70-90% and there is a 10-30% reserve. In order to meet payroll and pay expenses, you can use that money.

The factoring company is also waiting to get paid by your customer.

When they are paid, the factoring company rebates any reserves and the transaction is settled.

As you can see, factoring gives you immediate money for your slow paying invoices, enabling you to run and grow your business. It’s not that difficult to qualify for factoring. Doing business with credit worthy customers is considered as the biggest requirement. If your customers are slow paying but are good, then you can finance them.

A great tool to finance your business and grow it to the next level is receivables factoring.

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All About Invoice Discounting – Your Alternative In Business Financing

Tuesday, January 3rd, 2012

Does it take your clients two months – that’s right, two months – to pay up? If you are, then you are just like many other business owners worldwide close to pulling their remaining hair out due to the stress this can cause. Sad fact is that even if your business is profitable, that does not always equate to financial stability. Quite the opposite, many times a business may have great profits and a very unreliable cash flow.

Can this be explained? Yes indeed. Most, if not all your clients pay you in 60 days, but you still have other payables such as rent, overhead and payment to suppliers. Although the numbers may work in the long term, in the short term you are left with very little cash. Of course, if you have enough saved up in the bank to cut those losses, this should not be much of a concern.

But what’s a new business owner to do, or somebody perhaps who doesn’t have enough funds in the bank? Should you apply for a business loan? Nah. It’s no joke, though, applying for business loans. A better option would be to use invoice discounting. Invoice discounting, unlike loans that are offered by any bank, are offered by factoring companies.

Invoice discounting is so simple even a child can figure it out – you sell your invoices at a discounted rate in exchange for cash. The ramifications in terms of value are none too labyrinthine, to be honest. Are you willing discount between 1.5% to 6% from your invoices to get paid now? A lot of business owners offer an incentive – a 2% discount if their clients pay them within 10 working days. That last abstraction isn’t much different from how invoice discounting works.

But let it be known that invoice discounting, also known as invoice factoring, is not for everybody. It is believed to be most effective for companies with a profit margin of greater than 15% and intent to use the advance funds to pay for business expenses or opportunities.

Factoring companies would invariably buy your invoices on a two-installment basis. The first installment, referred to as the advance, covers up to 85% of the invoice. The remaining 15% (less the discount) is rebated once the customer actually pays the invoice.

You can easily qualify for and set up an invoice discounting or factoring plan. The biggest qualification requirement is to have invoices from reliable clients. So instead of going bald from stress as your clients dilly-dally when it comes to invoice payment, invoice discounting might just save you money, your head of hair and the aforementioned Rogaine prescription.

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Various Alternative Funding For Businesses

Sunday, January 1st, 2012

Anyone that owns a business is usually faced with various sources of stress and complication throughout the entire process . There are many stresses and complications that are faced when contending with making sure the company stays in operation and profitable at all times. Any company facing this issue and looking for an alternative should know the commonly used alternative funding for businesses whenever this process is under consideration to make sure they are effectively able to find the funds they are seeking.

The course of everyday business operations is largely reliant upon the continual stream of funds that are often readily available for use. The financing aspects of any company are often very complicated to content with as the source of funds can be quite fickle and often challenging to keep maintained at all times. There are many instances where companies simply need assistance in contending with their financial needs.

Business owners facing this need are usually able to find various options available to them for use. There are many instances where this source of funding is known to be quite complicated to obtain for any business that is facing any set of circumstances. There are fortunately quite a few other sources of funding that are available that help any company through their difficult times.

Companies looking for funds should first have an understanding of how much money they actually need. Borrowing cash can become quite complicated when added up throughout the course of daily operations. Only borrowing what is needed helps make sure this lending process is performed in a successful manner.

There should also be as many efforts as possible placed upon the liquidation of all assets. There are many instances where companies have too much capital tied up into the inventory and other items that are currently on hand in the actual facility. This should all be as liquidated as possible to help raise capital at any point in time.

Merchant cash advances are also an alternative means by which funding is made possible. These are advances that are able to offer the option for businesses suffering from credit issues. They are usually very quick and effective means of obtaining extra funds.

Grants are a final source of alternative funding for businesses. The federal government is now known to offer an incredible source of funding options to companies that need help. They are often rather significant in dollar amount and are an effective and easy source of funds when needed.

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