You know those days when you really love what you do for your career. This article is about just one of those days. I did a deal for a client that Discount Factoring was the absolutely perfect option for his business and everything went off without a hitch.

The client services the major industry providers for Telecom in the country. Over the last 3 years he has been a two man operation. Due to some changes in that industry, they are just starting some major overhauls of systems and that is what this mans company does. Since he had been working with these companies for the last few years and they like his work he has become a preferred supplier of service for them.

On the outside looking in it looks like a great success story, right? Consider this. Now he has to hire more staff, more equipment and travel more. The terms of collection are net 60 so it will be 2 months before he gets paid for services rendered today. He has to pay for supplies net 30 and the employees are to be paid bi-weekly.

This is a common problem of cash flow, and is a major hurdle for companies when they experience rapid growth. Of course the first reaction is to go to the bank and get an Operating Line of Credit. Unfortunately, the bank did not look favorably on the application and denied it promptly as there was insufficient financial data to satisfy the bank guidelines.

The Solution: Small Business Factoring. I set the company up with a Line of Credit using the Accounts Receivable as security and the advance rate is 85% of what ever he has in open AR.

It took less than 1 week from the time I received the application until it was funded. The client was very pleased and now he can do as much work for the Telecom Industry as they want him to do without fear of now being able to have the cash flow to sustain the funds sitting is AR.

Author: Wade Henderson

Wade Henderson

Wade Henderson is a recognized Expert in Business Finance with over 14 years Experience in the Commercial Lending Field and a strong reputation for getting the deal done. Visit his Commercial Finance Website to put his experience to work for you.

Discounting Factoring * Commercial Factoring * Receivable Factoring * Invoice Factoring

Be sure to View Pro-BargainHunter.com and IMMFinancial.com for more information.

Article Source: http://EzineArticles.com/?expert=Wade_Henderson

The Factoring Loan

Factoring-Loan.net was created as a forum to help get the word out and provide a resource for companies to refer to to assist with this process. Factoring Loan | Invoice Factoring | Discount factoring | Accounts Receivable Factoring

Discount Factoring

Today I had the pleasure of putting together an Invoice Factoring deal for a client that was the perfect solution for his company. These are the days I really like and that make me feel good about my career.

Small Business Factoring

by Wade Henderson. You know those days when you really love what you do for your career. This article is about just one of those days. I did a deal for a client that Discount Factoring was the absolutely perfect option for his business

Technorati Tags: account receivable, discount, factoring, loan, loans, small business

Small Business Financing with Factoring

Financing a small business has always been challenging. Read this article to find out if factoring financing is the right solution for your small business.

Small business owners have always had a tough time obtaining financing. Simply, most small businesses just can’t qualify for conventional business loans. The requirements are too onerous – the company must have sizable assets, multiple years of profitability and many times, it’s financial statements must be audited by a 3rd party.

Most business owners consider that a business loan is their only business financing alternative. When they get turned away, they give up any hope of obtaining financing. What most small business owners don’t know is that they do have alternatives – and – many times those alternatives can work better that conventional financing.

Let’s take a common cash flow challenge. Companies that sell products or services to other businesses usually have to wait between 30 and 60 days to get paid for their services. So, they incur the expenses of delivery immediately, but then wait a long time to recoup their investment. While this is fine for companies with adequate banking reserves, it is one of the major challenges that business owners face today. As a matter of fact, few startups plan for the fact that it takes 4 to 8 weeks to get paid, which not only limits their growth opportunities, but challenges their very survival as a business.

Now, most business owners would consider that the only solution to the previous problem is to get a loan or a line of credit. But there is another option – it’s called factoring financing. Few people have heard of it, so not many owners consider it if they fail to get a business loan.

Invoice factoring offers a very simple solution to the slow payments problem. Let’s say that you sold $10,000 worth of consulting services to a company. And let’s say that they’ll pay the $10,000 in about 45 days, which is the industry average. Now, what happens if you can’t wait because you need to meet payroll or make supplier payments? Well, you could sell the invoice to a factoring company. The factoring company would buy it from you in two installments. The first installment would be for 80% of the invoice, or $8000 in the case of our example. This is paid at invoicing.

The second installment, paid to you when your client actually pays the invoice, is the remaining 20%, less a fee. Using our example, it’d be $2000 minus the cost of the factoring service.

So factoring invoices offers you the following proposition: an immediate advance of about 80% at time of invoicing, and a second advance for the reminder (less fees) at the time of actual payment.

As you can see, factoring provides the needed working capital to meet business expenses without worrying about when your client will pay. It provides you with predictable cash flow, positioning your business for growth. And qualifying for factoring tends to be relatively easy. The biggest requirement (though not the only one) is that you must have a good roster of clients.

About Commercial Capital
Looking for factoring financing? Commercial Capital can provide you with a competitive factoring quote. To learn more about our invoice factoring program, please call (877) 300 3258

By Marco Terry Published: 8/27/2008

Invoice Factoring – Terms and Functioning

Simple accounting solutions are most suitable for small business.The most comprehensive financial accounting packages incorporate financial reporting information and managed by teams of qualified accountants supported by accounts clerks

Small Business Financial Services For Retirement Planning

US Business Finance Corp’s financial services programs serve business owners’ credit card sales, cash advances and your long range retirement plans.

How to Make Extra Money When Business is Slow

Additionally, credit card and finance companies often hire people to pass out information and collect applications. Legitimate gigs can sometimes be found on Cragslist but they can also be found on regular job searching sites. … A great place to look is within one’s current industry. Anyone can call around to small businesses and see do they need any help within a special area. Small business owners often outsource projects that they do not have time for.

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Both factoring and invoice discounting can be described as ways to get immediate cash by selling accounts receivable to a third party, usually a finance company. In fact, the two methods are more similar than they are different.

Factoring, also referred to as asset securitization, is an outright sale of receivables to the finance company. The business gets cash and the finance company collects the debt, keeps the interest and gets a discount fee on top of that for its trouble. Invoice discounting can also be termed a sale of receivables, but in this case administration of the receivables and their collection does NOT change hands. The business that earned the income still holds that responsibility.

Here are some questions to consider in order to choose which method is best for your company:

1. Are you concerned with the cost of collections in your company? Are they getting out of hand? Is your collections area fully staffed with competent and reliable personnel? If you think your company would be better off reducing the amount of resources devoted to this function, factoring is the better choice for you, as a lot of it, but not all, can be offloaded to the finance company. If you already have a well-working collections department you might rather choose invoice discounting. That way your staff and procedures regarding collections remain in place.

2. Knowing that the finance company will undoubtedly treat your customers with the utmost courtesy, respect and professionalism, are you nevertheless concerned that he may prefer to be dealing directly with your company? Perhaps billing requests often come together with customer service requests. Your customer is generally not aware of the sale of his receivable to you with invoice discounting. Not only is he aware of a factoring arrangement, but also he is subject to confirmation calls on individual invoices by the finance company on occasion. If this is something you know would disturb your customers you may need to choose invoice discounting.

3. What are your current informational needs with regard to collections efforts and your customers? Do you currently collect this data and rely on it to make future credit decisions for this customer? Can the finance company provide it in the format and frequency you desire? If not, invoice discounting may be the right choice, so all your current data collection techniques will not be disturbed.

4. What are your cash requirements? With either factoring or invoice discounting, you are paying for the immediate cash. Doing the collections yourself at a normal rate would return you more actual cash. But invoice discounting returns you more cash than does factoring. This is, obviously, because the finance company takes on more responsibility and more duties with factoring than with invoice discounting.

5. How large a portfolio of unsecured receivables does your company hold? How diverse is it? Are there any single customers who hold more than 20% of the total receivables balance? Generally, companies using invoice discounting tend to be larger and have a more diverse portfolio. This could be why they chose invoice discounting, however, rather than a characteristic. They already have the collections efforts and data collections methods in place and the cost and difficulty involved in changing them might be prohibitive for a factoring arrangement. Diversity in the portfolio is something finance companies look for under both arrangements.

Making an honest assessment based on these factors will allow you to make the right choice for your company. You’ll soon be on the way to a healthy cash flow, no matter which you choose.

Author: Michael Russell

Michael Russell Your Independent guide to Factoring

Article Source: http://EzineArticles.com/?expert=Michael_Russell

Introduction to invoice factoring discount part 1:

Invoice factoring discounting part 2

Cash Flow Financing

Cash Flow Factoring through HRH Funding Solutions is a fast and easy process. The factor buys the invoice at a discount, usually a few percentage points less than the face value of the invoice. The Drawbacks People consider the discount …

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invoicediscountingcompare.com provides free independent advice on factoring, invoice discounting, trade finance and helps hundreds of clients each year to find the right facilities for their business.

Invoice Discounting For Canadian Companies

The solution to this problem is to accelerate client payments using invoice discounting (also known as invoice factoring). Invoice discounting allows you to break the 45 day payment cycle and reduce it to 2 days.

Invoice Factoring and Discounting

Invoice Factoring is the process of selling on your accounts receivable (unpaid sales invoices) to a third party at a small discount, thus instantly improving your cashflow. Invoice Discounting uses your accounts receivable as …

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