Obtaining growth capital has always been a major challenge – and stumbling block – for companies. Many business owners feel that the available options from a bank, basically a business loan or a line of credit, are close to impossible to obtain. Furthermore, most business owners have to go through a loan underwriting cumbersome process that takes weeks only to find out if they qualify. And, more often than not, they don’t qualify because banks have tough requirements and usually demand that the business owner have spotless credit.

However, if you own a business that is selling services or products to good commercial clients, you have an alternative option. And you won’t find it at a bank.

The option is called accounts receivable factoring and it enables you to capitalize on your biggest asset, your invoices from great clients. Factoring provides you with the working capital you need to grow your business and can help you if your biggest challenge is that your customers pay in 30 to 60 days. Factoring provides you with an advance payment, giving you the necessary funds to meet ongoing expenses such as payroll or rent. It eliminates the 60 day wait and gets you paid in as little as 2 days.

As opposed to business loans or lines of credit, accounts receivable factoring is easy to obtain. The biggest requirement is that you do business with clients that are creditworthy and pay reliably. It can work with startups or established companies. Furthermore, accounts receivable financing lines have limits that are tied to your sales. This means that as your sales increase, so does your financing.

Receivables factoring is also fairly easy to use. It works as follows:

1. You deliver goods / services and invoice for them

2. The factoring company buys your invoice and advances you up to 90% (1st installment) of the invoice

3. Once the invoice is paid, the factoring company rebates the remain funds less a small fee (the 2nd installment)

Receivable financing fees vary based on a number of parameters but can range from 1.5% to 3%, making it a very affordable business financing tool. To qualify for accounts receivable factoring, your company must sell goods / services to commercial or government customers and have profit margins of at least 10%.

Author: Marco Terry

Commercial Capital LLC Are you looking for a factoring company? We can provide you with an invoice factoring or accounts receivable factoring quote. Please call (866) 730 1922.

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

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Small Business Factoring

Recently I had a client contact me looking to take out a Factoring Loan. It has been some time since I had heard it referred to as this, but what he was referring to was Accounts Receivable Factoring.

Technically, Factoring is not a real loan; it is an advance on money that your company is already owned. While the accounting guidelines can be argued one way or another, the fact is, when a Factoring Loan is done, the Receivables are verified with the party that owes the money and further verifies that they are going to pay the invoices.

Under this circumstance, the funds that are advanced to the company that raised the Invoices are merely an advance on the funds that will be collected under the short term agreement.

Other people refer to Accounts Receivable Factoring as Invoice Factoring. This is accurate and is only switching out the terms Accounts Receivable for Invoice so there is little confusion over this.

The fact that the US Government is now creating an Invoice Factoring facility or Factoring Loan for many of the suppliers in the Detroit Michigan area is a very positive vote of confidence for the validity and acceptance of Invoice Factoring or the Factoring Loan not to mention the confidence that is now being generated in the economy.

The manufactures of United States and Canada have been torn apart by the recession we are currently in and many businesses have fallen due to the lack of working capital to pay suppliers, payroll and other operations expenses that the businesses need to support regardless if there are collections on their Accounts Receivable or not.

Unfortunately several companies in the manufacturing industry have not been able to make it through our recession, many of which were generational family businesses and they suffered to the point of closing down. I know of one such company that was started in 1937 by the Great Great Grandfather of the owner that had to close the doors of the family business due to cash flow problems.

Whether you call it a Factoring Loan or Invoice Factoring or something else along those lines, be sure to take advantage of this Financing method for your business.

Author: 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

Invoice Factoring – Learn About Invoice Factoring Financing

The blog covers the postings and comments of Marco Terry, an employee of Commercial Capital LLC, a leading factoring company, and its subsidiary, Invoice Factoring Group. You can also read this other blog about purchase order financing.

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Invoice Factoring for Dummies

An explanation and history of the most popular form of business financing; invoice factoring.

So what is Invoice factoring?

Many people do not understand this term. Invoice factoring is a very old form of financing, perhaps the oldest. For over 4000 years people have used some for of factoring. In fact, Hammurabi the king of Mesopotamia was the first the implement this system although it was in primitive form. The Romans were the first to issue actual promissory notes at a discount. The first documented use of factoring was in the pre-revolution American colonies. London bankers would advance funds to the colonies for raw materials and then collect on arrival.

Invoice factoring as we know it today is a type of business financing that allows businesses to circumvent traditional means of funding. Methods such as bank loans and private investments are less preferred because of their restrictive stipulations and their long approval times. To get invoice funding you need invoices that can be factored. In a sense you the company are selling your debt for money now.

Depending on the financing company you could be approved in as little as 24 hours. Transfac capital for instance has some of the fastest approval rates around. Even though you may lose a small percentage your debts you will not have to worry about those clients paying you because it is no longer in your hands. Invoice factoring is a popular method of financing and it is clearly not going anywhere, the only thing that may change is the rates so get your invoice funding today.

Invoice Factoring
Further explanation of invoice factoring.

By William Atkin Published: 8/14/2007

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