The Factoring Loan

• 26Jun

  Help Your Small Business Grow With Business Factoring

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  Kris Koonar asked:
  
  
  As a small business owner there is often times when face a cash crunch. If I were to approach a bank, there are chances that they won’t give me a loan to finance my needs. This does not mean the end of the road for my business though. I can always build up the cash from factoring companies who are ready to provide me with the necessary finance. With ample help from business factoring services I have been able to grow my business to a large extent.
  
  Small businesses generally have customers who pay after a period of 30 to 60 days or even more. There is a need for immediate cash to pay off certain bills, rents, and taxes. The cash requirement does not end with it. Funds are also required to pay salaries to employees, undertake any repairs or may be even purchase of some equipment. All these operating expenses cannot be put off to another date when the receivables are cleared.
  
  Often you would apply for a loan from banks. The banks are generally unable to allot any loans to small businesses due to the constraints of credit ratings and the availability of assets as collateral. Moreover, the procedure is time consuming and it may be some time before you get the funds. An opportunity to grow may be lost if you have a shortfall of funds. All this can be overcome by using factoring services offered by different financial institution and even some of the banks.
  
  Factoring involves selling of invoices or accounts receivables to the factoring companies. The factors will accept the receivables and provide you with cash, which may even is upto 80% of the invoice value. With this immediate cash in hand the bills can be paid off easily. While undertaking a new project, which needs the financial situation to be better off, factoring provides a double advantage. With receivables reduced I could impress a better financial situation and also show the availability of funds to satisfy any requirements of the project. The operational costs of the new contract can be well covered with funds in hand. This proved to be a major boost for my small business to grow.
  
  As a small business extra efforts have to be put in for sales improvement. Innovative sales plans have to be developed to improve sales. With cash in hand I could go ahead with a few schemes that enhanced the sales. In other words you may say that with the receivables in hand to sell off you have ready cash to take up a marketing program. This helps in getting you more business, which means that you have more receivables, which you can use in a similar manner in the future. More customers means more sales that lead to increased profitability.
  
  When I decided to use the factoring services the collection activities were taken over and completed by the factors. They relieved me from the task of collection. It allowed me to concentrate on other activities like accounting, sales and marketing.
  
  Another advantage of using the factoring services for a small business is that the credit scores can be built up. As the receivables are reduced and cash in hand improves the balance sheet reflected a good financial situation of the business. It helps bring in more customers, as the financial situation seems sound.
  
  Business factoring has helped my business in more ways than one. With the optimization of the cash flow, it has proved to be a morale booster for me as well as my vendors. I now have better control over the accounts receivables cycle bringing in greater discipline in my finances.
  
  
  
  For Commercial Finance Loans – Factoring Loans * Equipment Financing * Purchase Order Finance * Commercial Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.

  Tags: Invoice Value, Invoices, Small Businesses

• 09Jun

  What Makes You Qualify For Accounts Receivable Financing

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  Kris Koonar asked:

  There are often situations when small, medium and even large companies find themselves in a tough spot as far as revenues are concerned. They are at a loss of funds or finance to undertake a project that is expected to give good results. In such a scenario the option available for financing is accounts receivable financing.

  Accounts receivable financing is a secured loan for which accounts receivables are pledged as collateral with financial organizations. For small businesses it acts as a boon to help improve their cash flow. Generally small businesses find it hard to receive finance from a bank as they have less credit rating to show because they are yet in a developing stage. Unless finance is available, it is not possible for business to grow at a good pace. A timely finance from finance companies or even banks proves to be helpful for their growth. They often have customers who do not pay before 30-60 days. In such cases the accounts receivable are given as security to a financial organization and finance is received.

  Any company can opt for accounts receivable finance. It is very popular with transport or trucking companies, construction companies, manufacturing companies, textiles, staffing and engineering and other small businesses. It benefits medium business and any other business that needs finance on a daily basis. These companies would need to have accounts receivable in hand. The companies who can qualify for such finances would need to have accounts receivables from credit worthy customers.

  Moreover, aging of accounts happen to very large extent. They may have regular contracts with organizations with good credit history or government organizations. Some financial organizations also consider the period for which the credit is given, which they prefer should be within 30- 60 days. Companies which are experiencing modest speed of growth and find it hard to keep the cash flow constant find the accounts receivable finance very beneficial.

  These finances ensure growth and stability of a company. The process is very quick and you can get the finance in a very short period of time. As finances are available on a timely basis, the companies may be able to get some advantage of reduction of overheads. The processing time of this type of financing is very less. Some of the companies also have online submission, and invoice submission systems which are then verified and checked and finance is provide in less than 2 days also which is a very timely help for these companies which need finance to undertake their daily activities. One more benefit that you get from such a finance function is that the accounts of the companies are managed better as proper records and collection on the due date is very important. For the small companies it is an additional benefit that the business in itself is well organized to make the entire process cost effective.

  Accounts receivable financing is available to all those organizations that are in urgent need of finance or cash and are caught up in tricky situations wherein customers make payments very late. Companies find this financing highly beneficial to keep the growth of their organization on track.

  nicesinging1 asked:
  
  
  I heard that there are number of downsides being small business owner. Besides having to work long hrs and be constantly worried about your business and the competitors nearby, there is a high risk of going bankrupt. I was told that 80% of small businesses go bankrupt within its first 2 years. Sure, you make a lot of money if your firm becomes successful, but it seems there are many hurdles before reaching that state.
  Knowing that, is it worth the risk starting your own small business for people with not much entreprenurial experience? What are the characteristics of people who own successful small business?
  
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  Tags: High Risk, Small Businesses, Starting Your Own Small Business

• 01Apr

  Invoice Factoring Can Save Your Business

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  Troy Degarnham asked:
  
  
  Invoice factoring is the basic practice of selling invoices to financial factoring companies for the purpose of receiving money right away. Smaller companies often fall into the financial trap of not having available resources and therefore sell their invoices to financial agencies in order to gain working capital. This practice does not require the business to swallow more debt and in fact operates in an opposite manner. Small businesses that don’t utilize the financial tool of accounts receivable factoring acquire more debt by waiting for the accounts receivables to be paid.
  
  Invoice factoring is typically used as a measure to avoid falling further into debt. Without this effective financial management tool many businesses have to adopt more loans or alternatively, put up more collateral for existing loans. Invoice factoring is available at a minimal fee, which makes it an attractive substitute to assuming more debt. In fact, accounts receivable factoring fees are usually set up by way of discount and these rates differ from individual company to company. The great advantage to this type of liquidation is that there are no interest fees to pay and the result is most often better profit margins.
  
  There are many financial companies that offer invoice factoring services. The individual agencies will set up a company with the right set of accounts receivable factoring parameters. After the professionals from the invoice factoring agency assess the individual situation, they will set up the receivables to be factored and proceed accordingly.
  
  Financial agencies that offer accounts receivable factoring are located worldwide and support every industry under the sun. Even truck drivers can sell their invoices to an invoice factoring financial service to free up capital fast. One of the most attractive aspects to an accounts receivable factoring agency is that they customize the service to each business’s individual requirements.
  
  There are as many different types of invoice factoring agencies, as they are rates for factoring invoices. Some purchase the invoices no matter what the receivable total is and some accounts receivable factoring agencies will only liquidate invoices that accumulate more than $100, 000. Generally the higher the invoice factoring total is, the lower the rates will be to take advantage of this financial escape. In cases where the total is in excess of a hundred thousand, a solid accounts receivable factoring agency will offer rates that can be as low as two per cent!
  
  There are many different types of invoice factoring agencies. For example, some agencies will only serve those businesses in the medical profession while others only serve purchase order factoring. There are some accounts receivable factoring agencies that are specifically designed to cater to small business and offer many great advantages that a larger agency wouldn’t necessarily offer. Despite the type of invoice factoring agency that is required for every individual business need, accounts receivable factoring typically happens within a 24 hour time period.
  
  
  
  For Commercial Finance Loans – Factoring Loans * Equipment Financing * Purchase Order Finance * Commercial Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.

  Tags: Accounts Receivables, Small Businesses, Smaller Companies

• 26Feb

  Facts About Small Business

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  Jonathon Hardcastle asked:

  Everyone agrees on a broad level that small businesses are vital to the American economy. However, most people would be surprised to know just how important. The United States Small Business Administration keeps records and statistics on small business in the United States and some of their findings are surprising.

  First, the typical perception of a small business as a mom and pop operation with just a few, if any, employees is not the entire picture. The Small Business Administration defines a small business as an independently business with less than 500 employees. There are an estimated 23 million businesses in the United States that meet that classification. In some smaller towns in the United States, these businesses represent a major source of employment.

  In fact, small businesses as defined by the Small Business Administration represent 99.7 percent of all the employers in the country and employ half of all private sector employees. More than 45% of the private sector payroll is generated by small business. Over the last decade small businesses have accounted for 60 to 80% of all new jobs created on an annual basis.

  Although a large percentage of small businesses are in the retail and service sectors, small businesses are rapidly making gains in the technology sector. 41% of high tech workers like engineers, scientists and computer programmers are employed by small businesses. Employees at small businesses produce 13 to 14 times more patents than those employed by larger companies.

  The Small Business Administration also offers some interesting observations on small business survival. Two-thirds of small businesses survive for at least two years declining to 44% after four years. Most of the factors that support a small business surviving are well known, such as access to capital and owner’s education level. However, a lesser known factor in small business survival is that the business is large enough to have employees.

  Similarly, barriers to starting a small business include lack of access to start-up capital and lack of education. However, the number one barrier to small business start up and a primary concern of existing small business owners is access to private health insurance. Individual health insurance for sole proprietors is much more expensive than receiving coverage through an employer. If a small business owner is able to offer health insurance to its employees, the administrative and premium costs are often much higher than those for larger businesses.

  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 IMMFinancial.com to put his experience to work for you.

  Tags: Last Decade, New Jobs, Small Businesses

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