Factoring Companies around the globe have started the 2011 fiscal year! From our business to yours, we wish you the very best success this new year, in both your accounts receivable factoring ventures and the other things in life that might keep you busy. We took some time off for the holidays and are back to factoring company tip-top shape, ready to churn out factoring tips, tricks, info, and more.
Factoring Companies have likely been on the back burner with the rush of the holiday season and the New Year, but here are a few important reasons to bring factoring companies back into your budget meetings this first quarter.
Factoring Companies can help your business manage your cash flow while things are tight. From gifts to customers, to extra hauls for deliveries, the holidays cost money. Get your cash flow back on track by using a reputable factoring company to factor your accounts receivables.
Factoring Companies get you funding without debt. The reality of cash flow restrictions becomes a lot louder without the jingle bells to drown them out. Don’t be tempted into taking out lines of credit or loans this post-holiday season! Factoring companies can provide you with money you’ve already billed for next month, this month, in one up-front transaction, and NO debt.
Factoring Companies can help you make the most of your inventory. Buy in bulk to keep your company growing. Have a sale for VIP customers. Get incentives from vendors. Factoring companies can help you do all of these things with the money you’ll receive from your factored accounts receivables.
A/R Factoring Qualification Process
Factoring receivables is simple, and yes, for the most part, easy. (Any business owner knows those two things are NOT one in the same. But that’s another blog.) Still, it’s a financial move, and as any (good) financial consultant will tell you: always ask questions. Lots of ‘em.
I’ve talked before about consults, the nervous owner who’s been previously turned down; the growing business with little to no history…In my experience most factoring questions center around credit and with good reason. Credit, especially while our economy is mending itself, is a pretty important aspect to business in America. So, does factoring receivables have a qualification process and how does it work? (more…)
Factoring companies have existed for hundreds of years, and the concept of invoice factoring can be traced back to biblical times! So, what?
The point is: factoring is nothing new. And, in times when banks are closing left and right, doing the stock price name shuffle, and are in an overall unreliable condition, it’s nice to know there are companies out there depending on business practice instead of unpredictable markets. Factoring is not some new fan-dangled scheme promising the world to business owners. Invoice Factoring is a simple transaction that creates capital and provides resourceful access to operational dollars. There are circumstances when accounts receivable factoring is not the solution, but for many small to medium sized businesses, it’s an old way to find new money.
A/R Factoring is a simple concept that goes 1-2-3.
1. Factoring companies facilitate payment for a business’ A/R.
2. Factoring companies collect payment for the factored invoices over the course of the invoice terms (30 – 60 days typically), in exchange for a negotiated percentage of the invoice volume.
3. The business uses payment from the factoring company to execute vendor orders, pay employees, produce bulk inventory and more.
There is nothing questionable about what factoring is or why it works. Market fluctuations do not drive factoring companies to the top of the business world, only to drop them into inoperable bankruptcy - like we’ve seen with our banking structure. And last, but certainly not least, factoring invoices does not create debt. In fact – it can actually help businesses get out of debt faster! It’s these small truths that make factoring a timeless practice, and in times of struggle, and even recovery, invoice factoring is a great way to realize funds without visiting the local bank. Plus, the bank line stopped being fun when you were too old to get lollipops.
Back for more Thursday when I chat factoring qualification! See you then!
Factoring invoices was once connoted as a “last-resort” financial move. (more…)
A/R Factoring for a Well-Oiled Machine
If we could compare a business analogously to a vehicle, cash flow would undoubtedly be the engine. It keeps the vehicle moving in forward progression, and if it suddenly stops working, could mean big problems for the business, or worse yet, a complete cease to its operating existence.
Factoring companies provide an important service to the “engine,” and small and medium enterprises. Factoring helps businesses maintain their growth rate with the security of operating capital. What’s more, the factoring company helps these “engines” work better, which spells efficiency for everyone. As a business grows, it can sometimes face troubles with cash flow during the interim between invoicing and payment. Factoring invoices eliminates both the wait, and the frustration, allowing businesses to collect payments weeks ahead of schedule.
Factoring receivables works best when there is an existing accounts receivable system that is running fairly efficiently. In the same way a vehicle must have four quality tires in order to run smoothly, regardless of what kind of engine there is, a business seeking a factoring company should be in working condition, or in other words: profitable. See: To Factor, or Not To Factor.
Factoring companies, in this sense, are like great mechanics. And like mechanics, factoring companies should be thoroughly researched prior to engaging in professional services. Here at Bridgeport Capital, we offer invoice factoring for a variety of industries, and would be happy to look under the hood.
PS – Have a safe and Happy Thanksgiving! Remember to be grateful for all that you have! We’ll be back for a factoring dish on Friday when we’ll talk about what you can for the things you don’t have. See you then!