Business Can Get Better with AR Factoring in California

It was only a few years ago when the California economy was in the dumps. It went through a budget crisis, but now it seems like things are getting better. The state doesn’t have a budget debt anymore, and the tax receipts for 2014 are exceeding expectations by producing a surplus. That was mainly because of the boost in the stock market with successful Silicon Valley IPOs, along with a program of higher sales and income taxes. Even housing prices have gone up.

Optimism about the Future

Even small business operators are becoming quite optimistic about the future. In the latest Small Business Monitor survey, about half of the businesses plan on making capital investments over the next few months, which is a significant improvement from the business outlook in the spring of 2013 when only 36% felt that way. The optimism may be due to the increase in employee productivity reported by 85% of businesses.

Solving Cash Flow Problems

About 37% of California businesses report having problems with their cash flow, but that is a considerable improvement from the 77% of businesses in early 2013. While banks are still a bit leery in making loans for small businesses, alternative financing methods have become more popular. AR factoring in California, for example, is becoming more common.

Accounts receivables factoring is not a loan. Getting a bank loan today has become really difficult, and other lending alternatives may still have similar requirements. In general, you’ll need a stellar credit history and significant collateral. With AR factoring in California, your credit history is largely irrelevant. It’s actually more important for the factoring company to evaluate the stability of your customers. You simple have to demonstrate that your business is stable, and that you have good invoice practices. The approval process for this financing method is refreshingly quick.

The AR Factoring Process

Most of the time, your business may suffer cash flow problems because your suppliers and employees demand immediate payment, while your own customers take 90 days to pay for the goods and services they receive from your company. That’s not exactly a system that will encourage a healthy cash flow, right?

But that problem can be alleviated or even solved by AR factoring. The essence of this financing method is simple. You submit the accounts receivable to the factoring company, and in return you receive about 80% of the value of the invoice. You get this money in advance, often within just a couple of days. Then when your customer pays in full, the factoring company takes its fees and then wires the remaining balance to you.

Survival and Growth

With the money you get in advance, you can then pay for all the operational expense you need to cover so that your business will stay afloat. And when you do manage to get your head above the water, you can even use this money to take advantage of business opportunities.

California is set to see better days ahead, and with financing, you can make the most of this forecast as well.

 

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Chris Lanchech

Hi everyone, my name is Chris and I am a junior analyst at Neebo Capital and an inspiring blogger. We enjoy speaking with business owners and entrepreneurs who come to Neebo Capital looking for cash flow solutions. Give us a call toll free at 1-888-382-3766 or Visit us online at www.neebocapital.com

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