Credit Insurance Policies on Receivables

So you have a business and you sell to clients on credit terms. Maybe you should consider credit insurance policies on your receivables. Why?
Credit Insurance Policies on Receivables
The simple answer is to reduce risk, and strengthen your businesses financially in order to establish a stronger bankline in the future.

However the deeper answer has to do with your business and its potential loss. The saddest stories in the factoring world come from businesses who lose their largest accounts overnight.

These accounts can be large fortune 500 companies with sound financials.However one bad press release or shock to the economy can have a trickle effect and bring their business to a halt. A perfect example of one of these unforeseen chain reactions, was the filing of bankruptcy of one of the largest food processing companies in the industry.

All it took was one massive press release about the “pink slime” found in processed hamburger meat and The King of Prussia,  a PA-based food processor was devastated. Prior to the release the company processed about 500 million pounds of beef annually!

Now imagine if you are a suppler for this company with over $50,000 or $100,000+ in outstanding A/R. Prior to the pink slime press release you may have not been worried. The King of Prussia may have been one of your largest and secure accounts. However you now can see how quickly things can change in today business environment.

why should you buy credit insurance?

Had suppliers had credit insurance policies for their large customer “the king of Prussia” they would have recovered $0.80 to $0.90 cents for every dollar they were owed.

Sometimes – and this is the reason for credit insurance – there are unforeseen factors that influence the performance and survival of your customers.  Whether those are the court of public opinion, mismanagement, or a bad acquisition, companies go bankrupt, leaving you and your company paddling up shits creek.

Visit Neebo Capital for Credit Insurance Policies on Receivables

Neebo Explains Factoring Invoices

Welcome to NeeBo Capital, this article was written to give you a better understanding of how factoring invoices works.

As you know
business owners need cash. However how do you get money for your small company when banks are unwilling to offer your company any type of funding?Our team would like to introduce you to accounts receivable factoring,a proven approach of obtaining investment capital swiftly. That way, you will make the payments required to keep your business afloat while reducing your risk amounts.Factoring invoices involves selling yourcompany accounts receivable to a company such as NeeBo Capital in order to obtain instant cash flow. The factoring company pays you an advance, which is a percentage of the total invoice (typically 80-95%). Your clients re-pay the factor, and you receive the remaining, minus a small factoring fee. This is a time tested method to keep your company cash flow growing.If many of your invoices are not paid on time, use NeeBo Capital as your factor. Your business depends on money to run, and factoring is a way to avoid waiting Thirty to 60 days for invoices to be paid. Factoring companys such as NeeBo Capital look at your customer’s credit history and offer you an advance and a fee.

Something to remember is the fact you do not have to factor all your invoices. You should not look to factor clients who usually pay rapidly and dependably. The loss of money from the factoring fee would be greater than the immediate benefits. By studying your invoices and choosing carefully which ones to factor you will increase your profits. You do not have to take the very first rate that a factor company offers.

In the event you do not feel like you are receiving a bargain, check if the factoring company can offer a reduce rate over time or even determine if you could get a greater advance at the start while the factor works with your customers. Most factor companies give lower fees to companies that use their services often. This benefits the factor in addition to your business by generating a partnership.So do not hesitate, start factoring your invoices with neebo today!

Whats Non Recourse Factoring, What is Recourse Factoring

Today non recourse factoring has become the most confusing topics in the industry and potential clients normally have the wrong expectation with regards to this solution.

non-recourse factoring is: It is a factoring service where the factoring company assumes the risk of non payment if the client is not going to pay the invoice due to insolvency during the factoring period. This meaning can sound a little confusing to many. Additionally, non recourse factoring options varies by company, but this definition normally holds true.

In simpler terms, this usually means that when your customer cannot pay the invoice due to financial distress (i.e. bankruptcy) that happens throughout the factoring period, in that case you are covered.

The invoice factoring period is usually defined as the 60 to 90 days that a customer has to pay the invoice back.

One example is, the following items are usually NOT covered in a non recourse arrangement even though many clients who hope were covered:
• Payment disputes of any kind
• Product or service disputes
• Late payments

Keep in mind that non recourse factoring offers some defense against credit risk, it does not offer protections against disputes and overall performance problems. Essentially, non recourse factoring usually covers you if your client suddenly goes bankrupt during the factoring period. It might be an important protection but it’s not all inclusive.

One additional point is that while unforeseen bankruptcy do happen – current credit analysis technology is reasonably good at discovering the warning signs that happen prior to a bankruptcy. Most factoring companies will keep an eye on your customer’s credit regularly anyway and will advise you if they detect any increase in the level of risk.

The specifics of how the non recourse factoring plans operate are defined in the factoring contract. It’s a good concept to review the contract with a competent attorney to make sure you understand it.

Freight Bill Factoring Works Fast

Freight brokerages have a tendency to generally be very cash flow rigorous businesses – where the owner is walking on a tightrope attempting to balance slow shipper payments and quick payment demands from . This creates a dilemma because they need to pay their drivers quickly, but they don’t to angry shippers by requesting quick pays.


Their first line of protection is to use their on reserves to pay drivers, while waiting to get paid by shippers. Unfortunately, paying drivers out of cash reserves will restrict your growth and, if done too much, it can create issues for your business.

A much better alternative is to use company financing to take care of this gap. There is one particular type of financing that addresses this specific problem – it’s called freight bill factoring.

Freight bill factoring offers the equivalent of a quick pay, which improves your cash flow and offers the needed funds to pay your drivers and grow your business. It works by having a factoring company act as a financial intermediary in the transaction.

You sell the fright bill to the factoring company who pays you for it immediately. The transaction is then settled once your shipper pays the bill in full. The factoring company charges a small fee for this service – usually a percentage of the freight bill.

One of the advantages of freight factoring is that is easier to obtain than most conventional financing. The most important qualification requirement is the credit quality of your shippers. Aside from that, your company needs to be free of liens, judgment’s and tax problems.
Freight factoring can be an ideal tool for brokers who are growing quickly and whose biggest assets is a roster of reliable and credit worthy shippers.