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To Get A Fast Quote for your Businesses Cash flow Needs
Click Here One of our certified specialists will assist you. We offer credit lines starting at $5K up to $50 Million.
[youtube http://www.youtube.com/watch?v=cGSsOBPYX18&fs=1&rel=0&feature=player_embedded&hl=en]
To Get A Fast Quote for your Businesses Cash flow Needs
Click Here One of our certified specialists will assist you. We offer credit lines starting at $5K up to $50 Million.
[youtube http://www.youtube.com/watch?v=deYAB90V0yc&fs=1&rel=0&feature=player_embedded&hl=en]
To Get A Fast Quote for your Businesses Cash flow Needs
Click Here One of our certified specialists will assist you. We offer credit lines starting at $5K up to $50 Million.
This article is focused on using factoring effectively to meet payroll quickly
One of many consequences of the recent economic downturn is that organizations have become more guarded and conservative with their cash flow. For example, many companies are conserving cash by paying their invoices more gradually.
In return, this has impacted smaller companies who depend on steady predictable cash flow to have the ability to meet their obligations. Also, smaller companies are also doing the exact same thing and striving to pay their invoices slowly as well. Ultimately, everyone’s cash flow is being affected.
The problem with this is that many small companies live one invoice to the next (not unlike paycheck-to-paycheck) and a hold up in invoice payments can quickly jam up their cash flow. And also since few small companies have any meaningful cash reserves, a holdup may affect their ability to pay vendors – and more importantly – their ability to meet payroll.
Missing out on payroll can have substantial negative outcomes that could in the end lead to the closing of the business. A line of defense to prevent a cash flow shortage is to develop a cash reserve. For businesses today this is easier said than done due to the fact most small businesses don’t have the ability to build a cash reserves.
However if you can build a cash reserve, your organization will be in a better situation to weather the inevitable storms that will hit your cash flow. If creating a cash reserve is not an option, then you should think about using a business financing solution that can enable you to cover payroll and other expenses if things get tight. Invoice factoring is a business financing solution which might be used to correct cash flow challenges relatively rapidly and without the hassles related with conventional financing.
It works by repairing the problem at the source. It supplies you a cash advance for your slow paying invoices, offering the cash you need to meet payroll and other essential expenditures. Using an invoice factoring remedy you can get rid of the uncertainty of client payments, enabling you to obtain a more foreseen cash flow.
One of many advantages of factoring is the most important thing you need to have to qualify for this type of financing is solid commercial customers. It’s ok if your customers pay slowly – given that they pay reliably. Aside from this, your business needs to be free of legal and tax issues. And factoring can be implemented fairly quickly – usually in a week or two.
One more advantage of factoring is that it’s tied directly into your sales. What this means is that it can be increased easily as your sales increase, provided that you are invoicing credit worthy customers. This makes invoice factoring the perfect solution for small companies with good potential customers that are hindered by cash flow problems.
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.
Have you ever considered Purchase Order Financing or Accounts Receivable Financing , also known as factoring invoices?
In contrast to Purchase Order Financing, Accounts Receivable Financing focuses on advancing a large portion of the invoice immediately after the product is delivered to the customer. Instead of waiting Net 30 to up to net 90 days to get paid, an accounts receivable financing company is able to reduce the wait to virtually net zero by advancing 70-90 percent of the invoice amount. After the full payment has been received from the customer the accounts receivable financing company will transfer the remaining portion of the invoice, minus their cost (typically one to three percent).
Get you Cash Fast! As compared to the drawn out process of traditional financing, both Purchase Order Financing and Accounts Receivable Financing can be obtained in a matter of days, albeit Accounts Receivable financing can be faster than purchase order financing.
Credit Worthiness. Both methods focus on the credit worthiness of your client, not your balance sheet. Traditional lending look to your past history of managing your company’s finances and credit when deciding if a line of credit will be approved. Purchase Order Financing and Accounts Receivable Financing, on the other hand, will look to the future of your company and the creditworthiness of your clients.
These two funding strategies are great for newer companies. Companies without a track record of at least 2-4 years, you may not have much of a shot at getting approved for business credit through a traditional lender. Since purchase order financing and accounts receivable financing companies put more weight on your clients creditworthiness, than on yours, young businesses are able to get the financing they need! Visit NeeBo Capital Today!
Management will tell you local business accounts for a portion of their larger clients. Why? Because we feel more comfortable handling business in person, face to face. A key benefit of local business is regular meetings. This is why we position our offices close to a major international airport, because we encourage meet-ups with our clients.
Location is important, so on the subject of picking a factoring company is it best to go with a local provider?
Without complicating things the answer is no. You need to pick a factoring company who will offer you the services you need at the rate you want. Nothing is worse than doing business with a factoring company just because they are local, and soon finding out you over paid and they are an unorganized company.
Your invoice factoring and purchase order financing can take place via fax, email, or phone. So clearly location is only a minor part of the equation. At NeeBo Capital we frequently fly to our clients offices in order to solidify our relationship as your choice factoring invoice firm.