Category: A/R Financing

Are You Looking for a Local AR Factoring Company? Here’s What You Need to Know

You run a business but now you’re running out of working capital. Your suppliers need to be paid on delivery, your utility bills are due, and you are wondering where to get the money to pay your employees. Meanwhile, your customers only pay 90 days after you’ve delivered their order. How are you supposed to keep your business afloat for the next 90 days?

For most people, the most obvious answer is to go to a bank and ask for a loan. But banks today are no longer as cooperative. And even if they were, often the application process takes too long.

If you need the money immediately, your best option is to partner with a local AR factoring company. Applying for this kind of financing takes a short period of time and the approval rate is much higher. Setting it up takes only a week or two. You give them your accounts receivable, and in return you get about 80% of the value of the invoices right away. You get the rest when your customer has paid in full and the factoring company takes its cut.

The number of factoring companies is increasing, and this gives you a bit of leeway on your choices. But how do you select the right local AR factoring company for your needs? Here are some variables you need to look for:

  1. Experience. You need a factoring company with experience, especially if you yourself are new to this method of financing. You want a company which already knows the intricacies of this funding method, and you want someone to guide you through.
  2. Specialty. Even a factoring company which claims to be familiar with all types of industries will prefer one or two specific industries. You want a company which already knows the peculiar rules and customs of the niche you are in. If you are running a medical clinic, for example, you want a factoring company with extensive experience with insurance carriers.
  3. Size of client companies they usually work with. Factoring companies are more comfortable with small businesses, while others may prefer bigger corporations. You can confirm how the factoring company works by asking for references. Specifically, you want a reference which is the same size as your company and is also connected to your industry.
  4. What are the terms of the contract? How large is the advance? What is their limit? How much do they charge in terms of percentage, setup fees, and fees for late-paying customers? These are questions you need to ask before making a decision.

To avoid confusion, you may want to refrain from applying to a dozen different factoring companies. Instead, pick the top three among the bunch according to the variables listed here. You can then compare them against each other so that you can determine which one is the best for your needs.

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.

 

California Apparel Company Working Capital

California Apparel Company Working CapitalIf you are an apparel company operating in the state of California, then you have special challenges that non-Californians may not experience. Your main problem is carving out a niche for yourself, because the state is teeming with competitors in the apparel industry. Perhaps a large part of your California apparel company working capital will be spent on marketing and advertising, simply to make sure that your brand is known among shoppers and that you have the brand image you want to have.

Everything seems more expensive in the state. Rent for California commercial spaces can be exorbitant, despite the supposed problems in real estate. Even paying workers is more expensive, with their hourly wages almost 10% higher than the rest of the nation.

But there are software tools you may want to use which can truly help you in your day to day operations. These tools don’t really care all that much if you are in California. You can take advantage of the benefits they bring just as much as the rest of the nation. Take a look at some software tools which can really make business much easier for you:

  1. WordPress. More than 60 million people use WordPress, and that just shows how easy it is to use, and how beneficial it is as well. You need an online presence for your apparel business, but sometimes it can feel as if you’re managing an entirely different business when you run a website. Hiring people to run it for you and to add content can really siphon off your money, and the regular maintenance costs will take their toll as well. But with WordPress, it’s so much easier, and it’s even free.
  2. Bill.com. Doing your accounting books is part of running a business, but Bill.com makes it all so easy. It helps you track all your accounts payable and accounts receivable, and helps you manage your cash flow. It works with your accounting software, and it even eliminates the paperwork by storing everything in the cloud. It helps you make more accurate projections, reveal potential problems down the road, and enable you to come up with solutions much more quickly.
  3. Evernote. Running a business means keeping track of everything, and that can be difficult when you have to come up with new ideas while also taking note of tasks you need to do. But Evernote helps you keep tabs on everything, and you can use any mobile device to access your notes. So any time you get a fresh idea, Evernote can help make sure you don’t forget. This is especially useful when you like to take photos to illustrate your ideas—these photos can’t help when you just use a notebook and pen.

As an entrepreneur, you really need to use your California apparel company working capital wisely. It has to last for a long time, because it will take some time for you to achieve the success you want. By investing in the right software tools, you can use your resources correctly and you’re much more likely to see a return on your investment.

 

How to Get Working Capital in Canada

All over the world, trying to get financing for businesses is increasingly becoming increasingly difficult, and Canada is no exception to this global crunch. Yet for those who wish to learn how to get working capital in Canada, all that’s needed is a lot of persistence and the information as to where to go to secure a loan.

In fact, that’s probably the key information you need to know when you’re learning how to get working capital in Canada. There are actually quite a few sources, and all you need to do is to approach them and send all the requirements they ask.

1.     Business Development Bank of Canada. Of all the banks you can approach for working capital, the BDC is probably your best option. According to Gary Ziegler, founder and chief executive of Calgary e-commerce company eThor, that’s where they got their first money, because none of the other banks were willing to lend them working capital.

The BDC even offers specific types of working capital. For new companies, they offer a start-up financing program of up to $100k in working capital, for small businesses that can show a realistic way of making a profit. The BDC may also offer a market expansion loan to existing companies to enable them to participate in trade shows, come up and launch a marketing plan, or to engage in ecommerce.

2.     Canada Small Business Financing Program. For start-ups and for making improvements, this small business program can provide as much as $500k in working capital. You can apply for this program at any bank, credit union, or caisse populaire in Canada.

3.     Aboriginal Business Canada. If you are of Aboriginal heritage, this program is much better than loan because it’s a grant. As long as you have a viable business plan, you may get as much as $100k.

4.     Micro Loans. Check with your credit union or caisse populaire if they offer this type of loan. The amount may reach up to $15k, and are often offered to those who can’t get a traditional bank loan.

5.     Community Loan Funds. Some non-profit organizations called Community Investment Funds exist to help people who can’t secure bank loans. You may get a loan ranging from $2k to $150k, depending on the particular loan fund.

6.     Small Business Loans for Young Entrepreneurs. Young entrepreneurs, ranging from 18 years to in the mid-30s, can take advantage of special small business loan programs for the youth. As much as $15k may be received in a loan.

7.     Women’s organizations. Some organizations are dedicated to helping women get the funding they need for their business.

8.     Angel Investors. These are investors who want high returns for their investment in your company, and who may also want to participate actively in your business operations to ensure its success.

If none of these sources pan out, then there are always your friends and family. Between financial institutions and your closest kin, there’s a good chance you’ll get some working capital in Canada.

How to Get Working Capital in Canada

All over the world, trying to get financing for businesses is increasingly becoming increasingly difficult, and Canada is no exception to this global crunch. Yet for those who wish to learn how to get working capital in Canada, all that’s needed is a lot of persistence and the information as to where to go to secure a loan.

In fact, that’s probably the key information you need to know when you’re learning how to get working capital in Canada. There are actually quite a few sources, and all you need to do is to approach them and send all the requirements they ask.

1.     Business Development Bank of Canada. Of all the banks you can approach for working capital, the BDC is probably your best option. According to Gary Ziegler, founder and chief executive of Calgary e-commerce company eThor, that’s where they got their first money, because none of the other banks were willing to lend them working capital.

The BDC even offers specific types of working capital. For new companies, they offer a start-up financing program of up to $100k in working capital, for small businesses that can show a realistic way of making a profit. The BDC may also offer a market expansion loan to existing companies to enable them to participate in trade shows, come up and launch a marketing plan, or to engage in ecommerce.

2.     Canada Small Business Financing Program. For start-ups and for making improvements, this small business program can provide as much as $500k in working capital. You can apply for this program at any bank, credit union, or caisse populaire in Canada.

3.     Aboriginal Business Canada. If you are of Aboriginal heritage, this program is much better than loan because it’s a grant. As long as you have a viable business plan, you may get as much as $100k.

4.     Micro Loans. Check with your credit union or caisse populaire if they offer this type of loan. The amount may reach up to $15k, and are often offered to those who can’t get a traditional bank loan.

5.     Community Loan Funds. Some non-profit organizations called Community Investment Funds exist to help people who can’t secure bank loans. You may get a loan ranging from $2k to $150k, depending on the particular loan fund.

6.     Small Business Loans for Young Entrepreneurs. Young entrepreneurs, ranging from 18 years to in the mid-30s, can take advantage of special small business loan programs for the youth. As much as $15k may be received in a loan.

7.     Women’s organizations. Some organizations are dedicated to helping women get the funding they need for their business.

8.     Angel Investors. These are investors who want high returns for their investment in your company, and who may also want to participate actively in your business operations to ensure its success.

If none of these sources pan out, then there are always your friends and family. Between financial institutions and your closest kin, there’s a good chance you’ll get some working capital in Canada.

Medical Accounts Receivable That are Long Overdue

For clinics and doctor’s offices, having trouble with maintaining a ready cash reserve is often a problem. That’s because many clinics don’t build up cash reserves to deal with cash flow problems. One of the reasons for cash flow problems is that clinics very rarely get paid in cash. They deal with insurance companies for the most part and those institutions are generally the main reason for the medical accounts receivable long overdue, since they often set up overly tedious and complicated procedures before they pay you. These insurance companies can also reject claims, which further delay payments.

For medical accounts receivables long overdue, the best way to handle the situation is to set up an efficient revenue cycle management:

1.     Medical accounts receivables should be filed and grouped in an effective manner, so that the clinic can track them better. The accounts receivables should be sorted into groups defined by their due date. For example they can be grouped into overdue, current, 30, 60, and 90 days categories. This makes tracking accounts receivable more organized, and more attention can be focused on the current and overdue accounts.

2.     Someone has to take the responsibility to follow up on these accounts on a regular basis. These employees should make regular calls to Medicaid and Medicare, along with the commercial insurance companies. These follow-up calls should be done regularly so that the current status of the claim can be determined.

3.     If there are any delays, the cause must be ascertained and if possible, rectified. The proper documentation must be ascertained, done, and sent to the appropriate insurance companies so that the process can go much more smoothly. In case of rejection and denial, information and documentation must also be collected.

4.     Problems and trends can then be projected using the information gathered from the collection process. For example, the insurance carriers which regularly make slow payments can be identified, and so can the insurance companies which make an inordinate number of rejections and denials. By identifying them, future problems may be avoided.

While all these can be done by the clinic themselves, it will also take a lot of time, effort, and money. Perhaps the most efficient way to alleviate the situation is to work with factoring companies that specialize in medical factoring so that their knowledge and experience can be utilized for the benefit of the clinic.

The main advantage of using experienced medical factoring companies is that they are very familiar with the processes of various insurance carriers. Factors know what kind of paperwork to submit. With that kind of knowledge, the problem of long overdue medical accounts receivables may be minimized or avoided altogether.

 

How to Get Medical Factoring Fast

Among the many independent businesses today, the medical community (including health clinics, doctors’ offices, and small hospitals) is an industry that’s often in need of a ready supply of cash. That’s because in general their payments come from insurance companies, which are notorious for taking a long time to pay. You’d be lucky to get the payment within 60 days. Sometimes it can even take 120 days before you receive any payment. Unfortunately, the bills you need to pay can’t wait that long, and your payments for your rent and utilities, and payroll, as well as payments for your medical equipment must be made ASAP.

Among all the possible solutions, factoring (which involves exchanging accounts receivable for up to 90% of its value right away) can be the best answer, as the likelihood of getting approval is better and the process is faster when compared to applying to a bank for a loan.

While factoring is a very convenient solution for this problem, you also need to figure out how to get medical factoring fast. One way of doing so quickly is to consult with other members of the medical community for any recommendations regard factoring companies. A factoring broker may also identify which factoring companies can act quickly enough for your needs.

As an applicant, you can also help ensure that the process goes smoothly by making sure you do the following:

1.     As much as possible, avoid hand written applications.  It’s better if a form can be filled out online. But if the only option is a hand-written application, make sure you do so legibly. Have a secretary or a nurse do it if that’s not possible in your case.

2.     The application will also likely require you to include some documents, so make sure you already have these files with you. If a certain document can’t be provided, discuss the matter with the factor so that a suitable alternative can be suggested. Your inability to include all the required documentation or the explanations as to why a specific document is missing will be regarded as unprofessional. 

3.     Make sure all the information you provide are factual. In fact, you need to disclose all relevant information without first waiting for the factoring company to ask for them. Factoring companies as a rule search public records to confirm that the information you disclose matches what’s on record.

4.     Try to include a single-page write up that summarizes your clinic’s situation. Tell them about your situation: your challenges, your customers, and your upcoming opportunities. This can help round out the info the factoring company receives from credit managers. Just make sure that the write up is concise and to the point.

5.     You should also fill out the form and send all requirements at the same time. Doing so ensures your application will be processed right away.

Many medical clinics need a quick infusion of cash for day to day expenses in the office. So make sure you do your part by learning how to get medical factoring fast by following the guidelines above. 

How to Spot the 2014 Best Medical Factoring Companies

Looking for the 2014 best medical factoring companies can be somewhat time-consuming if you are not fully aware of what qualities you should look for. To help you along, here are some tips that can serve as your guide, as you look for the best medical factoring companies of 2014.

 

1. Ask how the factoring company determines its fees.

 

If you believe that you need to canvass and compare, gather all the information you have obtained from factoring companies and assess them side-by-side. Prior to this, however, you should be prepared to provide them with the following information, in order that they may also assess you, and see if your medical business qualifies:

 

  • How many patients do you have (in the case of collectable invoices from individuals)?
  • How many insurance agencies and HMOs do you need to collect from (in the case of  collectable invoices from companies)?
  • Of the total uncollectable invoices, how many tie up your cash flow because of delayed payments?
  • How long has your uncollectable invoices been standing (from shortest to longest duration – this will help the factoring companies arrive at the median length of time for your pending invoices)?
  • What is the aggregate amount of your total uncollectable invoices?
  • What is the lowest and highest amount that has been uncollectable (this will help the factoring companies arrive at the median amount of your pending invoices)

2. Ask them for an advance rate and clarify how much cash they are willing to give in exchange for your outstanding invoices.

Factoring companies may be able to offer anywhere from 70% to 90% of the face value of your invoice. Finding out which among your options offer the highest advance rate can help you come up with a good decision.

 

3. Ask about of the factoring arrangement or contract, specifically regarding these matters:

  • What are the terms and conditions of the factoring contract?
  • Is there a minimum monthly volume of outstanding invoices?
  • What is the longevity of the contract?
  • Should you decide to pre-terminate the services of the factoring company, will there be any fines or penalties?
  • Is it possible to terminate the contract through an advance notice? If so, what methods are acceptable for informing the factoring company? What’s the length of advance notice that is required?

4. Ask if they will take charge of actually handling collections.

Some factoring companies take care of the collections while others don’t. It’s best that you find out about this beforehand.

5. Ask about all the fees involved, how much each fee is, and what is the nature of each fee.

For example, you can ask about the application fee, credit reporting fee, any fees for advances released on the same day of application (if this is possible), early termination fees, and the like.

By asking these questions upfront, you will be able to gather enough relevant and accurate information that can guide you in finding the 2014 best medical factoring companies.

You can compare Neebo Capital with other factoring companies to find out if what they offer is what you require for your medical factoring needs.

 

 

What are Your 2014 Medical Factoring Options?

NeeBo Capital’s Funding Program offers healthcare providers a receivable based line of credit that is based on the net realized value for your billings to third-party payors (For Example: HMO’s, commercial insurance providers, Blue Cross-Blue Shield, Medicaid & Medicare). For medical providers that have accounts receivable with a net realized value of $500,000 or less, we offer our medical factoring program that is a funding program that purchases your billings at a discount.
NeeBo Capital’s Funding Program offers healthcare providers a receivable based line of credit that is based on the net realized value for your billings to third-party payors (For Example: HMO’s, commercial insurance providers, Blue Cross-Blue Shield, Medicaid & Medicare). For medical providers that have accounts receivable with a net realized value of $500,000 or less, we offer our medical factoring program that is a funding program that purchases your billings at a discount.

With the year 2014 now in full swing, what’s your financial health like? Is it on the upswing too, or are you worried about cash flow problems? If it’s the latter, don’t worry, because there are plenty of 2014 medical factoring options that can help you out of a tight financial situation.

Is Medical Factoring a Loan?

When you avail of medical factoring, you are not taking out a loan, but rather, a cash advance. Medical factoring can be great for companies in the health care field, whether they are key players, such as clinics and hospitals, or businesses that are responsible for providing support services to those in the medical and health care field, such as:

 

  • Manufacturers and/or suppliers of medical equipment
  • Agencies that facilitate nurse staffing
  • Providers of medical transcription
  • Drug and/or alcohol rehabilitation centers
  • Any business or company that is allied to, or dependent on the medical and health care industries for its operations

 

Benefits of Medical Factoring 

The most direct answer to the question of what you can get out of medical factoring is this: you get your cash flow freed up, so that you can focus on attending to your core business, instead of worrying about where to get funds for such things as equipment repair or upgrade, hiring of additional staff, paying the rent, paying the salaries of your existing staff, paying utilities, buying materials, and many other concerns.

 

In a nutshell, you’ll be getting a high level of freedom and convenience. You will also be able to offer your customers longer payment terms.

 

These happen because once you sell to the factoring company your unpaid or uncollected invoice, they will give you cash, which is equal to the discounted face value of the unpaid invoices. The Factor or factoring company will then collect from those who owe you money on the due date that you and your customer agreed upon.

 

Other Concerns

Aside from what has already been explained, the other matters which can affect your 2014 medical factoring options include: 

  • Financing costs. The Factor’s financing costs are affected by the reliability of your customers in paying what they owe. If your invoices are made out mostly to individual customers, the financing costs will be likely higher, as there will be more risk on the part of the factoring company. Conversely, if your invoices are made out to third party companies, such as insurance agencies, which will require a B2B or business-to-business transaction between the factoring company and the insurance agencies, then financing costs will be lower.

 

  • Identity of Collector. There are companies that avail of medical factoring who are uneasy with having the name of the factoring company appear as the collector of the invoices, instead of their business name. If you are concerned about this matter, you may bring it up with the factoring company of your choice. Most factoring companies will be able to come up with a solution to such concern.

Need medical factoring? Click here

 

3 Important Things to Know About Medical Factoring for Doctors

Why is medical factoring for doctors important? It’s because medical factoring can mean the difference between a thriving practice or an endless frustration over uncollected bills and the resulting inability to properly sustain a high standard medical practice.

Medical and Financial Management Skills 

For physicians, a successful healthcare practice can be seen not only in the number of satisfied patients that the doctor treats, but also in the improved quality of life that he or she is able to provide as a result of pain and disease management.

In turn, the attainment of such results are generally dependent on two things: the medical and human relations skills of the doctor, and his or her financial management acuity. While both may be learned in school, it is only through experience that the desired level of excellence in patient care and financial management are achieved.

However, even if a physician may have impressive medical skills and is highly experienced in financial management, there are other things that could get in the way of successful health practice. Fortunately, there are also corresponding ways by which medical factoring could be the solution to such obstacles. 

Overhead Costs

One of the concerns of private health care practitioners (as opposed to doctors who work in hospitals) is overhead costs. A physician who practices in a private capacity has to deal with the payment for utilities and rent, as well as staff salaries. Overhead costs are subject to economic forces and geographical location, and their fluctuation can severely affect cash flow.

Delays in Payment

Collecting from health insurance companies can take a long time. Even if it has already been weeks or possibly months since the medical treatment had been given, physicians often experience delays in payment.

On paper, physicians may have a lot of accounts receivables but they cannot spend the figures that are indicated as receivables. Such “payments” cannot be used to pay staff salaries, nor can they be used to buy medical materials or equipment, which is why a doctor may often be cash strapped.

Again, this could be directly tied to the economy. The Corporation for Enterprise Development recently released a new study which showed that 44% of Americans are experiencing poverty in terms of liquid assets. This means they live from paycheck-to-paycheck, since they have less than 3 months savings, if any.

Although as a whole, the public still sees the importance of prioritizing health care above their other needs, there are times when matters relative to health care, such as the payment of insurance premiums, become a non-priority.

Time Constraints

Due to the nature of their profession, physicians dealing with time constraints or time pressures are a distinct part of doctors’ lives. Generally, their concentration is fixed upon two major aspects: actual patient care and the upgrading of their own skills and knowledge through seminars, conferences, and advanced studies. Such things can often reduce their time for reviewing the minute financial details of their private practice, which in turn, can cause cash flow problems.

Medical Factoring

It is in these three important areas that medical factoring for doctors become crucial. Basically, medical factoring can free up the cash flow of physicians so that they can devote their time to providing excellent medical care, instead of worrying about where to get funds. If you are a private health care practitioner, get in touch with Neebo Capital to find out how we can help you.