Construction Company Finds Factoring Benefits For Payroll

Generally it appears that the bigger the job the slower the payment. Think about a construction company that secured a contract to service an event for a very large business. The large company pays out on the 10th of every month, but the construction company pays its employees on the first.
construction_factoring_benefits
The problem is, The construction company will need to pay their employees before they receive payment from the large company. This small business does not have the cash flow to buy all of the required supplies for the event and pay their employees. What options does the construction company have? Delay paying their employees? Implement for short-term credit with their bank? It’s important to pay employees on time and seeking credit from a traditional financial organization might take more time than wanted due to the demanding approval process.

One remedy to solve this construction company’s cash flow problem is to make use of account receivables factoring. This way of short-term financing would permit the construction company to invest in supplies, pay vendors and meet payroll.

It is crucial to know that when your business is experiencing difficulty meeting payroll you will find a number of remedies available to you. Staying aware of these remedies is essential, particularly when time turns into a factor. Applying for short-term credit from a bank normally takes time and the application process is tough. Take the time to learn about the options available to your business now so that if you end up in a situation where you can’t meet payroll, you’ll know what to do. Have a solution before the problem arises.

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.

Whats Medical Factoring | Define Medical Staff Funding

Medical factoring can be an industry specific type of factoring financing that is definitely designed to help companies that bill Medicare, Medicaid or private insurance companies. Medical factoring may help doctors/physicians, small hospitals, home care workers, group homes and DME’s.

One of the biggest difficulties for companies in the medical field is how long it requires to get a claim payed off. Although when done the right way some claims may pay quickly, most medical insurance claims can pay in 30 to 45 days. This generates a cash flow problem for companies because they have to use their capital reserves to deal with expenses while they wait to get paid. This can become worse if the company is growing quickly, because it forces owners to dip into savings – or worse yet – forces them to postpone key supplier or employee repayments.

Medical factoring can easily solve this problem by offering you with a quick payment for your medical claims. It truly does work by using a factoring company as an intermediary. You sell/assign your medical claims to the financial company who advances you funds for them and hold the claim until maturation. The transaction is then settled when the insurance carrier (or Medicare/Medicaid) pays the claims.

Generally, the transaction works as follows:
1. You submit your approved claims to the factoring company
2. The factoring company provides the initial advance of 70% (or more)
3. Once the claim is paid, the factoring company provides the closing advance of the remaining 30%, less the financing fee.

The sums that are advanced (in step#2 and step#3) vary based on the sized of the business and the size of the claims. Among the advantages of medical receivables factoring is that it’s easier to obtain than conventional business financing. It’s available to both large and small companies – and substantial assets are not required to qualify.

How to sell staffing invoices & accounts receivable

Payroll funding contracts represent an intricate, long-terms bundle for transactions involving the staffing company and a payroll lender. This blog is about the process of selling your invoices!

These terms may be incredibly critical to preserve your company’s profitability while dealing with great hiring expenditure and employee turn over levels. NeeBo capital is ever-ready to co-operate with your company in creating an acceptable contract that caters to all of your personal needs.

NeeBo Capital provides both payroll funding in addition to advance payroll funding solutions for staffing companies of any size, whether its a big recruitment company having big corporate clients or a small start-up. We’re exactly about allowing you to grow your hold over your customer base.

Whenever you decide on a payroll funding and start to negotiate the contract, consider the following issues:

Commercial Experience: NeeBo Capital beginnings in the business proceed entirely back in 1959. They’ve helped a number of leading staffing companies to prosper and move forward in their small business ventures.

Terms of Arrangement: The length of a payroll funding contract could possibly be for one month only or extend to many years. A contract with a 1 month or less length will typically have higher costs and linked interest rates than the usual long-term contract.

Interest Rates: Dependent on your history and staffing level, the rate of interest will fluctuate. Start-up companies may wind up having to pay higher rates in comparison to well-established large companies.

Policy of Cancellation: You may be accountable for a default provision in case you stop funding or even end the agreement. Penalty charges are utilized by NeeBo Capital to cover financing of new account installations, start-up phase expenditure, and the time and diligence spent on the arrangement right up until that point by the funder.

Advanced Rates: This pertains to the total that’s been advanced to you as soon as the funder bought out your invoice. A ninety percent rate, so, indicates that the funder has advanced nine thousand dollars from a 000 invoice to you. The the rest of the balance has been retained as being a reserve.

Billing: An additional important element that needs to be mentioned talked about based upon the expected rate of aging on your invoices is any overdue payment costs due on your company. Variants of those expenses consist of single charges each thirty days and even every 90 days, dependent upon the business you decide to try. It could also be a fixed percentage-charge every single day following the passage of 30 days.

What’s essential is that interest should be paid to such careful details pointed out earlier to be able to have yourself as well as your staffing company the best possible rate for payroll funding. Dedicate ample time evaluating the factors in play before choosing a suitable pay-roll funding company.

An outstanding payroll provider will tell you far in advance concerning each fee variety they’ll be charging on staffing funding. Practically nothing is going to be concealed on your part, and they will be responsive to your entire questions. Anything and you have the full privileges to question their intentions. Get in touch with NeeBo Capital today, you will be selecting a payroll funder that will deal with your company’s staffing problems like its very own when it comes to payroll funding.

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.

Small Business Accounts Receivable Factoring

With regards to the financing industry, little attention is given to the “very small” business market – especially companies with revenues that are less than $45,000/month.
This market does not get the attention it deserves for multiple reasons; For many financing companies, these small accounts don’t generate enough revenue to make it worth their while. Moreover, many consider them to be riskier because small companies usually don’t have the management, systems, and client a base that larger companies do.

However, this market has created an opportunity for companies such as NeeBo Capital that specialize in Small Business Accounts Receivable Factoring services. Small business factoring, as it is better known, is a modified version of factoring invoices that is designed to work with small businesses.
NeeBo Capital strives to provide a more personalized service, enabling the business owner to focus their efforts at growing their business. For example, few small companies have dedicated departments (or even dedicated employees) to handle invoice tracking, verification and collections. Many companies that specialize in Small Business Accounts Receivable Factoring have dedicated staff that will help the owner with these tasks.
One advantage of small business accounts receivable factoring is that it’s easier and faster to obtain than most conventional financing plans. To qualify, the company needs to be in good legal standing, have no liens/judgements and have customers with solid payment tracks. This makes small business factoring an ideal solution for small companies with aggressive growth plans. Visit NeeBo Capital today and speak with the staff for a free no obligation consultation.

What is Asset Based Lending | How it Works

For business people reading this post we congratulate you. It actually is important to know the essentials of asset based lending. Asset Based Lending is a type of revolving commercial financing that permits a business to borrower against a discounted value of their assets. Asset based lenders concentrate on the worth of the collateral during the underwriting process a lot more than the credit history of your organization.

Asset based loans typically have several different collateral pools and advance rates as part of the structure.
Below are the basics of an asset based loan:

Pricing
Because Asset based lending is applied for businesses with revenue from $1,000,000 to well over a Billion, pricing differs greatly. Large, strong borrowers can borrow at close to commercial paper rates but most asset based loans are created to companies with revenue less than $100,000,000. The “all in rate” for these loans is typically between LIBOR + 8% and LIBOR Plus 20%. Rate depends on the size of the loan and the financial strength of the borrower.

Structure
Accounts Receivable – Average advance rates between 80% and 90%. Most asset based loans have got the majority of the loans towards the accounts receivable.

Inventory – Traditional advance rates between 35% and 65%. Advance rates depend on the salability of the inventory in a liquidation. The more specialized the inventory, the low the advance rate

Machinery and Equipment – Advance rates for asset based loans are typically 60% of the orderly liquidation value. A large amount of lenders will require the Machinery and Equipment to be reappraised every year.

Real Estate – Advance rates are ordinarily 50% of the appraised value.
Asset based loans characteristically demand the borrower to revalue the assets whenever they take an advance. This is often made by submitting what’s called a “borrowing base” to the asset based lender which is quite simply a spreadsheet that gives the current value of the assets. Since the value of accounts receivable and inventory change often, the borrowing base calculations focus on these assets.
For the most part asset based lenders require a personal guaranty from the majority owners of the business.

Typical asset based loans require that all customers of the borrower remit payment for invoices to a lockbox controlled by the lender.

All asset based loans have loan covenants. These may very well be very restricted financial covenants depending on the cash flow and balance sheet of the organization.

Underwriting
Underwriting an asset based loan can take between 30 and 60 days. The lender will quite often send a field examiner into the business to examin the books and records. Be expecting to have most of your assets appraised. The cost of the due diligence will be the responsibility of the borrower. Which include legal costs it is not unusual for the total expenses to exceed $100,000 and could be as much as $1,000,000.

At NeeBo Capital we focus on lending against accounts receivable to companies with revenue less than $10,000,000. We don’t charge our clients for due diligence and because we only lend against accounts receivable the entire process is generally done in under a week.
Our system is completely electronic so we are able to keep overhead down and pass that cost savings along to our clients by eliminating line fees, wire fees and monthly maintenance fees. With NeeBo Capital you only pay for what you use.
For more information about our electronic, online financing program please click the button below.

Picking a Local Factoring Company?

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.

Finance a Freight Brokerage with cash now

Today Freight Brokers are adapting to industry changes and continue to earn money. However one factor has remained the same for freight brokers, and that is getting a line of credit or business loan. Many smaller sized freight brokerages continue to limit the amount of cash flow and growth they can build.

What do you do to address slow paying customers? A slow paying customer can put a real strain on cash flow. If you put pressure on your customers to pay you early you run the risk of losing business, and in the freight brokerage business drivers need to be paid on time.

Many freight brokerages spend too much time balancing reserve accounts to cover the gap between collecting 30 to 60 day receivables. But mismanagement of the ‘all mighty’ reserve account is a sure way to create stress and poor cash flow.

What we recommend at neebocapital.com is invoice factoring freight bills. By picking this route freight brokerages cover expenses early, pay drivers on-time, offer their buyers 90 day terms, and spend more time focusing on growth. The best part is you can get the cash in less than 24 hours and the fees are typically less than 1.59%.

How does this work? Who are these cash flow providers at neebocapital.com and how do they get freight bills paid so fast?

Good questions, Neebocapital.com acts as an intermediary between freight brokerages and customers. Neebo advances the capital against due invoices. This gives brokerages capital they need on hand to meet obligations, fees are not collected by the factoring company(Neebocapital.com) until after your invoices are paid in full. Freight factoring transactions are safer for freight brokerages because factoring companies may assume the risk on your invoices by advancing you the capital needed.

One of the big advantages of factoring invoices is that it’s easier to get than other forms of financing. To qualify for this solutions, your brokerage must work with shippers that have good commercial credit – this is the most important requirement. Also, your company must have a good track record and be free of liens or judgments. This solution is also available to startup freight brokerages, provided the company owners and operators have industry experience.

We Visually Define Factoring For Business Owners

Factoring Defined Visually

The process of receivables financing is really simple when we see it visually. This is how the circle works; you deliver a product/service to your customers, we immediately deliver you capital (80% to 90% value of the invoice) instead of your business waiting weeks to collect on the invoices, Lastly we collect the invoices from your customers and pay you the remaining 10% minus our service fee. (usually 1.5% )

-Its That Simple