NeeBo Capital Blogs – Page 28 – The Best Info For Factoring…

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

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.

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.

Working with Factoring Brokers: What You Need to Know

For many businesses today, the traditional method of securing a loan from a bank is becoming less popular. Fortunately, there are alternatives to choose from, although choosing from among these methods can be quite confusing. One of the more popular forms of financing today is a method called factoring, in which your accounts receivable are exchanged for cash of up to 90% of your invoice value. Again, this raises the question as to which factoring company to choose and what kind of terms would be most appropriate for a particular business and situation. Working with factoring brokers, however, can be a way to solve this problem.

What is a Factoring Broker?

A factoring broker is essentially a person or a company that helps to quickly find the most appropriate factoring company for you. A broker has the training, experience, and the network of contacts that can help the search for a factoring company go much faster and with better results.

In a way, they’re like a real estate broker. When you’re trying to buy real estate, you have to look for the right properties, inspect them yourself, and then negotiate the right terms. But a more efficient way is to simply tell a real estate broker what type of property you’re looking for, and then the broker can guide you to the right properties with the best terms.

The Services of a Factoring Broker

Once you find a good factoring broker, you can benefit a lot from the services you receive.

· Working with factoring brokers will enable you to present the best side of your business. This will increase your chances of getting the financing you need, and it may also result in getting much better terms for your company.

· A broker can clearly explain what each factoring company is offering. The problem with a few factoring companies is that some of them are unable to explain their fee structure more clearly, which often results in a borrower being saddled with unexpected and unwelcome fees. As a factoring client, you need to have a clearer picture of how much the entire factoring agreement will cost you. When your understanding doesn’t match the details in a factoring agreement, it can be a costly mistake on your part. With a factoring broker, you know for a fact which factoring company is offering the best option for your business.

· Factoring brokers are also more knowledgeable about the various strengths of specific factoring companies. They may be able to identify which factoring companies have the best track record in general, which ones are the best for your specific industry, and which ones are better in providing the amount you need. For example, some factoring companies do best when they offer relatively small amounts of less than $50,000, while other companies may specialize in offering funding for up to a million dollars.

Choosing a factoring company can be a crucial decision that can determine the course of your business. In order to make the right choice, you’ll need a professional perspective, and that can be provided by a good and experienced factoring broker.

Working with Factoring Brokers: What You Need to Know

What is a Factoring Broker?

The Services of a Factoring Broker

Once you find a good factoring broker, you can benefit a lot from the services you receive.

Factoring Loans for Construction Companies

Banks nowadays are getting a bit too anxious about who they lend money to. They tend to be hesitant about lending to various small business enterprises, and that includes construction companies. According to the US Small Business Administration, at least 74% of small business applications are turned down, and that may be a conservative estimate. The real figure may be as high as 90%. When a construction company needs a quick business loan to cover an emergency, banks loan procedures are generally too slow anyway, and that’s where factoring loans for construction companies come in.

How Factoring Works

In a factoring agreement, the construction company exchanges accounts receivable for immediate cash and the factoring company even takes the responsibility of collecting the debt from their clients. This frees the construction company from having to hire personnel to chase invoices, and its efforts can then be concentrated on the actual construction work. In a non-recourse factoring, the factoring company even takes the risk of non-payment—the construction company is not liable if their client refuses to pay.

Let’s take a situation in which a construction company has two weeks to come up with a payroll of $100,000, but the company doesn’t have the cash to cover it in time. However, the construction company does have a $200,000 invoice that will be paid up in a month’s time. For the sake of this example, let’s say that the construction company approached a factoring service that gives 75% upfront and charges a rate of 5% per month. So, with those terms, the construction company can then hand over the invoice to the factor so that it can get $150,000 in time to cover the payroll. Once the factor receives the payment from the client, the construction company then gets $45,000, while the factor takes $5,000.

Remember though that different factoring companies have varying rates and fees.

The Advantages of Factoring for Construction Companies

Factoring loans for construction companies offer a lot of benefits, such as:

1. The construction company saves money because they don’t need to hire personnel to collect money from their clients. This gives them the opportunity to focus all their attention and energy into actual construction work.

2. The infusion of cash is almost immediate. The approval rates for factoring loans are extremely high compared to traditional bank loans, and the procedure is short and efficient. The quick transfer of funds can be used for all manners of time-sensitive situations, from covering payroll or buying much needed supplies.

3. The interest rate for factoring is also much more reasonable than the rates demanded by credit card companies. Credit card companies impose high interest rates all the time and construction companies may also have to pay high late fees when missing a payment. In contrast, the percentage the factor receives from the invoices is fixed.

Essentially, construction companies that use credit cards for financing can face a lot of unforeseen problems which may only worsen their financial situation. With factoring, however, many problems that require a quick infusion of cash are addressed quickly and safely.

Sub-Contractor Business Loans

If you operate in the construction industry, you would know how difficult it is to be limited with the amount of working capital you have. It’s difficult to grow, and even more difficult to succeed when you don’t have enough funding. With subcontractor business loans however, you are given maximum flexibility and freedom to utilize the funds as needed, which is important in your line of business.

The construction industry is one of the biggest industries out there. According to the United States Census Bureau, the total value of the construction industry, in millions of dollars is 943,139. Additional statistics show that as time goes by, the value of each construction project (such as a house) increases. This means that the industry value increases as well. Clearly, the construction industry is a very lucrative industry to be in, but all subcontractors also know that being in the construction industry is tough.

Aside from facing stiff competition from other subcontractors and rising cost of raw materials, the projects are usually high value and take months to complete. Winning a contract means a great deal. In contrast, losing out on a contract bidding and not getting the next project of your current customer could mean a lot in terms of opportunity lost. The construction industry operates differently, and there are many financial challenges that they face. This is why sub-contractor business loans are available.

Special needs of subcontractors

A subcontractor faces additional challenges because of the nature of the industry and the nature of their role. These are some of the special needs that make being a subcontractor extra difficult:

1. Amount of Working Capital Needed

When you’re a subcontractor, you need to advance a huge amount of money to move the construction project. If you’re constructing a building for instance, the project won’t materialize unless you put in the needed working capital to buy the raw materials, pay for the labor, and fund all the expenses related to the project. This means the working capital you need at any give time far exceeds the usual working capital needed by other types of businesses.

2. Unique Timelines

In many cases, the client will only pay a subcontractor in full once the project is completed. This becomes a problem because you won’t have enough money to pay for your day to day expenses in the mean time. It’s a chicken-and-egg situation, because you can’t exactly wait for another contract to be completed just so you can start on a new one. If you want to really grow your business, you need to turn to financing and this is why Sub-contractor business loans exist.

3. Other Players to Consider

If you’re a subcontractor, you’re also usually not paid until the client pays the general contractor. This adds another layer of complication, because it means you’re not only relying on just one player. In addition to the actual client, you also need to think about the schedule and timelines of your general contractor.

Providing subcontractors with flexibility

If you operate in the construction industry, you would know how difficult it is to be limited with the amount of working capital you have. It’s difficult to grow, and even more difficult to succeed when you don’t have enough funding. With subcontractor business loans however, you are given maximum flexibility and freedom to utilize the funds as needed, which is important in your line of business.

The Fastest Way to Get a Business Loan

When you’re a business owner, you will sometimes need to take out a business loan. However, getting a bank loan is not always the best option. This is especially true when you need cash to pay some overdue bills, buy new equipment, or invest in a profitable venture with a short window of opportunity.

Bank Loans Take Time

Traditionally, most businesses take out a loan from a bank. This can be an excruciatingly slow process, and it will take an eternity if you still want to compare loan rates from several banks. On occasion you may even go through this interminable process only to find out that the bank won’t grant you the loan.

For traditional bank loans, there are several things you can do to speed up the process and to increase your chances of getting approved. In general, you need to make sure you have a good credit rating and credit history. You also need to have verifiable income and profit, as well as enough assets to use as collateral. You must have all your documentation ready when you make your application. But even if you have complied with all the requirements, loan applications could take a week or more. Fortunately for you, there’s another way to secure a “loan.”

Factoring

Factoring, which is sometimes called accounts receivable financing, involves exchanging your accounts receivable for about 80% of its value. The remaining amount will then be held back until the full payment is collected. The factor handles all the transactions, credit assessments, and collections, and receives a fee for their services. The factor usually charges a certain percentage (2% to 3% is common) of the face value of the accounts receivable, with a tiny percentage penalty for late charges.

The two most notable advantages of factoring are that first, the application process is much faster compared to taking out a bank loan. It’s not unusual for the approval to be given within just a few days after all the requirements have been met. The other main advantage is that the payment for the loan depends on the flow of customers. During lean times when business is slow, the factor can also adjust your payment amount.

Quicker Alternatives

There are still even faster ways of getting a loan, although they come with rather serious drawbacks:

Using a credit card is a popular form of business financing, and if you already have a credit card then it could prove to be the fastest way to get a business loan. However, the interest rates can be truly high, and the penalties for late payments can have dire consequences on your finances.
Another relatively quick way to get a business loan is you use your friends and family as a source of financing. About $89 billion are borrowed from family and friends in the US alone every year. This may result in lower interest rates and more flexible payment terms, although most experts say that borrowing money from people you know can damage personal relationships.

It’s obvious that when comparing all possible ways of getting a loan quickly, factoring is the most viable alternative to get a business loan. It allows you to get the money you need quickly, and the interest rates and fees are more than reasonable.

Unsecured Loan for the Construction Industry

The construction industry rakes in billions of dollars year after year. Private construction projects gross 670,799 million while public construction projects total 272,340 million. For private construction, residential projects are just slightly higher than non-residential projects. These figures show that being in the construction industry means you will never run out of projects, because there will always be new infrastructure to build. However, it also means that it’s a highly competitive industry with many players. And when it comes to competition, it’s really all about who gets the contract and who has the biggest working capital to ensure timely completion of projects given to them.

The Problem Faced by Construction Companies

In the construction industry, it’s all about committing to delivery. A construction company won’t be able to commit delivery timelines to prospective customers if they don’t have confidence in their ability to deliver in the first place. The ability to deliver on projects is based on a lot of factors, and these include:

· Timelines: When bidding for a project, the client will be looking for certain timelines because they will always have project completion time in mind. For instance, if they need a building erected by a certain month, they will work with the contractor that can meet this deadline. Timelines therefore are very crucial.

· Capacity: Each construction project will be different in size, so this means it will have a different set of requirements in terms of capacity. A client will choose a contractor that can commit to the size of the project based on its current resources. According to the Bureau of Labor Statistics, the total construction industry in terms of number of people averages a total of around 5,941 in employment. And that’s just your people. This will be spread across various contractors and subcontractors, so capacity will really depend on how many people you have in your employ as well.

· Available working capital: Directly related to timelines and capacity is the available working capital of the construction firm. If you’re sitting on low a working capital, you can’t confidently make a pitch and get contracts left and right. This is why knowing where to get an unsecured loan for the construction industry is important. It helps you get the working capital you need to grow and get projects.

The beauty of unsecured loans

When you have access to an unsecured loan, this will be to your advantage because normally, applying for a loan is very tricky. Traditional financing institutions such as banks would have a long list of requirements and are quite stringent when it comes to approving loan applications. You’ll need to have a stellar credit history and track record, as well as a lot of other prerequisites. Collateral (in the form of equipment, real estate, and others) is also usually a requirement for such type of loans.

Many construction companies find these requirements quite difficult to meet. But the beauty of applying for an unsecured loan for the construction industry is that you don’t need any of these requirements. Instead, these lenders will look into the credibility and credit-worthiness of your client.

Two Financing Programs to Solve Distributors Cash Flow Problems

Distributors and Wholesalers Rates Starting At 0.69%
($50,000- $5,000,000)
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Like any other business, distributors face cash flow problems on a regular basis. This is particularly true for small and start-up companies who have to supply goods to their clients but need to wait for weeks and even months before they collect payments. Cash flow management is particularly important for these entrepreneurs as they also have to ensure that they are liquid enough to pay for their supplies, workers, office rent, utilities and other operating expenses. But how can a distribution firm settle these obligations when it has to wait for months before its clients pay up?

Factoring of Invoices

One way that a distribution firm can solve its cash flow problems is by factoring its invoices. Distributor invoice factoring is a reliable way for enterprises to raise money without falling into debt. In this set-up, a distributor presents its invoices to a third party lender who will pay in advance while holding on to the invoices until the clients pay back. The amount can be as much as 80% of the invoice.

Factoring of invoices presents several benefits to firms in the distribution business. One is the lack of collateral requirements. Firms applying for factoring line won’t have to present real property or vehicle as collateral unlike in a traditional bank loan. Another advantage is the swift processing of the factoring application, which could take a few days or even a couple of hours.

Purchase Order Financing

Another route that distributors can go to is by applying for a purchase order (PO) financing. This facility is ideal for small businesses that have just landed a big contract but lack the money to complete the transaction. In PO financing, a distributor also presents the purchase order of its clients to a lender. In turn, the factoring company will advance the amount indicated in the invoice and remit the remaining amount once the client pays up. In purchase order financing, the distributor relies on the creditworthiness of its client to be able to access to quick cash for its operational expenses.
Benefits

Both factoring and PO financing provide a lot of benefits to distribution entities especially those that are just starting to grow their businesses. The first and perhaps most obvious advantage of these financing facilities is the money that enterprises can quickly get. Access to fast cash is essential for any distributor who has numerous bills to pay.

The second advantage is the lack of collateral requirements. Businessmen who are in the distribution sector won’t have to put up their houses or vehicles as collateral when applying for both facilities. Instead, they are only required to show the invoice or purchase order from their clients.

Distributors that need immediate funding for their day-to-day operations can apply for a purchase order financing or invoice factoring. While there are numerous financial companies that offer this type of financing, a wise entrepreneur should approach credible entities like Neebo Capital. We can assure you that your application for a purchase order financing or invoice factoring can be processed in a day or two. We also offer the best rates and flexibility to increase your credit line as needed.

How to Get an Unsecured Business Loan for Construction Contractors

There are certain businesses and industries that rely more heavily on working capital compared to others. Operating these types of businesses will necessitate putting up enough working capital to meet the needs of your customers, even if you need to wait weeks or even months before you get paid. A good example of this would be the construction industry. The nature of the industry alone means you need to have access to an unsecured business loan for construction contractors, at least if you want to survive and meet the demands of your market.

Working Capital for Construction Contractors

When you’re in the construction business, you take on projects. One project as a contractor could mean big bucks, but this project usually takes time to complete. You will need capital to secure the equipment, machinery, raw materials, and labor. Depending on your agreement with the client, the full payment could come at the end of the project, which means you will need to secure enough working capital from the start of the project until it is completed. If you don’t, then you won’t be able to finish it.

This is why getting access to an unsecured business loan for construction contractors is necessary. It could mean the difference between survival and failure of your business.

Bank Loans and Lines of Credit are Not the Ideal Solution

If you rely on traditional financing methods like going to a bank and applying for a credit line or a loan, you will need to go through a tedious process of proving your credit-worthiness and putting up collateral. Fortunately for you, there are actually many options available for those who need additional funding, and going beyond the traditional route could actually mean a faster processing time, less stringent requirements, and a lot of flexibility.

For instance, instead of having to put up a collateral, you could make use of your accounts receivable or other existing assets like inventory and purchase orders to be able to secure additional funds. As a result, you can take on more projects and increase your profits.

What You Need to Consider

But, even if you have access to an unsecured business loan for construction contractors, you have to consider several factors that could affect your financing agreement and your choice of lender.

First, you need to consider the maximum amount you can borrow, and what this loan will be tied to. You should also consider the flexibility of the loan, because it’s always better to have full control over how you will spend the money. The fees you will have to pay should also be considered of course, although depending on the financing method that you choose, this is usually just a percentage of the receivables you’re turning over to the lender.

If you are in need of additional business funds, do check out the business loan options offered by Neebo Capital. We have several financial solutions that cater to different industries and businesses, including construction contractors. Keep in mind that opportunities are harder to come by these days, and it absolutely makes no sense to lose projects just because you don’t have enough working capital. Get in touch with us and find out how we can help you!

Distributors and Wholesalers Rates Starting At 0.69% ($50,000- $5,000,000) Click Here

Distributors and Wholesalers Rates Starting At 0.69%
($50,000- $5,000,000)
Click Here