How to Implement a 2012 Factoring Strategy Into Your Business

Funding a business in our current economic climate is unquestionably a challenge. Especially with banks and lending institutions restricting use of working capital, numerous companies have found it challenging to fund their everyday operating expenses. Businesses that would normally be considered as financially strong are having a hard time managing cash flow and securing credit that is so essential to their needs and growth goals.

Dont loose hope there is a financial strategy that works in 2012…

This financing strategy is enabling companies to make use of their existing assets to finance their company. This strategy dates back over five thousand years and it is one that enables companies to make use of liquidity built up within their own assets to finance their everyday cash flow needs. Factoring Invoices is this financing strategy businesses can consider when conventional lending institutions are no more an option.

However, the issue then becomes: just how does a company incorporate Factoring their invoices into their business strategy??

When you are looking at factoring invoices, consider it is a form of outsourcing your companys account receivable . Factoring Invoices works by allowing companies to sell their clients un-paid invoices to a Factoring company like Neebo Capital. In return, the factoring company (Neebo Capital) will extend credit based on the value of the invoices and the capability of your client to pay back those invoices.

You win because your Company secures the business creditline you need, without having the responsibility of waiting for clients to pay. This improves cash flow and allows your company to use capital on hand to finance business opportunities your team has.

Neebo Capita
l has low rates, and a motivated staff to work through any financing hurdles that may face your business.

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.