Why Should I Use Factoring?

By: ChrisLanchech

There are a number of benefits that you can obtain by factoring your invoices. I’ve talked about one of them already.

It’s cash flow. It doesn’t matter how successful your business has been, if cash stops coming in, then a time will come when you don’t have any.

Think of it like this. If you have a basin filled with water and you pull the plug, you have to pour in the same amount as is flowing out of the bottom. Otherwise, there will come a time, perhaps sooner than you think, when there won’t be any left.

But instead of water, it could be cash.And it’s something that can take you by surprise, especially when everything else seems to be going as well as it should.

For example, you could be filling orders and shipping them to your customers. Your customers could be delighted with your prompt service.

Or, you’re employees could be the most productive they’ve ever been.

Or your suppliers could be giving you exactly what you need just-in-time.


But, if there’s a delay for any reason in the payment of your invoices, you could suddenly find that there’s no cash left in the company to do any of that.


How would you feel if that happened to you?


Factoring can do more than just keep your firm going. It can also help you to maintain your creditworthiness.

The news today is replete with examples of people who have been thrust from the homes they’ve lived in for 30 years, because when they started missing mortgage payments, the banks foreclosed on them.


What does that teach us about how much the banks trust the firms we own to help us when we need it? If nothing else, it demonstrates that when the chips are down, they won’t.


Whatever they were willing to do for us in the past, matters not a jot.


And so that means that we have to look for other options and have them in place before we need them. Because, as much as we dislike them, banks are still the place where we have to go, in most case, to get loans for capital expenses.

We can’t live with banks, and yet we can’t live without them. If your creditworthiness has been damaged, for any reason that you care to name, your bank simply will not loan you the money that you need when you need it.

If truth be told, they may not anyway. But, your chances are greatly diminished if your credit rating is poor.

And so, rather than waiting until the last little bit of cash is about to drip out of your company, my suggestion is that you make factoring a part of your firm’s strategy.

In today’s economy, you simply don’t know when you might need some extra money, just to tie you over. And you can’t afford to leave something as important as the survival of your business until the last minute.


The Necessity of Cash Flow

Banks are notorious for offering you money when you don’t need it, but demanding it back when you do.

If you add to that the growing propensity of customers to pay on the last day of the grace period . . . or later, then you’ll know that even the healthiest businesses can find themselves in dire straits before they know it.

 How did we get into this mess?
To a certain extent, it doesn’t matter.

But for the record, we can still remember when the banks were bailed out. Some thought they were too big to fail. (Pride goes before a fall.)

Others preached ethics, but went for big profits instead.And still others decided that the laws applied to everyone else, though not to them.

But probably the most frustrating thing to come out of the financial debacle is the fact that when the government handed over the billions of dollars required to keep them from going bankrupt, they made no attempt to hold these same companies accountable for the way they spent that money.

And so instead of providing financial support to businesses, they simply paid themselves the bonuses that they couldn’t have afforded beforehand.Whatever the causes were, it’s businesses like yours that have been left to suffer.

I remember someone telling me that he was property rich, but cash poor. And I imagine that you could be in the same situation. You have the plant and equipment, you have people with the skills you need, and you even have a relatively full order book. But, your cash flow could do with some help.

There’s just too much time between when you send out your invoices and when you get paid for them. Cash flow is an indispensable part of any successful business. And shutting it off in a firm can have the same effect as staunching the flow of blood in the body. Neither can survive for very long.

Factoring is one means that you have available to fight back. And I use the term “fight” for a reason. Business is something of a war.

Some will argue certainly it always has been and always will be. But I don’t think that’s the case at all. There is still a lot of collaboration and cooperation going on to this day, and social media may help to make it even more so.

But there is something of a fight involved, especially when it comes to getting the money you need to keep yourself going. The war, however, seems to be against the whims of your bank and economic pressures, rather than that of your customers.

In case you’re unfamiliar with the term, factoring is nothing more than a means through which you can obtain cash quickly via your invoices. It’s not a loan. It’s a sale.

You sell your invoices at a bit of a discount to another company. That company pays you cash for them, and then you’re able to put that money directly into your business.

And by doing so, you can keep your cash flow going.

Factoring Company Benefits: Stabilizing Business Cash Flow

By: Chris Lanchech


Some businesses refuse to turn to a factoring company because they believe that doing so means they could incur more debts. But this is very far from the truth. There are many reasons why factoring your accounts receivable can be beneficial for you. Simply take the following into consideration:

factoring companies, company factoring
Neebo Capital specializes in the Factoring of invoice receivables for companies who maintain commercial accounts receivables.


Benefit #1: You Will Have a Starting Capital

If your client gave you a huge project, you can expect that the first few months will be quite difficult.

You won’t have any immediate funds to start with. You won’t have cash for orders, employee benefits and incentives, and production expenses. Most of the time, businesses take out a loan just so they can get started with work. But with the help of a factoring company, you’re getting paid for your work quickly. In a way, it’s like the client has already paid you 80% in advance.


Benefit #2: You Get Your Money Fast

Have you ever tried getting a business loan from a bank or a credit union? It could take two months for a loan of $60,000-$100,000. When you turn to invoice discounting the procedure usually takes no more than five days. In just five days you’ll have your invoice purchased and the money deposited to your bank account.


Benefit #3: Credit History is Not a Factor

A new business will not have good credit standing. This is because it has little to no credit history to show. A business starting to fall off the grid will have weak credit scores to provide. In both cases, getting approved for a loan can be tough. However, factoring businesses do not look into credit history. Instead, the company will assess the value of the open invoice and of the client that is going to pay for it. This means that a small or new business that is still thriving or a company already leaning towards debt can still get money up-front to regulate cash-flow and stabilize its finances.


Benefit #4: Having a Wealth of Funds in Preparation for Seasonal Demands

As months go by your business will see a flux in demands. If you put out several or all of your open invoices for account receivable factoring you will have a steady supply of cash right from the start to prepare you for these issues. You never want to be caught off-guard and factoring invoices is a sure-fire means of being prepared, financially.


If you need immediate cash without suffering from the downfalls of a bank loan, approaching a factoring company is a very smart – and in many ways the best – option you can turn to. Check out the various factoring companies online and decide which among them will offer you the best deal.

Temp Staffing companies Can Help Small Businesses Develop

August 15, 2012

Think of this, the national employment rate in June was 8.2%. That means that there are a lot of GOOD people out of work. If your business is seeking a qualified individual but do not want to higher for the long-term I highly recommend looking into a temp Staffing company.

Temp Staffing companies Can Help Small Businesses Develop
Another benefit using a temp Staffing company to find short-term employees is you are able to expand your reach to highly experienced workers qualified in special areas. According to The Wall Street Journal after surveying 811 business owners found that 31% reported “they had unfilled job openings in July because they couldn’t identify applicants with the right skills or experience.”

Additionally, 41% of 154 small manufacturing firms surveyed reported they were un-able to find skilled and experienced workers.


Most business owners get applications from their websites, and walk-ins. Sure they get tons of applications, but a lot of the applicants have similar skills. By leveraging the databases Temp Staffing companies have you can narrow down your search. Business owners told The Wall Street Journal “We could grow a lot faster if we could find the right people.”

In the past it would make sense to train employees. However with the high turns in technology there may be a steep learning curve. Or maybe you’re looking for an applicant with a skill you don’t possess like PHP coding.

We recommend looking to Temp Staffing companies for new talent. We also recommend looking to Neebo capital to help you with your cash flow so you can put on new workers in the most efficient way possible. Maybe you have cash flow tied up in your accounts receivable or you have tried working with Temp Staffing companies in the past but they pay too slow. Either way give us a call and we will gladly help.

Good Luck

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.