Account Receivable Services For Your Business

There are many websites online claiming they can provide your business with cashflow, but who can you trust for reliable account receivable services. Well, that’s a good question. But the truth is it depends what type of account receivable service your business is looking for:

Are you looking for a one-time funding arrangement?
If so then spot factoring might be best for you. Spot factoring is a account receivable service in which you turn over one invoice for funding. Spot factoring typically comes with higher rates in the neighborhood of 3-5%. (more expensive because it is a one time arrangement)

Are you looking to deal with a slow paying customer?
How long are we talking net 30, net 60, or net 90? Keep in mind that most of the account receivable services you find online are advertising low rates for 15 or 30 days. If your customer is paying beyond that make sure you negotiate with the factoring company exactly how you will be charged if payment goes late. ( factoring companies usually add an additional 1% per 15 days)

Is your business growing fast and you need cashflow?
Know the difference between account receivable services and purchase order funding. If you are looking to get cashflow or letters of credit to pay suppliers then your are seeking purchase order funding. If you are looking to cash in your accounts receivable or sell you invoices so you can gain cash on hand then you are looking for account receivable services.

Other reasons?

Our clients come to us with a range of requests to help fix their cashflow. Sometime life can throw you a curve ball ( a car accident or death of a loved one) we understand these things can have a tremendous effect on your accounts receivable and day to day cash flow. See the help of a reliable factoring company & read our free ebook explaining the pros and cons to account receivable services. 🙂

If your business is experiencing a strain on your cash flow give us a call toll free at 1-888-382-3766.

What is Factoring?

By: Chris Lanchech
What is Factoring?

What is factoring is a good question, because most business owners can not define factoring. If you own a business selling goods or services on credit terms then odds are your business can benefit greatly from a finical tool called factoring.

Factoring is a method of selling your accounts receivable or invoices. Factoring companies advance your business 70-90% of your invoice amounts. When your customer pays the invoice in the future the factoring company pays you the remaining 10% minus a small factoring fee. This fee is typically 1.5% to 2.5% depending on industry and other variables.

Why is factoring a popular finical too for business owners?

good question, to answer this lets use a trucking company as an example. Generally a trucking company bills its customers on credit terms such as net 30. However the trucking company has weekly expenses like tires, tolls, gasoline and beef jerky. Okay maybe they don’t spend a lot of cash on beef jerky but you get the point.

Now the trucking company will turn to a factoring company for an advance on their invoices. For example a $10,000 invoice > factoring company advances 90% ($9,000) > the customer pays the invoices in 60 days > the factoring company sends the trucking company the remaining 10% minus a factoring fee 1.5% > The trucking company paid $150 ($10,000 x 1.5%) and got their cash without waiting.

This small factoring fee is well worth it for many businesses that sell on credit because they greatly benefit from having cash in their hands without waiting. Business owners also save money by having cash in hand faster without waiting to get paid. How?

They can pay their suppliers faster and take advantage of discounts, they have cash on hand to handle marketing and new projects ect.

To see the pro’s and con’s of factoring click here or visit neebocapital.com and check out the free ebook about the pros and cons of factoring.

Good Luck!

Accounts Receivable Financing

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To Get A Fast Quote for your Businesses Cash flow Needs
Click Here Our Factoring Company offers credit lines starting at $5K up to $50 Million. Factoring provides working capital for your business, visit our website for a fast proposal. Our 30 day rates are as low as .59%

Factoring VS Bank Loans

Just about the most common statement I hear individuals make is that factoring is far more expensive than a loan from the bank. This comparison is like comparing apples & oranges but most business owners still believe it. The reason is because factoring is a financial tool that few business owners fully understand.

First, lets make it clear that when a company can qualify for sufficient financing from a traditional bank and that is the very best financial option for the business then factoring need not to be considered.

However if a company is unable to obtain adequate financing from a bank then factoring may be a better option for small businesses.

first- Factoring is not debt financing, you don’t receive money like you will from a traditional bank. A factoring company actually purchases the invoice from your business, therefore the invoice is an asset you’re selling. These invoices must be purchased at a discount so it should not be compared to an interest rate from a line of credit.

2nd- Turnaround time for authorization for funding from your traditional bank is often longer than 2 months with alot of unnecessary pain and paperwork. Your banker has to get approvals and the underwriting team has many hurdles for you to jump over in order to get funded. With factoring you can get an account and get funded in as fast as a week and then on future invoices you can receive funding in 24 hours. Plus if you acquire additional customers the factoring company will fund you for them in 24 hours.

third- A traditional bank generally needs to see a minimum of 2 years of financial for your business as well as requires you to have collateral together with your invoices EVEN a personal guarantee. On the other hand, A factoring company can provide funding to start-up companies so long as their customers are creditworthy and all that is required is the accounts receivable and many factoring companies don’t demand a personal guarantee.

fourth- A factoring company in addition offers even more services. As opposed to a traditional bank, a factoring company constantly monitors your accounts receivable and collections. They offer credit screening for potential new clients for your company and they provide up to date aging reports to help you in getting a better handle on your receivables aging. A factoring company is also constantly advancing new funds as well as collecting outstanding invoices and your credit facility continues to grow with your new accounts.

To sum it up the big issue is not if factoring is more costly than a bank loan, because it is obvious that the two cannot be compared. As a business owner you should consider advantages of factoring vs. a bank loan.

With factoring you never be worried about out-growing your credit line or quickly spend your loan and get into debt with the bank. With factoring you can get additional capital easily when needed so your credit line grows as your business grows.

Plus if you are unable to meet orders due to insufficient working capital, then factoring offers you the cash-flow needed to complete the order. If you find your business in this situation give us a call 1-888-382-3766 or visit us online by clicking here.

Factoring Websites Claim Unreal 1% rates?

A quick online search shows that you will find a number of factoring companies that offer what appears to be very cheap factoring rates. Based upon what you search online, you will find claims saying you can factor your invoices for only 1%. Sometimes, the rates are even lower. How can this be? And in some advertised websites, the rates appear to be cheaper than traditional bank financing.

Just how can factoring be cheaper compared to a conventional business loan that’s only reserved for prime customers with plenty of assets?

Let us explain this for you:

The key is to recognize how nearly all factoring rates work. Even though the rates might seem to be cheaper than bank financing, often they will not be.

Why?

Well first we need to evaluate how factoring fees are commonly evaluated. Factoring company’s commonly charge you a fee that will increase the longer that a invoice remains un-paid. This is sensible, the more time an invoice goes unpaid = the greater the cost.

Below are 2 popular techniques for determining factoring fees:

1. Ten Day Fee: This is certainly the most popular factoring fee structure. In this case, the factoring company prices a fee for a 10-day period. For instance, 1.00% for every 10 days the invoice remains unpaid, this fee adds up until the customers pay the invoice in full. The fee for the first 10 days is 1.00%. The fee for the second ten days is 2.00% and etc.

2. Daily fee: This is the most basic factoring fee model you are charged a daily fee for each day that the invoice is unpaid by the customer. An example of this would be a 0.30% fee per day. This equals about 1.00% for ten days and about 3.00% for every 30 days the invoice remains unpaid.

These illustrations have got one thing in common = the cost of factoring a invoice for ten days is 1.00%. Using this information, you could say factoring is provided at rates “as low as 1%” Definitely, just make sure your invoice are paid very quickly and in ten days or less.

in the event that you are evaluating factoring proposals, you should contemplate looking at the fee structure carefully to recognize what the total cost of factoring is going to be for you. The best way to find out – check with your factoring company for the cost of factoring invoices for thirty or sixty days. That will provide you with a good measure of the actual factoring fee cost.

If your business is experiencing cash flow issues and is in need of funding, give us a call 1-888-382-3766 or visit us online by clicking here

Business Factoring for Small Business

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Click Here One of our certified specialists will assist you. We offer credit lines starting at $5K up to $50 Million.

Neebo Capital.com Explains Factoring Invoices

Welcome to NeeBo Capital, this article was written to give you a better understanding of how factoring invoices works.

As you know business owners need cash. However how do you get money for your small company when banks are unwilling to offer your company any type of funding?Our team would like to introduce you to accounts receivable factoring,a proven approach of obtaining investment capital swiftly. That way, you will make the payments required to keep your business afloat while reducing your risk amounts.Factoring invoices involves selling yourcompany accounts receivable to a company such as NeeBo Capital in order to obtain instant cash flow. The factoring company pays you an advance, which is a percentage of the total invoice (typically 80-95%). Your clients re-pay the factor, and you receive the remaining, minus a small factoring fee. This is a time tested method to keep your company cash flow growing.If many of your invoices are not paid on time, use NeeBo Capital as your factor. Your business depends on money to run, and factoring is a way to avoid waiting Thirty to 60 days for invoices to be paid. Factoring companys such as NeeBo Capital look at your customer’s credit history and offer you an advance and a fee.

Something to remember is the fact you do not have to factor all your invoices. You should not look to factor clients who usually pay rapidly and dependably. The loss of money from the factoring fee would be greater than the immediate benefits. By studying your invoices and choosing carefully which ones to factor you will increase your profits. You do not have to take the very first rate that a factor company offers.

In the event you do not feel like you are receiving a bargain, check if the factoring company can offer a reduce rate over time or even determine if you could get a greater advance at the start while the factor works with your customers. Most factor companies give lower fees to companies that use their services often. This benefits the factor in addition to your business by generating a partnership.So do not hesitate, start factoring your invoices with neebo capital.com today!

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.

Purchase Order Finance and Accounts Receivable Financing

Have you ever considered Purchase Order Financing or Accounts Receivable Financing , also known as factoring invoices?

In contrast to Purchase Order Financing, Accounts Receivable Financing focuses on advancing a large portion of the invoice immediately after the product is delivered to the customer. Instead of waiting Net 30 to up to net 90 days to get paid, an accounts receivable financing company is able to reduce the wait to virtually net zero by advancing 70-90 percent of the invoice amount. After the full payment has been received from the customer the accounts receivable financing company will transfer the remaining portion of the invoice, minus their cost (typically one to three percent).

Get you Cash Fast! As compared to the drawn out process of traditional financing, both Purchase Order Financing and Accounts Receivable Financing can be obtained in a matter of days, albeit Accounts Receivable financing can be faster than purchase order financing.

Credit Worthiness. Both methods focus on the credit worthiness of your client, not your balance sheet. Traditional lending look to your past history of managing your company’s finances and credit when deciding if a line of credit will be approved. Purchase Order Financing and Accounts Receivable Financing, on the other hand, will look to the future of your company and the creditworthiness of your clients.

These two funding strategies are great for newer companies. Companies without a track record of at least 2-4 years, you may not have much of a shot at getting approved for business credit through a traditional lender. Since purchase order financing and accounts receivable financing companies put more weight on your clients creditworthiness, than on yours, young businesses are able to get the financing they need! Visit NeeBo Capital Today!

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.