How Factoring Receivables Can Help your Company Grow
If you sell goods/services to other businesses or to the government, then you know that commonly you have to wait 30 to 60 days to get paid for your services. Unless your business is well capitalized, waiting to get paid can drain your working capital and affect your business.
Lack of working capital can prevent you from making new sales, forcing you to sentd customers to your competition. What is worse, if the problem is not corrected, it can affect you ability to pay employees or suppliers. Missing payroll and supplier payments is a sure indication that a business is in serious financial troubles. The solution to this problem is, of course, simple. You just need to get business financing.
Obtaining business financing (such as a line of credit or business loan) is easier said than done. If you go to a bank, they will require that you provide them with three years audited financials and a solid business plan. That kills any chances of financing for most startups and new businesses. There is, however, an alternative form of financing that can help you get working capital. And, it almost always works better than a business loan. It is called factoring financing.
Invoice factoring provides your business with a substantial advance on your slow paying invoices - sometimes up to 85% of what you have invoiced. You can use the advance as working capital to cover new sales orders, payroll or supplier payments. Factoring receivables provides you with relief form slow payments and provides you with the working capital you need to grow.
Factoring receivables is simple to use and works as follows:
1. You provide the product/service to your client and send an invoice to them
2. You send a copy of the invoice to the factoring company
3. The factoring company advances you up to 85%. This is your first installment
4. Once your client pays, the remaining 15% (second installment) is advanced, less a small service fee
The fee you pay will be based on the sales volume that you finance and the credit quality of your clients. Fees can generally range from 1.5% to 3.5% per month.
On of the big advantages of factoring receivables is that it is easy to obtain and can be set up in a few days. Most new and established businesses can qualify easily. The biggest requirement to qualify is that you must do business with reputable clients or government entities.
Related Tags: accounts receivable factoring, factoring receivables
About Commercial Capital LLC
Interested in Factoring Receivables? We can provide you a competitive accounts receivable factoring and receivables factoring quote. For information, call Marco Terry at (866) 730 1922.
Recent articles in this category:
- Work At Home Mums: Making Time For You.
I questioned if this subject would be worthy of a complete article, however it's an vital factor in - Property Investing 7 Reasons Why Now Is A Good Time To Invest
Conventional wisdom has this to say about property investing; the best time to invest in property is - Chocolate Gifts: The Perfect Corporate Gifts For Your Colleagues
It's always a good feeling to give messages of thanks to your colleagues who helped you finish that - Singapore Company For Foreign Entrepreneurs And Business Entities
There are three unique types of Singapore company that have been specifically created for foreign en - Important Objectives Of Packaging
The function of packaging is not simply only physical protection but also marketing, barrier protect - Establish Your New Global Web-based Enterprise Right Now
This is the perfect point in time to set up your global web business.The Internet business field is - The Ups And Downs Of Entrepreneurship
There are two kinds of entrepreneurs. First, there is the entrepreneur that is commonly associated w - Problem Of Funds To Start A Small Business
If you are determined to do some business on your own rather than doing office work in other people' - Do Business Tactfully Incorporating Third Party Logistics!
If you are an experienced entrepreneur, then you can certainly value two major factors; quality work - Home Stagers Can Work As Much Or As Little As They Wish
Many Staging Diva Graduates start out as part-time home stagers because they simply can't afford to
Most viewed articles in this category:
- Starting A Day Care Center Can Be Profitable When Following These Five Ingredients Of Success
The demand for child day care in the US is rising. This is due to many factors including but not lim - Being an Entrepreneur
I have never been the conventional type. I always did something different from everybody else. I jo - It Takes a Decision To Succeed
I am truly amazed at how often I hear people talk about what they want and yet when I ask them if th - A Business Plan-Do You Need One?
There are several uses for a business plan, and each requires the plan to be written somewhat differ - Art Therapy: Array your Art Workshop at Work
There is so much going on in the world today. President Bush is moving things around in Washington. - Proven Income Opportunity Success Stories
There are alot of scams out there claiming that they have a proven income opportunity. I totally agr - Sometimes You Have to Abandon the Experts, Theories and Books and Trust Your Intuition
As the coordinator for the online think tank often we get into debates with experts and Ph.D.'s abou - Mums - Park And Ride Your Way To A Second Income
Have you ever noticed that when you are in a hurry to catch a bus there never seems to be one? Or pe - How to Protect Yourself if Your House Value Drops, or Your Income is Lost - Part 2
Robert Shiller, is the author of the runaway bestseller, Irrational Exuberance. Shiller has recently - Home Business Solutions for Earning a Residual Income
Starting a home business is a huge step. Maybe you want to earn an extra income, extra spending mone