| Are your clients paying you in 30, 60 or 90 days? | | | | meet ongoing obligations such as payroll and rent, and |
| COuld your business grow if you were paid sonner. | | | | allows them to grow the business. In effect it |
| Learn how receivables factoring can help you finance | | | | eliminates the uncertainty of when you’ll be |
| your business. Obtaining business financing has always | | | | paid and allows you to streamline your cash flow. |
| been challenging for small and mid size company | | | | Receivables factoring is very different than a |
| owners. Traditional sources of financing, such as | | | | business loan or line of credit. Rather than focusing on |
| venture capital companies, angel investors or banks, | | | | physical collateral (real estate, equipment, etc.) like |
| provide financing that is hard to obtain and usually | | | | banks do, factoring companies focus on your |
| takes weeks — or months — to set up. | | | | invoices. Are they from good credit worthy clients? |
| Angel investors and venture capitalists, although more | | | | Do they pay reliably on 30, 60 or 90 days? If they |
| generous than banks, only provide capital if you are | | | | do, you have a good change of qualifying for invoice |
| willing to give them an ownership stake in your | | | | factoring. |
| company. Usually a big one too. Banks don’t | | | | Accounts receivable factoring is very easy to |
| demand an ownership stake. Instead, they will only | | | | implement and works as follows: |
| lend you money if your company can show a | | | | 1. Your company delivers the goods or services to |
| three-year track record of profitability and if your | | | | the client |
| personal credit record is spotless. | | | | 2. You invoice your client and send a copy of the |
| But, what if you don’t want to give up | | | | invoice to the factoring company |
| ownership and if you don’t meet banking | | | | 3. The factoring company advances you between |
| requirements?There is an option that is growing in | | | | 70% and 90% of the invoice as the first installment |
| popularity — and it provides you with easy to | | | | 4. Once the invoice is actually paid, the factoring |
| obtain financing. It’s called accounts receivable | | | | company advances you the remaining 10% to 30% |
| factoring. Factoring is an ideal tool for companies | | | | as a second installment, less a small fee |
| whose biggest challenge is that they cannot afford | | | | Factoring financing is a great alternative to bank |
| to wait 30 to 60 days to get paid by customers. By | | | | financing and venture capital that is easily available to |
| factoring your receivables, you can get paid in as little | | | | small and medium sized businesses. |
| as two days. This helps business owners to easily | | | | |