Five Myths About SMB Invoice Financing, Debunked!

5 myths about invoice financing debunked:

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Myth: 1 – Expensive – “A rate of 1.2% per month equates to 18% annually. That’s a very high interest rate compared to what my bank will give me.”
Debunked – True, rates are around 1.2% per month. However, receivables financing can offer no origination fees, no prepayment fees or un-used line fees often seen with a traditional line of credit. There is also no commitment; you can finance as needed. While rates on a traditional loan may be lower, the terms and conditions of the loan may cost you more in the long run, including the waiting and time to get funds.
Invoice Financing is based on the creditworthiness of your customers, instead of your business’s credit. This means if you’re working with larger clients that are more established, factoring will enable you to extend terms to remain competitive amount your competitors.

Myth: 2 – Appearance – “A company that sells invoices is in trouble with traditional sources of credit, and needs alternatives lending to keep the doors open. This may show my customers that we have very slim margins and are not making a ton of profit off of the business relationship.”
Debunked – Invoice Financing grows with your business. Traditional lenders like banks tend to look at the past and have stringent requirements and paperwork to qualify for a commercial loan. Financing your receivables actually keeps up with growing sales volume by extending you larger amounts of upfront capital as your accounts receivables increase. Invoice factoring is fast and makes your company more flexible to meet the demands of larger customers.

Myth: 3  Customers Relations – “I have been doing business with customer-ABC for the past 4 years and don’t want to jeopardize our relationship by adding a 3rd party payment collector. A financing company will pester my customers for payment, which will damage the client relationship.”
Debunked – As business professionals your clients understand that when you’re factoring it’s because you’re extending terms so they can pay you at a later date. They’re essentially using your money to grow their business faster, so you may as well use the factor finance company’s money to grow your business faster.  Some factors will also stay out of the transaction all together, this type of option is very popular among transportation freight brokers.

Myth: 4 – Too Early for Credit – “Our new SMB business has little to no credit history, and as a result we can’t get financing from our local bank. We heard that Invoice Financing companies have the same credit requirements!”
Debunked – Invoice Financing companies base their decision using your customers payment and credit history, not yours. Your customer (the debtor) is the one responsible for pays the invoice, so factor finance companies are mostly interested in their creditworthiness overall.  Larger, Fortune 1000 companies and government entities are the best customers for a small business to factor finance their receivables from because there is plenty of information publicly available to check their payment and credit history, allowing a vendor to piggyback on their credit rating, while increasing their own business credit history more quickly.

Myth: 5 – Loss of Control – “All payments coming to my business are routed through a 3rd party. I lose control of my accounts with a factor finance company. Plus I get stuck in contracts that restrict business rather than helping.”
Debunked – True, payments need to be made by your customers directly to the financier’s account. This is done for security purposes; the invoice is collateral for the advanced funding, and your factor finance company collects from the customer when they pay. At the same time, not all Invoice Financing companies are created equal.
When factoring, only customers that you want to finance must make accounts payable to your factor finance company. Receivables from customers that you choose not to finance can still pay you directly in the agreed upon time frame, usually net-30 or longer. All factor finance companies are a little different. With some there is not long term contracts and you can sell the receivables you want, when you want, which works great for seasonal business and oversize orders. Having to deal with a delayed payment cycle can strain existing resources and add unnecessary stress to your business. Debunking the myths of invoice financing can bring working capital to your business quickly and open new opportunities for many B2B and B2G small businesses.

Ready To Start: – Make sure that you’re getting a few offers from competing factor finance companies before you begin. Visit www.factorbid.com and within an hour you’ll have competitive offers to earn your business an buy your accounts receivable invoices for immediate cash. Factor bid is fast and easy and only takes about 2 minutes to start. You’ll be contacted by a few of the top factor finance companies that specialize in your specific industry within the hour of completing your customer application. You’re under no obligation to factor. Check out factor bid and get the knowledge and leverage you need to get the best deal when factoring your accounts receivables for immediate cash flow!

On The Go – Download Factor App – for fast and easy invoice financing!

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Quick and Easy Small Business Funding Offers – Get The Best Deal Today

Fast Small Business Loans:

Looking for working capital for your business today? Qualify for our fast small business loans quickly. Click here for business funding and you’ll get competitive offers from financing institutions to finance your growing business.

Traditional bank loans require specific collateral before they will lend to your small business. Get alternative small business loan ranging from $5,000-$250,000 with a general lien on business assets which is removed once you’ve satisfied/repaid the loan. Unlike a bank, the ‘value’ of your assets are not considered in the funding decision.

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Typically small business loans are from 3 to 24 months and the personal guarantee is only required for this time. Small business owners get the small business loans needed without securing hard assets. Use your loan for short term expense, to cover cash flow gaps and pay your loan back quickly to manage expenses.

Funding Amount: $2,000-$250,000+

Funding Term: 3-24 month*

Repayment: Automatic daily debits from your merchant account / small business account

Collateral: No business collateral required, pledge of only business assets for qualification

Eligible Business Type: From accountants, doctors, construction, Oil/Gas Industry, retail, manufacturing and over 200 others

Funds: Money in your account as soon as tomorrow. Fast and easy approval

Funds Usage: Can be used for most business purposes

See how much your business qualifies for today! Get Started

Financing across different industries; Your business qualifies for immediate cash, see why!

At Factor Bid – we match business owners with finance companies that specialize in their industry. Not all finance companies are the same, and finding even one that specialize in your industry can be extremely frustrating and time consuming.

By getting competitive offers from the top finance companies that match your industry, your business has the opportunity to receive the best deal and get the most money upfront when seeking working business capital.

Factorbid’s financial database of lenders offers funding options suitable for a wide array of companies across many industries. Regardless of the industry your in, firms all have one thing in common, they require working capital to survive and almost always need access to funds immediately.

FLEXIBLE – FAST – CONFIDENTIAL AVAILABLE FINANCING PROGRAMS:

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Accounts Receivable Financing

Business Line of Credit

Doctor Loans

Working Capital Gross Sales Loans

Equipment Leasing and Financing

Franchise Financing

Merchant Cash Advance

Purchasing Order Financing

Small Business Loans

Traditional lending institutions, such as banks, are not the best source for businesses seeking loans under $1,000,000.00 dollars. Banks need to make a greater profit margin on the monies they lend, and the larger the loan the greater the profits. Banks also have tighter guidelines and longer approval times than alternative lenders.

Over half of small businesses that apply for loans are turned down by traditional lending channels like banks, either for lack of business history, high net revenue returns and/or creditworthiness. Once business owners discover there is a faster and easier way (called factoring) to acquire access to business cash flow, they jump at the opportunity to grow their business.

Business Financing Programs Increase Cash Flow To Cover Payroll, Grow Your Business Faster and Afford Day-To-Day Expenditures.

Accounts Receivable Financing – is the use of receivables as collateral to generate immediate capital. Also called Invoice Factoring, purchases a businesses accounts receivable invoices for cash and usually includes some type of credit management service and bookkeeping service too.

Small Business Loans – Get access to a variety of loan options including unsecured small business loans, not traditionally offered by banks. Loan approval is not based on profit/loss, past credit history or open tax liens.

Business Line of Credit – Unlike traditional lenders, our finance companies offer limited paperwork, and the loan criteria is much different that that of a bank. Loan approval is not based on personal credit histories and the approval process is fast and businesses only pay for what they use.

Equipment Leasing and Financing – Flexible repayment terms, typically 1- 5 years to repay and no vendor choice restrictions.

Purchase Order Financing – PO financing will enable your company to obtain cash that is advanced against impending purchase orders. This lending model helps business owners that need fast access to working capital to fulfill purchase orders.

Franchise Financing – If you need assistance in a business financing program for franchisees looking to expand or upgrade their existing franchises, then contact us for assistance in getting a few competitive offers.

Doctor Loans – Access specialized funding for medical practitioners like dentists, pharmaceutical professionals, veterinarians, chiropractors, optometrists, home health care professionals, primary care physicians, specialists and more.  Looking to purchase new equipment/technologies, expand or simply increase cash on hand to circumvent slow-pay insurance payouts, then contact us today to get the best deal from competing finance companies.

 

Medical Transcription Services Invoice Finance offers

Medical Transcription Services Invoice Finance

Medical transcription factoring is a business funding method that exchanges the unpaid invoices sitting on your books for a cash advance of equal value.
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When providing medical transcription services to healthcare facilities, long payment terms may prevent your company from seeing healthy growth results, mainly from lack of accessible cash that’s needed to purchase updated equipment, fulfill objectives and most importantly acquire new clients.
The Factoring Process is simple:
  1. Continue servicing your clients
  2. Send your invoices to the factor
  3. Receive cash in 24 hours

Medical Transcription Factoring – enables your company to keep up with the latest transcription technology, hire additional employees, improve financial health, expand market reach and grow at a successful pace.

Keep in mind that medical transcription factoring is not a loan, which means you’ll avoid accruing any new debt. Regardless if your medical transcription services company is big or small, factor bid gets you a few offers from competing factor finance companies specializing in medical transcription services invoice financing, so you get the best deal when factoring.

The top factors with medical industry expertise and knowledge of accounts payable and receivables are at your service. Factors compete for the right to earn your business. When medical transcription services companies use factor bid to get a few offer for their invoices, factors realize they’re competing for your business and are eager to find the best way to earn it.

Get the knowledge and leverage you need to negotiate the best deal when factoring your medical transcription services invoices for immediate business capital. Increase your cash flow quickly and take advantage of the benefits of factor financing.

Check out Factor App – for invoice financing on the go!

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It’s Friday, “direct deposit day” (payday)

If you’re a business owner, you’re familiar with the excitement that comes with Fridays around the office. Employees are getting ready for the weekend and are exited for their paycheck! Some employees even get their check as “direct deposit” early Friday morning before work even begins.

What’s this mean for business owners – Payroll expenditures! See for business owners payday isn’t always as consistent and predictable as Friday employee pay is. Business owners have to wait for payment from customers and often times end up covering payroll and other daily business expenses right out of their own pockets.

Wouldn’t it be nice if your business could get paid on outstanding receivables before the work day even begins? 

What if you could have the same great feeling every Friday that your employees feel. Well you can! If your company is feeling the cash flow ‘squeeze’ from slow-paying customers and you want to get back on that good vibe kind of feeling when it comes to getting paid, then take a look at factor financing your receivables.

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Cash Flow “Squeeze”

What is Factor Financing and how do I get paid in 24 hours?

Companies sell their invoices or accounts receivables to specialized companies called factors. The factor advances most of the invoice amount upfront by simple direct deposit. You can get paid within 24 hours of invoicing your customers. Factoring will continue to provide your business with predictable cash flow everyday of the week, even Fridays so you’re able to cover payroll and other expenses without digging into your own pocket.

Be excited for Fridays, meeting payroll with confidence shows your business is a success. They always say “people sell people”, so if your employees are instrumental in helping drive new customers and maintain existing accounts then paying them is a good sign that your business is growing and on it’s way to becoming a great success.

Is your business Mobile? Check out Factor App – for invoice financing on the Go!

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Invoice financing, also know as factoring, helps companies get cash in exchange for their outstanding accounts receivable invoices.

Could your business benefit from an injection of new cash flow? Invoice financing, also know as factoring, helps companies get cash in exchange for their outstanding accounts receivable invoices.

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How does invoice factoring work?

There is no big secret to factor financing (selling your invoices for immediate cash). To access invoice financing a business simply needs to providing goods and/or services to other creditworthy businesses on terms (invoicing)

What does the typical Factor Financing cycle look like for your business?

  • Once you’ve completed your service or delivery of goods you’ll invoice customers as usual.
  • Depending on how much capital your business needs to access, will determine which customer invoices you decide to factor.
  • You’ll submit your open invoices to the factor along with any additional supporting docs you’ve agreed to provide for specific customers.
  • Within 24 hours of verification, the factor finance company will wire or ACH up to 85-95 percent of the gross invoice to your account.
  • In the normal course of business, check from your customers will continue to be payable to your company, however may be mailed to a specific mailing address that your factor finance company has set up. There are also other ways a factor will accept payments on your behalf – this is an important detail you need to discuss with your new factor finance partner.
  • Once the factor receives payment from your customer (in full) they will post it to your account. They then remove the amount that was initially advanced to you (to cover what they fronted you) plus their agreed upon fee.
  • You’ll receive daily comprehensive accounting information so you can review the factors advances and customer payments.
  • You’ll also have access to a suite of tools that can help you check the creditworthiness of potential new customers you’re considering working with.

Factoring your outstanding invoices is a symbiotic relationship for your company and the factor finance company. Factoring is not like a bank loan, where you need to put up personal equity or credit. The factors are using your receivables as collateral and the more your business grows the better you and your factor finance company does.

Also don’t forget that factoring your invoices and getting paid within 24 hours for your open invoices reduces your liability in collecting outstanding, late or non-payments from your customers. Make sure you talk to your factor finance company about non-recourse factoring vs recourse factoring before deciding which type of agreement is best for your business needs.

Now that you’re ready to start factoring – visit www.factor.bid to get a few offers from competing factor finance companies for your open invoices. When factors compete you get the best deal. Factor bid is free, enjoy!

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Get immediate quotes from experts in (invoice factoring) asset based accounts receivable financing.

So you’re in business and you have expenses, welcome to life, thanks for checking in. Did you know you can free-up money that’s been tied up in your accounts receivables? Yep, your receivables are considered an asset and factor finance companies are willing to buy them at a discount of their face value.

If you didn’t start your business to become the financial arm (Net 30-45 terms) of your customers, while their business’ thrive and grow quickly on your dime, then it’s time you discovered factoring your accounts receivable invoices for immediate cash.

[ To watch a quick YouTube video on how to get a few offers from competing factor finance companies to buy your open accounts receivable invoices Click Here ]

Low Risk Business Idea that is Applicable, even Thriving in 2016

Congratulations, you’re an entrepreneur. Now what!? You are passionate about your ideas and have created an amazing product and/or service to be proud of.  But the initial inspiration of going into business for yourself is quickly slowing, even being derailed by the challenges small businesses face managing their predictable finances.  Indeed, to be competitive and stand apart from the competition, having cash on hand to spend will allow you to keep your dream of owning your own business alive, but for how long? Positive cash flow during the critical initial phases of growth and exposure can be the difference between living your dream and/or dealing with a real-life nightmare!

*Fast, Simple  and Confidential – Business Financing (Factor Bid)

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Factor bid matches business owners with factor financiers looking to buy their open accounts receivable invoices. Take the hassle out of funding your business!

If you’ve ever thought about visiting your local bank to get a business loan.., borrower beware and continue reading…;

Simply put-

Many new business entrepreneurs are unable to secure a loan at their local bank due mainly to qualification criteria. Business loans are typically only available to established businesses with at least two years of banking history and substantial assets that are used as collateral against a new business loan.  Unfortunately most of us have to learn the hard way and after wasted efforts and time invested, many business owners will be denied the much needed funds to grow a healthy new business.

So the question now becomes: What can I do to acquire working capital (cash readily available for my business, today) without the hassle and lengthly amount of time invested that goes into taking out a traditional loan or even some other high risk option?

The answer to this question is Accounts Receivable Factoring.  To understand if your business is eligible for factoring, ask yourself this;

1.) For The Business Owner: What do we give away to our customer?

Whether it be specialty cupcakes or a consulting service- all businesses will sell either a product, service, or a combination of both to generate sales.   In layman’s terms “it takes money to make money!” 

2.) For The Business Owner: What did we get in return for our products/services from the customer?

Most of us are familiar with cash.  We like cash, because we can spend it how ever we need to in order to keep moving ahead in business. But there are other forms of payments a business may use to acquire payment in exchange for the sale of a product or service they provide.  One of these methods is called “invoicing” which offers you customers terms and enables them to pay for goods and/or services at a later date in time (typically called a Net30 or Net45, etc.  When invoicing occurs, the business owner creates an asset called an (accounts receivable) for the customer as a promissory note to pay at a later date. This form of payment is known as accounts receivables invoices and is categorized as an asset on the business balance sheet.

So now that we know we can unlock capital that’s being held hostage in our accounts receivable invoices, what’s the fastest and easiest way to find a factor finance company to buy my accounts receivable invoices for the best possible deal.

Glad you asked -Smart business owners trust Factor bid to get a few competitive offers from factor finance companies to buy their open accounts receivable invoices, for immediate cash! Factor bid is simple, easy to use and gets you the knowledge you need to negotiate the best deal when deciding which factor finance company is best for your company.

Factoring has so many benefits besides just lowering your risk in collecting on open and outstanding invoices.  For example; you’ll get years of experience when you partner with a factor finance company, to help streamline your accounts receivables process and even professional advice on how to grow your business more efficiently, while accessing tools that keep your business out of trouble and away from other high risk business partnerships. See a factoring company has your best interest in mind. Why you may ask. Well simple put, the more new customers you acquire, the more new invoices you sent and ultimately the more money you generate the better, both you and your factor finance partner do.

If a factor finance company can help you increase your bottom line, and the increase is greater than their small fee for accessing immediate cash flow for your business, then the relationship makes sense. For example, if you’re netting 10% a year in your business, and a factor ends up costing you 2-3% of your total sales annually, but the next year your business starts seeing a 14%-16% percent net, then you’re making more money than before you started factoring your invoices. Plus your business is becoming more efficient, and you’re getting more work done in less time thanks to some smart bookkeeping ideology your factor finance partner is helping to implement within your business practices.

The take-away from this helpful article is your accounts receivable invoices are considered an asset and should be recorded as an asset on your financial statements.  Why does this matter?  It matters because your accounts receivable invoices can be used as a tool to generate cash from third parties (factors) who are interested in purchasing the  open invoices.  

To get started learning more about invoice factoring (invoice finance) visit www.factor.bid and watch our 30 second video. If you’re not dead sure exactly how factor bid can help you get the best deal when financing your open invoices, then call us direct at (650) 924-3520 and one of our associates can help get you set up to receive competitive offers for your outstanding invoices. It takes about 2-3 minutes to submit an invoice and get the ball rolling on getting immediate cash for your receivables.

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Factoring rates explained – Why 3% for 30 days doesn’t equate to 36% APR Interest

Factoring Rates Explained

Why 3% for 30 days doesn’t equate to 36% APR Interest. The belief that Accounts Receivable Factoring is too expensive, typically is based on the lack of understanding of what the actual factoring rates represent.

Factor Finance Companies (Factors) do not loan money at a rate of interest. They supply your growing business with working capital (and when you do well they do well). They do this by purchasing your invoice ‘receivable assets’ at a discount of the face value amount of the invoice. For this, factoring ‘rates’ represent a percentage discount in the sales transaction, not the traditional ‘bank style’ interest rate on a loan.

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Let’s take a look at an example;

If you have a $10,000 dollar invoice that is due to be paid by your customer 30 days from now, a factor may offer to buy the invoice for $9,700 dollars in cash, which is called the advance (and can be wired or ACH into your bank account within 24-48 hours) with the remaining balance being paid to you (less the factors fee) when the invoice is actually paid in full by your customer (called the debtor). Based on the scenario above, you would have agreed to discount your invoice by $300 dollars, or 3% of the face value.

The advance rate depends on what you have negotiated with the factor and some other key variables like the credit worthiness of your client,their payment history and the amount of the invoice. Usually the factor finance company will advance 80-90 percent of the face value of the invoice.

If a factor company tells you they will buy your invoice at a rate of 3%, that rate is not the interest rate on the loan, instead it’s the percentage discount the factor requires to get your business immediate cash today, for invoices they won’t collect on for 30 days.

Invoice financing is a strategic way to grow your business faster and will help cover payroll from additional employees, supplies, day-to-day expenses, investments and strategic overall business growth.

On average factoring discount rates range from .6% 1.4% for every 10 days an invoice remains outstanding from its original agreed upon due/payment date.

Factoring discount rates are transactional rates, where the amount of the discount is the factor finance company’s fee for the sales transaction – not that much different than the fees Credit Card companies charge merchants to advance them cash on their credit card sales.

A common misunderstanding about the costs associated with factoring arrises when financial professionals and business owners try to company interest rates to transactional rates. These two rates, as we’ve described are very different.

Example;

If you business sells $100,000 thousand dollars worth of invoices to a factor, and the factoring fee is $3000 dollars on invoices that are paid in 30 days; the tendency is to take the 3% fee – multiply it by 12 months and assume the factor is earning a whopping 36% return! That conclusion, however is false. The factor doesn’t collect $3,000 or 3% every month. The factor collects a 3% fee once, as the result of a single sales transaction. Same scenario if you were to discount your own service / product to your customer at a 3% discount.

Another way of looking at it – if you give your best customers a 3% price discount every month over the next year, does that mean you’ll have discounted your product or service by 36% by the end of the year? Of course not! If your profit margin on your product or services is 10% every month, your annual profit margin is still 10% annually.., not 120%!

Ask yourself – how much more money could your company make if you could recover your working capital immediately. On $100,000 dollars in “outstanding invoices” if your company could get $80,000 – $85,000 dollars within 24-48 hours, how much faster could your company grow.

In the examples above if your company’s net profit margin is greater than 3%. Any additional business you generate by accelerating your receivables provides your business with additional profits. You know the saying, we all know the saying – “it takes money to make money!” So if your business is generating invoices, that means you’re running a good business, it’s time to “Cash In” on your hard work so you have predictable cash flow every month to pay for additional employees to help you run grow your business, additional day-to-day expenses, supplies, investments, equipment and more.

Now that we know factoring can help your business grow at a much faster pace and become more profitable in less time, what’s the right factor finance company for your business type? Good question. Smart business owners use www.factor.bid to find the best factor in their industry and get the best rate when factoring.

Factor bid matches your business with the top factor finance companies that compete to buy your invoices for immediate cash. Before you decide which factor finance company to partner with, make sure and get the leverage you need to negotiate the best offer.  Factor bid gets you a few competitive offers to buy your accounts receivable invoices, so you get the best deal and most money when factoring your outstanding receivables.