What Factor Financing IS and IS NOT (accounts receivable invoice financing)
Factor Financing is a financial transaction where businesses sell open accounts receivable invoices to Factor Financiers at a discount. Your open accounts receivable invoice is the asset which factor financing companies want to leverage to support your immediate cash needs. This type of financing provides an easy and flexible way for business to get immediate cash to grow their companies, pay employees, purchase new materials, and cover operational costs.
There are three important players in this type of transaction. Player 1: The factor financier who purchases the open accounts receivable invoice. Player 2: The business who sells the open accounts receivable invoice. Player 3: The debtor who has the financial liability to fulfill and pay the invoice in full.
Does Your Business Qualify as a Good Factor Finance Candidate?
Businesses often have multiple outstanding accounts receivable invoices each month. Each invoice represents work that has been completed but payment has not yet been received. Two scenarios present themselves that can hinder the operations and growth of any company:
- Scenario 1: Your business receives a down payment for work to commence. This deposit usually covers some of the material cost and man hours involved, but not all of it. Your company must take on the financial liability for the remaining material, labor hours, and operational costs incurred by your company during the duration of the project. The job is completed and the client is provided with a bill for the outstanding balance. This creates an open (or outstanding) accounts receivable invoice sitting on your desk waiting for the check to come in the mail. The accounts receivable invoice remains in an open or outstanding status until the money is received.
- Scenario 2: Your company has a product or service that is provided same day. However, the customer has a certain amount of time to pay for the product or service AFTER they have received it. Some customers have a great track record for paying right away. Other clients, however, take 30, 60, or up to 90 days to pay. Worse case scenario, they do not pay at all. Your company now has to decide on the appropriate course of action for late or no payment clients. This can be a daunting task and is not to be taken lightly. You do not want to lose a steady client who pays — but always late. However, you need to set the precedence, outlining that late payments are not favorable and any such type of activity should be met with late payment stipulations, like additional financial compensation for your business. For clients who have not paid, it is easy to decide not to contract with them in the future. At the end of the business day, there is still the issue of that open accounts receivable invoice sitting on your desk that needs paid! Small claims court is costly and the time it takes for you to file a claim, pay the fee, provide the proof of service/terms, and take a day off of work to go to a courthouse–just might not be worth it. Even if you do win a judgement in small claims court, your not out of the woods yet, you still need to find a way to collect on the judgement, which usually cost you more money to hire a representative to try and set up some type of garnishment and ongoing fee collection from your winning judgement.
If you can identify with either of these scenarios, whether on an ongoing basis or every so often, Factor Financing is a great solution, and can help protect your business from encountering these type of financial burdens, plus help in collecting money owed to your business is paid in a timely and consistent manner.
SHOW ME THE MONEY!!!!
You have to love the simplicity and directness of Jerry Maguire, “SHOW ME THE MONEY!” As a business, you were created to provide an exceptional product or service that fills the needs and/or wants of your customers. We know you would love to do it for free if you could, for the betterment of humanity, but the simple fact of the matter is: you have kids to feed, bills to pay, and a roof you need over your head. This is the same for your business.
You have employees that are counting on you for their paychecks. They have bills to pay. Your staff wants you to be successful, healthy, and grow so they can reap the benefits of a steady job and income. The last thing you want to happen is to run dry of funds to pay the electric bill; incur layoffs, and stagnate in the market.
When you have funds locked up in outstanding open accounts receivable invoices, that is untouchable money that you have already earned. You provided the product/service and have not reaped the benefit from it yet. If you were able to have all that CASH in hand, SAME DAY, what would that look like for your company? WE KNOW YOU COULD COVER:
- Day-to-day business expenses
- Hire new employees
- Buy supplies and equipment
- Reduce liability
- Secure new customer contracts and more!
So now when we say “Show me the money” you know with the help of a factor finance company, this is entirely possible. Your invoices can get you paid today! It’s recommended that when choosing the top factor that is right for your company, you visit Factor.bid and submit an invoice to get the ball rolling. At Factor bid factor finance companies compete to buy your open accounts receivable invoices, so you get the best offers when factoring your receivables for immediate cash.
GO TO FACTOR BID TO GET A FEW ACCOUNTS RECEIVABLE INVOICE OFFERS
Go to http://factor.bid to upload an open accounts receivable invoice. Within the hour, you will receive a few phone calls from factor finance companies with a few account receivable invoice offers. Factor finance companies will compete for the opportunity to earn your business. And you better believe that when they know you’re using Factor.bid to sell your invoices, and they’re competing against other Top Factor Finance Companies right now – they’re going to give you the very best offer available today!
We Made It Even EASIER To Get Accounts Receivable Invoice Offers
On the go, use your Smartphone to get Factor App – Download FactorApp for your google android and/or apple app store account; Snap a picture or upload a copy of your open accounts receivable invoice, and within no time at all you’ll have offers from the top factor finance companies – eager to help your business grow and become more successful. It’s THAT EASY!
Factor App for iOS Apple Smartphones
Factor App for Google Android Smartphones