Grow your Small Business with financing help

How to grow your small business. Small to Mid-Sized Businesses are always looking for strategic ways to grow and become more profitable.

A good rule of thumb, make sure you have your capital contribution locked down as one of your very first preparation steps.

Funding can come from a variety of sources, including personal funds, a bank, outside investors and your accounts receivables.

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The First 3 Funding Options You’re Most Likely Already Familiar With:

  1. Personal Funds – Reach into your savings to fund your business growth, hire employees, cover day-to-day expenses and so on.
  2. A Bank – Drive down to your local bank, fill out paperwork and wait to see if you qualify for small business financing.
  3. Investors – Work up a business plan, executive summary, proforma, 5 – year profit and loss projections and start shopping your idea around to potential incubators and/or angel investors.

But number 4 you may not be as familiar with. Using your accounts receivables (money your customers already owe you) to finance your business growth. Get paid faster by reinvesting your earnings sooner with invoice financing.

Invoice financing has been around forever it seem, and small startups to huge companies like Snapple use invoice financing to increase their daily working capital and grow their businesses more quickly.

How Does Invoice Financing Work?

It’s pretty simple really. You invoice your customers for payment, and typically they send you a check within 30-45 days. What if you could instead invoice customers and get paid within hours! With invoice financing you can!

Invoice financing uses assets from your business (your accounts receivable invoices) to get your business immediate cash flow to hire additional employees, afford business expenditures, cover payroll, service new accounts and keep your business competitive in your industry.

If you’re not utilizing your invoice receivables as assets and your competitors are, they may be getting a leg up on you by affording them an opportunity to service new larger customer contracts and extend terms to those larger customers.

Don’t be forced to use your own profits to fund your customers business growth when offering net-30 to net-45 terms, instead use an invoice financing company and their money to fund your terms and strengthen your customer business relationships.

An invoice finance company will buy your invoices for immediate cash, so you get your money immediately and can reinvest in growing your business faster instead of waiting for payments while your customers use your profits to grow.

If you’re comfortable with the idea of selling your accounts receivable invoices for a small discount, in order to get paid immediately, then you should explore the benefits of invoice financing.

Get A Few Offers To Buy Your Accounts Receivable Invoices For Cash!

It’s recommended that you get a few offers when deciding which invoice financing company is right for you. You can visit www.factorbid.com and within a few minutes, you’ll have a few competitive offers from invoice finance companies to purchase your accounts receivable invoices for immediate cash. Factor Bid is free online business resource that you can use to get competitive offers from finance companies. You’re under no obligation to use any of the companies competing for your business. Factor Bid is completely free.

Get the knowledge and leverage you need to negotiate the best financing deal for your growing business at Factor Bid.

On The Go – Grab Factor App For Fast Invoice Financing Offers!

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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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