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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Online Business Finance Marketplace – Increase your Business-Cash-Flow today!

Are you facing cash flow gaps in your small to mid-sized business? Turn your business assets (invoices) into immediate working capital. Get Cash for your invoices by factoring.

Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount.  A business will sometimes factor its receivable assets to meet its present and immediate cash needs.

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Don’t wait 30+ days to receive payment, unlock cash that’s trapped in your accounts receivable invoices. Start factoring and get paid within 24 hours for invoices.

Get Started:

Go to Factor Bid – click the Get Started button and within the hour you’ll have factor finance companies competing for the opportunity to earn you business and provide you immediate working capital for your invoices!

On the Go:

Download Factor App for your Android and Apple Smartphones!

Cash Flow Planning Today’s Smart Business Parachute

Cash flow planning today, your smart business parachute. Nice to have before you need it! Why do some business owners wait until the last minute to fix cash flow gaps that their business is experiencing?

For example; You extend terms to a good trustworthy customer, expecting to get paid in 30 days from the date of delivery. At first the customer is amazing, everything is going great and running smoothly between your two companies, until one day when all of a sudden their payment doesn’t arrive as promised. You figure, ahh it must be a slight oversight on their end. So you make a note to give ’em a call.

A week passes and still no check. So you call and email again and this goes on for about 20 more days. Your note reminding them to pay you now feels more like a ransom letter than a friendly reminder.

So what happen? Well no one really knows at this point. Yes you called and emailed Accounts Payable and they promised the check was in the mail, but still no check. Their slow-pay is now really starting to affect your payroll and business operations. I mean this is a big customer and their invoice amount due is enough to cover a whole month worth of payroll.

There are two ways this usually plays out:

1.) Your customer finally sends the check, 28 days late and you continue with business as usual, however now each time you invoice them after delivery, you have this gut-wrenching feeling in the pit of your stomach, wondering when and if they’re even going to pay. Will you need to borrow money off your personal credit card again to cover payroll if their check is late again or worse yet, never arrives?

2.) The relationship was already fragile and this was the straw that broke the camel’s back.  Your customer is offended that you called and emailed so many times, almost implying that they weren’t good for the monies owed or something.

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In any event, either of the two above scenarios adds stress to a business relationship and can usually be avoided altogether. Yes of course it can, if customers would just pay on time, however it’s a proven fact that some customers just slow-pay and that is how it’s going to be. So knowing that some customers just have it in their business DNA to slow-pay, how can your business protect itself from the negative side affects of unpredictable cash flow in your business?

The answer, prepare your cash flow parachute just encase this ever happens to you. Don’t be caught by surprise and interrupt a good thing you have going at your business. You shouldn’t be punished for working hard because one or more of your customers had slow-pay DNA.

You can unlock cash tied up in your accounts receivable invoices by factoring. Factor finance companies buy your invoices for immediate cash so you get paid within hours of invoicing customers. You won’t have to worry about slow-paying customers, you can continue working hard and growing your business as usual.

Factoring enables you to cover;

  • payroll
  • expenses
  • and invest your earnings faster to help secure more new customers and grow your business faster.

Factor financing grows with your business. The larger your business gets the more immediate capital you can access from your invoices. You don’t need to create friction between you and slow-paying customers, all you need to do is focus on what you do best, running your business and creating new customers relationships.

It’s recommended that you get a few offers when choosing a factor finance company that specializes in your industry. Visit www.factorbid.com and select the ‘Get Started’ button to quickly and easily get competitive offers to buy your invoices for immediate cash. When Factors compete, You Win!

Source of funds and your business growth

Once you know your needs, you need to determine where the money will come from (source of funds). Don’t overlook this important piece of your business planning. Of course the idea is for your business to generate enough cash flow to pay for business expenditures plus your personal living expenses and more.

Assets:

To start – list any assets and cash that you are contributing to start-up or for expansion. Show the full amount of any lease, loans, investments by partners or other investors, etc.

Personal Requirements:

List funds you need to meet your personal living expenses. This will help in determining your projected cash flow each month or quarterly.

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Cash Flow Projections:

One of the things to remember in preparing your business cash flow projections is you’re not trying to determine profit or loss yet, but instead the timing of money coming in and going out of your bank account.

Sales Forecasts:

The sales forecasts you’ve done are formulated to carry forward to your ‘Cash in’ – providing an estimate of cash in your business. This helps demonstrate any terms you may provide to your customers for payment.

example; If you agree to accept payment in 30 days, a sale in February will show up as cash to your business in March under line item “Accounts Receivable”

Cash Flow Gaps:

If at the end of your lists, you see cash flow gaps, places where you may be short on funds during a specific time of the month / year, you may need to consider alternative financing (factoring) to help cover those gaps.

Remember sales may vary during peak sales season vs low activities that can occur during slower times of your business cycle or even when vacationing takes place.

Accounts Receivable:

Accounts receivable is a legally enforceable claim for payment held by a business against its customer/clients for goods supplied and/or services delivered in completion of the customer’s order. These receivables are generally in the form of invoices raised by a business and delivered to the customer for payment within an agreed time frame. Accounts receivable is shown in the business balance sheet as an asset.

Factor Financing Receivables:

Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash needs.

Compare Invoice Financing Offers.. Free:

It’s recommended that you get a few competitive offers when deciding which factor finance company best fits your business financing needs. Factoring your receivables will help your business access immediate source of funds and cover any problematic cash flow gaps.

Factor Bid:

Factor Bid is a free online resource for small to mid-sized businesses. Visit www.FactorBid.com to get started comparing offers from competing finance companies to buy your accounts receivable invoices for immediate cash. No more waiting Net30 or Net45, get paid for your accounts receivables within 24-48 hours.

Cash Flow Plan B – business finance awareness

What is your company’s Plan-B and does it cover cash flow gaps caused by slow-paying customers?

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What would happen to your business if;

  • A vendor demanded you pay COD (cash on delivery) and won’t extend terms
  • Your Bank decides to reduces your credit line
  • A client changes its policies from paying Net-10 to Net-45

If your company’s cash flow relies on everything happening perfectly, you have a disaster waiting to happen!

When the unexpected comes knocking you won’t have time to maneuver or look for other options. It’s a good idea to have a Plan-B, that way you won’t be caught off guard by events you can not control.

*Remember – you can’t make payroll or pay vendors with an IOU. So when the unexpected happens you need the ability to keep moving forward. Convert money owed to you from customers to immediate working capital, so you don’t have to worry about cash flow gaps and unexpected annoyances.

With Factoring you won’t need to chase customers each week for payments. The factoring company assists in collecting on-time receivables and increasing cash flow so you can focus on bringing in new customer accounts and the day-to-day business operations.

Factoring gives you access to professional credit checking tools so you can know if a potential new customer is a good candidate for extending terms to.

No more worrying about sudden interruptions, because your plan B provides you access to fast cash when you need it most!

It’s recommended that when choosing the best factoring company, you get a few offers. Factor Bid is a free small business resource that enables your business to Compare Invoice Finance Offers.. Free! Get the knowledge you need to get the best deal when factoring your accounts receivable invoices for immediate cash!

Do your customer slow-pay on purpose, you may be surprised at who’s admitting to it.

Is the long tail of your suppliers killing you? The growth of your company may be suffering due to the actions of slow-pay customers. This is not acceptable and we know a simple and easy way to fix slow-pay accounts.

Over half (57%) of international businesses surveyed by Basware and MasterCard admit to having actively delayed paying their suppliers in the past 12 months.

This can be solved with by enabling working capital optimization also know as Factor financing (receivable invoices) which allows buyers to better manager their cash flow and for suppliers to get paid sooner.

“When three quarters of businesses have more than 50 suppliers and about two thirds send and receive more than 100 invoices a month, a culture of late payments impacts individual organisations as well as the economy as a whole,” said Esa Tihilä, CEO at Basware.

SLOW-PAY RECEIVABLE ACCOUNTS ECONOMIC SUPPLY CHAIN KILLER

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When asked –

  • Three quarters (70+ per cent) of decision makers think late payment is a fact of business and will always happen, despite 90 per cent acknowledging that payment delays have wider repercussions for businesses, such as the ability to pay staff or reduce investment.
  • Only about 1 in 4 businesses today have automated processes to manage payments efficiently
  • Two thirds (67 per cent) acknowledged that they have used payment terms as a strategic tool to help manage cash flow

If your business is tired of slow-pay accounts and strenuous cash flow gaps then click here to compare invoice finance offers..FREE! Unlock cash when you need it, as soon as you need it! More working capital at your fingertips in a matter of a few hours.

NOTE: LOUDHOUSE surveyed 1,015 strategic decision makers with a view of both Accounts Receivable and Accounts Payable processes and issues across ten countries (Sweden, Finland Norway, Germany, UK, Denmark, Netherlands, Belgium, US and Australia) in mid-2014 to gather the above metrics.

Here is what you need to ask yourself when seeking more profit from your business

A businesses desire to scale shouldn’t be entirely based on demand for their product or service. Demand will certainly play a large roll in how or when a business will scale. To Scale your business effectively means anticipating demand, not reacting to it.

If a company acquires two or three new clients and then realizes it can not fulfill their demands, business growth efforts are likely to collapse. This kind of activity leaves room for competition to move in and service unhappy or under-serviced customers.

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Predictable cash flow provides a business the flexibility it needs to stay competitive, grow quickly, fulfill new customer demands and generate more profit.  Do you know what your predictable cash flow is?

How Does A Business Realize Predictable Cash Flow:

Build in sustainability and scalability in order to make sure future cash flow is predictable. Examples;

  • Lock in customers – Offer incentives, sign contracts, improve customer experience to ensure customers are incline to work with you over the long haul.
  • Implement a consistent sales and marketing process – Design a process, train  your sales staff, put performance metrics in place and hold your team accountable.
  • Make delivery of your products and services scalable and repeatable – learn from your mistakes, identify cash flow gaps within your sales cycle and figure out how to eliminate existing problems.
  • Free up cash flow from slow paying customer accounts – Factor finance your accounts receivable invoices to get money your customers owe you today, instead of waiting 30 or more days.
  • Once future cash flow becomes more predictable, fulfilling new larger client accounts and efficiently servicing existing client accounts becomes much easier.

Don’t worry about the cost of doing business along the way. It takes money to make money and scaling a business successfully is challenging; mistakes will be made and you may even overspend occasionally. Learn from your previous business activity and implement a strategy to avoid similar mistakes the next time around. Hire people to help you strategize, attend local small business events to discover new ideas and most of all keep a positive frame of mind.

To get access to immediate working capital you may need to pay as you go so you can profit as your grow! Leverage assets within your business, like your accounts receivable invoices or promised payments, so you can increase cash flow and go after larger new customer accounts.

*Free Small Business Finance Resource:

When you’re ready to unlock money trapped in your accounts receivables, visit www.factorbid.com to compare invoice offers to buy your invoices. Factor bid is a free service for small businesses. Factors compete for the opportunity to earn your business and buy your invoices. You’ll get the knowledge and leverage you need to negotiate the best deal and most money when factor financing your accounts receivable invoices.

 

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

Cash flow when you need it most, payment as fast as the next day!

Factor Bid – Compare invoice finance offers.. free!
Cash flow when you need it most, payment as soon as the next day!
#factoring (invoice finance)

Do you invoice customers for payment? Discover how in just minutes you can unlock money trapped in your invoices. Turn open invoices into immediate cash flow.  Fast | Easy | Secure www.factorbid.com

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If you don’t invoice customers for payment follow this link to see other types of small business financing offers!

On-time cash flow, the difference between growing business or going out of business

Working capital in today’s fast paced business world is proving to be a necessity. You gotta have cash today or face the consequences tomorrow.

Use to be that money on the books meant you really had nothing to worry about, right? Customers owe you money, you invoice those customers for payment and eventually when they get around to it, you get paid. They promise you payment, you promise others payment and so on and so forth.

So businesses start running accounts payables based on outstanding receivables, anticipating payments from extending terms to their customers and then budgeting their financial responsibilities accordingly. Until this happens.., your customers slow-pay or worse- don’t pay altogether. Now what? You’ve got bills due, promises to keep and you’re expecting that check; but now your customer is telling you you’ll have to wait.

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Waiting on accounts receivable payments can add a huge amount of stress to a business, not to mention the business owners. Many businesses run on razor thin margins in order to stay competitive, and don’t have the funds in reserve to finance slow-paying customers or cover payments for customers that don’t pay.

Take a look at your business operations today. If even one of your top 3 customers didn’t pay, could you continue to operate at the highest level of business operation or would it send your business in a downward tailspin of financial distress?

REDUCE, REDUCE, REDUCE and REPEAT

Reduce your liability in open accounts receivables. Reduce the amount of time spent collecting money owed to your business for goods and services that you’ve already delivered. Reduce bad-debt by unlocking capital trapped in your open accounts receivable invoices.

Factor finance companies have lots of money. They want to share their money with you and get you paid immediately for your invoices, usually within hours of invoicing your customers. Factors don’t mind waiting 30, 60 or even 90 days for your customers to pay up. They make a little bit of money by assuming responsibility of collecting the owed money and keeping your cash flush and on-time so you can keep running your business at the highest and best level.

Factoring your invoices enables you to get paid immediately. Think what you could do with more working capital right now.

  • Pay off higher interest loans
  • Purchase new equipment to increase productivity
  • Hire additional employees to help bring in new customers
  • Pay suppliers in advance to receive discounts on your purchased orders
  • Invest the money to expand your business model and generate additional income

However you decide to use your money, accessing it within hours of invoicing your customers will give you the leverage you need to stay competitive and grow your business brand much faster.

Choosing the Best Factor Finance Company in 3 Simple Steps

  1. Go to www.Factorbid.com
  2. Click “Get Started” button
  3. Choose the best available finance offer available today

Factor Bid gets you competitive offers from the top finance companies in that specialize in your industry. You’ll quickly be matched with the best rate, terms and offers today. Factor Bid is real-time and when finance companies now they’re competing for your business, they’re going to give you their most competitive offer right away or face loosing your business to one of their competitors.

Get the knowledge and leverage you need to negotiate the best financing deal for your growing business. Don’t risk not getting paid or the stress that comes with financing your customers while their businesses flourish and yours waits to be paid. Trade in those outstanding invoices for immediate cash flow and focus your time on gathering new customer accounts, not collecting money from completed work.

Factor Bid is a free online business resource for small to mid-sized business. You’re under no obligation to finance. Try it today to find out how much working capital your business can access!