New to Factoring?

For those who aren't familiar with factoring, it is basically a fast way to get cash to run your business.

Factoring is Not a Loan

When you send your customers an invoice, they usually have 30 days to pay you back. Factoring companies will give you the bulk of the cash up front, sometimes within 24 hours, and collect the payments from your customers themselves. Once the invoices are paid in full, you’ll get the balance left over, minus a small fee.


Factoring Doesn't Require Debt

Sounds simple enough – fast cash for your business – no loans, no debt.

So how do you go about choosing the best factoring company?

Not all of them are created equal. Not all of them will give you the same level of service you need to help grow your business.

Everyone claims they have the simplest rate structure in the industry, no long-term contracts, same day funding, no up-front fees, no monthly minimums or maximums, etc., etc., etc.

We also offer these same benefits, but we GO THE EXTRA MILE FOR YOU that other factoring companies don’t.

Here’s Why We Are The Factoring Company You Need For Your Business

No other factoring company matches our level of superior service and offerings.


As you can see, we simply have more to offer you.

Other factoring companies don’t even compare.
Gainesville

And Not All Factoring Companies Can Say This:

More than half of our new business comes through client referrals.

Some of the benefits you receive with factoring are:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information for the city of Gainesville

Gainesville is the county seat and largest city in Alachua County, Florida, and the principal city of the Gainesville, Florida Metropolitan Statistical Area (MSA). The population of Gainesville in the 2010 United States Census was 124,354. Gainesville is the largest city in the region of North Central Florida.Gainesville is home to the University of Florida, the nation's eighth largest university campus by enrollment, as well as to Santa Fe College. The Gainesville MSA was ranked as the #1 place to live in North America in the 2007 edition of Cities Ranked and Rated.

 

Also in 2007, Gainesville was ranked as one of the "best places to live and play" in the United States by National Geographic Adventure. Gainesville was ranked as the "5th meanest city" in the United States by the National Coalition for the Homeless twice, first in 2004 for its criminalization of homelessness and then in 2009 for its ordinance restricting soup kitchens to 130 meals a day. Numerous guides such as the 2004 book Cities Ranked and Rated: More than 400 Metropolitan Areas Evaluated in the U.S. and Canada have mentioned Gainesville's low cost of living. The restaurants near the University of Florida also tend to be inexpensive. The property taxes are high to offset the cost of the university, as the university's land is tax exempt. However, the median home cost remains slightly below the national average, and Gainesville residents, like all Floridians, do not pay state income taxes.

 

 

Information for the state of Florida

In the twentieth century, tourism, industry, construction, international banking, biomedical and life sciences, healthcare research, simulation training, aerospace and defense, and commercial space travel have contributed to the state's economic development. The Gross Domestic Product (GDP) of Florida in 2010 was $748 billion. Its GDP is the fourth largest economy in the United States. In 2010, it became the fourth largest exporter of trade goods.The major contributors to the state's gross output in 2007 were general services, financial services, trade, transportation and public utilities, manufacturing and construction respectively.

 

In 2010 and 2011, the state budget was $70.5 billion, having reached a high of $73.8 billion in 2006and 2007. Chief Executive Magazine name Florida the third "Best State for Business" in 2011. Agriculture is the second largest industry in the state. Citrus fruit, especially oranges, are a major part of the economy, and Florida produces the majority of citrus fruit grown in the United States. In 2006, 67% of all citrus, 74% of oranges, 58% of tangerines, and 54% of grapefruit were grown in Florida. About 95% of commercial orange production in the state is destined for processing (mostly as orange juice, the official state beverage). Citrus canker continues to be an issue of concern. From 1997 to 2013, the growing of citrus trees has declined 25%, from 600,000 acres (240,000 ha) to 450,000 acres (180,000 ha). Tourism makes up the largest sector of the state economy. Warm weather and hundreds of miles of beaches attract about 60 million visitors to the state every year. Florida was the top destination state in 2011. 42% of poll respondents living in the Northeast United States said they planned on visiting Florida over spring break.

 

Amusement parks, especially in the Orlando area, make up a significant portion of tourism. The Walt Disney World Resort is the largest vacation resort in the world, consisting of four theme parks and more than 20 hotels in Lake Buena Vista, Florida; it, and Universal Orlando Resort, Busch Gardens, SeaWorld, and other major parks drive state tourism. Many beach towns are also popular tourist destinations, particularly in the winter months. 23.2 million tourists visited Florida beaches in 2000, spending $21.9 billion

 

You have things to do and sometimes it just does not make sense to put them off until you get paid  

Companies of all different sizes, including start ups, use factoring; and today factoring has become common business practice across many industries. -Gainesville Factoring Companies

 

 

THE INSTRUMENT OF PROFITABLE COMPANIES  

Gainesville Factoring Companies Articles

"How a Factoring Company Saved This Owner of a Trucking Company Business"

 

Transportation industry plays a vital role in the economic scene. As people's lives become more and more sophisticated as time goes by, making the most out of the limited resources is the concern of all. Say for example the proper use of land to get optimum profit and convenience or what is known as the zoning. It is defined as the process of planning for land use to allocate certain kinds of structures in certain areas. This method separates the manufacturing sites from the sources of its raw materials, the employees and employers to their respective offices. This made the transportation industry play a vital role in the economic scene. It is a primary necessity for businesses of any size and of any type. It does not just transport raw materials to the manufacturers but also bring finished products into our every door.

 

Investing in a business which plays a vital role in the current economic scene is a thing that every investor should not think twice about. But business does not work that easy. The big question is, how you are going to survive the most challenging phase of establishing a business - the start. Starting a business requires a capital. If you now have enough money for capital, you can now start your business and since you are investing in a very promising type of business, finding customers is not a problem. The problem is, what if you found bad ones. Even if your customers are also managing a business and expecting cashflow, which does not guarantee that they would pay you up to date because some businesses are just ill-managed. For the business to survive, the most important thing that you would be doing is funding your operational cost - make payrolls, fuel, maintenance - it should rely on cashflow, but since things like mentioned above is very common, some business owners would resort for a loan. But that does not solve the problem of getting your receivables paid on time. As a business owner, you cannot afford the time it takes to collect the receivables, while trying to make your business grow.

 

Mr. Paul, an owner of a small trucking company experienced the same kinds of problems and shared how he managed to survive. "I just released my head from the stress of how am I going to get my receivables, and focused on making the business grow"¦"

 

Mr. Paul just got his retirement fee from a big trucking company for almost forty years and was thinking on how to double his money in the shortest time possible. Seeing a small trucking company as a business of great potential and is a business that he knows. When he was still driving a truck, he was fascinated by how much money the company is making. He has also never experienced a delay in his salary. When he decided to invest his retirement fee in establishing a small trucking company, everything was just according to what he expected. He started with a single truck from his home. He started with just a few clients, the ones he knew already and never missed one deadline and kept freight damage as minimal as possible. Because of his outstanding services he started to get referrals and had more work than he can handle. From then, he started to expand, bought more trucks, hired more personnel. Using the knowledge he acquired from the company that he had served for a very long time, and dedication to his work, his little business grew in a rate that he had never imagined. The business is now requiring a more strategic plan and when Mr. Paul thought that everything was going very well, he encountered problems that he failed to foresee.

 

He had customers that made him wait for weeks or even months before paying. Since his little business is rapidly growing, his operational cost is also growing . This is a problem that he never knew and never observed in his entire career as a driver of a trucking company since he was never in an administration role. He was at the verge of breaking down, his business is losing money, growing too fast, not big enough has to rely cashflow to keep up to his fast growing business. He had to make his payroll, pay his suppliers, maintenance and fill his orders. Mr. Paul thought of going to bank and apply for a loan but was denied. "Maybe because I had a bad personal credit...haha"

 

Mr. Paul thought of declaring bankruptcy because of the stress that he never imagined he will be handling. He had to think of how to manage his business and at the same time, how will he keep the business alive by thinking of a solution on how is he going to deal with his receivables.

 

"You know that time, I, I, I just don't know what to do... I felt that as the business kept growing and growing, I become more and more incompetent. Then suddenly, a hero came along... Just at the nick of time. "

 

Then a close friend of his introduced him to a factoring company and everything turned out just fine. So what is this factoring company then? What does it do? How did it save Mr. Paul's business?

 

Well, this is how it works, Mr. Paul sells his invoices or receivables to a factoring company at a discount and not in an amount where he can no longer make a profit. The factoring company will then be the one collecting the invoices of Mr. Paul's business from his customers. Say for example, Paul still has 100 dollars to collect from one of his customers. He then sells it to the factoring company at a lesser price, say 90 dollars. The factoring company will now be the one who is going to get the 100 dollars collectible from Paul's customer.

 

The factoring company immediately gave Mr. Paul the cashflow he needed. He now has instant customer credit checks. He can rest well and likes doing business with companies that pay their bills on time. Save him from the stress of thinking how to deal with his collectibles, thus saving time and money. He can now focus on growing his business and keeping his customers happy. Increase his sales and cashflow.

 

The Factoring Company not just saved Mr. Paul's start-up business but made it a big company now. It has helped Mr. Paul's business, why don't you let it help yours?

 

 

 

You have things to do and sometimes it just does not make sense to put them off until you get paid

 

 

Gainesville Factoring Companies Articles

Financing Temporary Staffing Agencies

 

In recent years temporary staffing agencies have become very profitable, because the current business environment prefers to outsource employees rather than hire them. This situation creates a very attractive and viable opportunity for temp staffing agencies. But, similar to other businesses, in order to operate a successful temp staffing agency, working capital is an absolute necessity. This requirement of working capital has become a problem for most agencies who often suffer from a cash flow crisis. Having adequate cash flow prevents the company from being run effectively, thus stopping the company from adding new clients. The result is that the business fails to grow. Fortunately, there is a solution to this problem, and the solution is the right type of financing.

 

Payroll and Bills Must Be Paid on Time!

 

The most important and probably the biggest expense of any temp staffing agency is employee payroll. Obviously, employees expect to be paid regularly and on time, and if this is not the case, they'll quickly move on and find work elsewhere. In addition, the agency needs funds to pay for other employee-related expenses, such as employment taxes. When a business fails to comply with tax regulations the costs involved can be extensive and can the even put the business itself in jeopardy.

 

Business Growth Is Impossible without Funds

 

Generally, Government and commercial clients pay their invoices somewhere between 30 and 60 days, and it's this timeframe that creates problems for temp staffing agencies. When an agency takes on a new client, before they start getting paid, the agency must be able to pay the employee's salary for up to two months.

 

This means that the only way to grow a temp staffing agency is to have a cash reserve to pay for running expenses. If you don't have a reserve of funds, then you can't take on new contracts; and if you work with larger contracts you need a larger reserve. And this is where it becomes a vicious cycle, because if you can't take on new contracts then business growth is impossible.

 

Payroll Funding: Helping Your Business Grow

 

Fortunately, there is a solution available for temp staffing agencies to resolve this very common financial problem, and it's known as Payroll Funding, or Payroll Financing. Payroll Funding is a solution that's been designed to help staffing agencies access much-needed working capital.

 

Payroll financing is actually a type of Invoice Factoring, allowing you to finance your slow-paying receivables. This type of funding provides your temp staffing agency with immediate funds. Now there'll be no more waiting for your Government and commercial clients to pay in 60 days - the payroll funding company will pay you within a day or two! Now you'll have the working capital your agency so desperately needs to meet payroll and other expenses; and now you can move forward and grow your business without constantly worrying about slow paying clients!

 

How Does Factoring Work?

 

Factoring is a very straightforward process. Basically, invoices are financed in two separate payments, with the first payment covering approximately 90% of the gross invoice value, and the second payment, which is the remaining 10% less factoring fees, is remitted to you once your client has paid. The first payment is paid into the temp staffing agency's bank account very soon after the invoice has been submitted for financing. In the meantime, your clients are not required to pay any sooner - they simply pay on their regular schedule.

 

Payroll Funding Is Available to Small Agencies

 

One huge advantage of factoring is that it's available to small agencies (even start-ups!) that don't have many assets. Because it's the invoices which are the assets the factoring company is financing, it's the credit quality of your customers that the factoring company is most interested in. Factors can only finance invoices if your customer (the payer) has good commercial credit, and that's why factoring has become a very viable and attractive option for both small and growing agencies whose greatest asset is their good clients.

 

Growing Your Agency with Factoring

 

Let's take a closer look at how your temp staffing agency can use invoice factoring to grow your company. We'll assume for the purpose of this article that you have a new client who requires six full-time employees for a few months. This new client is a large corporation and has a good reputation. The problem with this corporation, however, is that they pay their invoices in 50 days, and there's no way you can afford to carry the cost of the contract.

 

What's the solution? The solution is actually quite simple: you invoice the client weekly and factor the invoice! This funding strategy allows you to service the contract by providing your agency with weekly funds to pay employees. Providing you have clients with good credit and your agency provides good services, receivables factoring can be used very effectively to grow your business.

 

When factoring is used properly, it can help grow your temp staffing agency well beyond its current financial capabilities.

 

 

 

 

 

 

Gainesville Factoring Companies Articles

Business Is Great, but Our Company's Cash-Strapped!

 

There comes a time in the life of most businesses when cash flow becomes a problem, and it's not just during difficult times that this occurs. There are so many different reasons why businesses may need an injection of cash, like sudden growth, or perhaps wanting to purchase new equipment or service bigger clients. Every business at one time or another will require urgent funding to sustain or grow their business.According to research, many small and medium-sized businesses are failing, certainly not due to lack of sales, but solely because they're unable to meet their short-term financial obligations. Considering the time, money, and personal investment that goes into the creation of every business, the failure of a business to thrive has become a heartbreaking reality for many people. Why would a profitable and growing business find itself in financial trouble? The answer is very simple. When just one or more of your larger accounts hold off on paying their accounts for perhaps an additional 60 or 90 days, you've now got a cash flow problem.

 

Running Out of Funding Options?

 

When experiencing cash flow problems, business people typically depend on conventional lending sources for a corporate line-of-credit, and many find themselves applying for short-term bridging finance. And how many business owners admit to using their personal credit card to pay for business-related expenses? However, there are times when traditional methods of funding are no longer available, leaving the acquisition of extended financing a frustrating and sometimes impossible task.

 

Fortunately, there's a viable alternative today, one which has been around for a long time but one that many businesses are not fully aware of. There's now a way for businesses to avoid cash flow problems and continue growing their business from strength to strength, even during difficult times. Factoring, also known as Accounts Receivable Financing, Asset Based Lending (and various other terms) is an alternative form of financing, designed to help businesses through periods of expansion and business growth. Factoring has quickly become a very practical and workable financial solution for many businesses, and more and more we're seeing businesses from different industries look towards factoring to resolve their cash flow problems.

 

How Does Freight Factoring Work for Trucking Companies?

 

Basically, a business with creditworthy accounts receivables can use factoring to receive an immediate injection of cash on those receivables. Factoring companies will typically say yes when a bank says no, thus providing a business with a much-needed cash injection. The process of factoring is actually quite simple. Your trucking company needs cash, and because you have quality accounts receivables your chosen factoring company will purchase any number of those receivables and immediately provide you with cash - anywhere up to 90% of the value of your invoices. Once your customer has paid the factoring company the total amount of your invoice, the remaining balance will be forwarded to you - less the agreed-upon fees.

 

A good factoring company will respond quickly to its trucking company clients and provide them with personalized and professional attention. With freight bill factoring, a trucking company will always have its cash needs satisfied with cash flow. It may be true that, when compared to other means of lending, factoring is more expensive, but borrowers report that the benefits they receive far outweigh the cost.

 

Freight Bill Factoring Is Not A Loan

 

Perhaps the greatest advantage of invoice factoring is the fast turnaround time because, unlike banks, there's no loan approval process with factoring. This means that business owners of trucking companies can receive cash in-hand on the same working day! In order to be approved for freight factoring a trucking company must have creditworthy customers and have a good reputation; however, once approved for freight factoring the process of receiving funding is quite automatic. Cash advances will be made on the same day, and it's important to note here that future financing is only limited by the value and number of receivables involved.

 

Freight Bill Factoring Is Very Popular with Trucking Companies

 

In the last decade many trucking companies have taking advantage of freight factoring, mostly because it's a great alternative to bank financing. In fact, freight factoring is often recommended by trucking companies financial advisers or accountants. We know of many cases where freight bill factoring is solely responsible for trucking companies being able to accept and process orders from customers that otherwise would have declined due to a lack of financing. Freight bill factoring has saved many companies from severe financial crisis, and even bankruptcy.

 

It's now very clear that freight bill factoring is playing a very important role in today's business environment. This type of financing allows trucking companies to increase loads, expand their customer base, and even survive a seasonal slump. The truth is that freight bill factoring works, and it works well!

 

 

 

 

Gainesville Factoring Companies Articles

Everything You Need to Know about Invoice Factoring

 

You've probably heard about invoice factoring, but like many business owners you may not be entirely sure how it works or whether it could help your own business. In this article we'll try to answer all your questions about what invoice factoring is, how it works, and whether it could help you grow your business.The following definition of invoice factoring may sound too good to be true, but let's look anyway! "Invoice factoring is a viable alternative to bank financing and other traditional types of financing, but it's not a debt, and there are no strings attached." For anyone who's approached traditional lending sources for financing and been refused or left hanging for weeks or months, yes, this probably does sound too good to be true, but it's actually not! Invoice factoring can provide the working capital you need to help your business grow and prosper, so read on then decide for yourself.

 

How Invoice Factoring Works

 

With invoice factoring you no longer need to wait 60, 90, or even 120 days to receive payment from your customers, because invoice factoring converts these invoices into immediate cash in-hand. It's up to you to determine which invoices, and how many invoices, you wish to factor, following this simple process -

 

- Once you've been accepted for invoice factoring by your factoring company, you can begin submitting your unpaid invoices. These invoices must be for products that have been delivered or work that's been completed. The process to follow is to fax or email a copy of the invoice directly to the factor, while at the same time invoicing your customer as usual.- Within 24 hours you'll receive a cash advance from your factoring company. Your invoices will be verified by the factor and you'll receive a cash advance of up to 95% of the invoice, which will be paid directly into your bank account.- Now that you've received this cash advance, you continue on with your work while the factoring company works to collect on the invoice on your behalf. Your factor will be highly experienced in collecting on invoices, thus allowing you to do what you do best, which is to continue providing excellent customer service and focusing on other important aspects of growing your business.- It's entirely up to you how many invoices you factor and how many clients you choose for the factoring process. You may decide to factor all your invoices, or it may be that you have one client that's always late in paying and you'd prefer the factoring company to only collect on that one invoice. It's your decision!

 

The Benefits of Invoice Factoring

 

The major benefit of invoice factoring is that, as the business owner, you're controlling your cash flow. Of course, there are other advantages of using a factoring company which can help your business grow and prosper.

 

No. 1: Your Factoring Company Will Provide Background and Credit Verification

 

It's very important to the viability of your business that you work with reliable customers in fact, it's the only way to turn your sales into revenues and to develop a solid payment history. But, we all know just how expensive it can be to run background and credit checks, and this simple exercise can dig deep into your working capital.

 

No problem! These checks will be provided to you by your invoice factoring company at no additional charge to you, which will provide reassurance that you are in fact working with quality customers. It also means that any issues that may arise can be addressed before they negatively affect your company.

 

No. 2: Your Factoring Company Can Assist with Credit Building and Repair

 

Perhaps your business credit is not ideal, but the good news is that you could still qualify for an invoice factoring program. The benefit of invoice factoring for a business with less-than-perfect credit is that, not only will you have available cash to meet your daily operating costs, you'll also be able to rebuild your credit rating by paying down current debt. Factoring companies are also well-equipped to assist start-ups, so if you're just getting your business up-and-running, invoice factoring is the perfect way to maintain regular cash flow.

 

No. 3: Invoice Factoring Opens Your Business to Great Money-Saving Opportunities

 

With invoice factoring, your business can utilize this rejuvenated cash flow to not only save money by offering competitive rates, but you'll now be able to negotiate early pay discounts and other incentives with your suppliers. And, depending on how many invoices you decide to factor, you could eventually qualify for a reduction in rates by receiving a volume discount.

 

No. 4: Invoice Factoring Provides Steady Cash Flow

 

In order for any business to grow and prosper it's vitally important to have a steady cash flow. And that's the beauty of invoice factoring: instead of late-paying customers controlling cash flow, the business owner regains control of the working capital. Perhaps you're simply tired of waiting for invoices to be paid, or maybe you're in an industry with seasonal fluctuations; whatever the reason you're struggling with cash flow, invoice factoring can help you regulate and take control of your business once again.

 

No. 5: Invoice Factoring Allows You to Dream Big Again!

 

Having a steady business is one thing, but having a growing business is what every business owner dreams of. Now that you've been accepted for invoice factoring and you have a steady cash flow, there are many ways you can use this cash to grow your business.

 

- You can increase your marketing efforts and get your name out there;

 

- You can negotiate bigger and better contracts with bigger clients;

 

- You can invest in technology upgrades;

 

- You can employ experienced personnel, or provide training programs for existing staff;

 

- You can upgrade or replace outdated equipment; and

 

- You can relocate your business or invest in expansion.

 

No. 6: Invoice Factoring Is Not a Debt to Your Business

 

It's very important to note that invoice factoring is not a debt, so there will be no more debt added to your balance sheet. In fact, it's exactly the opposite, because invoice factoring provides cash in-hand, so you can pay off old debts. The money is already yours, so there's no money to pay back or interest to add on. All invoice factoring does is get money that's owed to you into your bank account - faster.

 

I've Never Heard of Invoice Factoring

 

 

Many businesses know very little, or nothing at all, about invoice factoring, which is strange because invoice factoring is certainly not new. Perhaps it's because we typically think of bank loans and other traditional types of lending when looking to grow our business; however, factoring goes right back to the Roman Empire. Back then, businessmen, particularly farmers, used factors to grow their business, and in more modern times factoring was used to finance transactions in the clothing and textile industry, helping businesses accept larger purchase orders and pay for raw materials. Today, invoice factoring is used by almost every industry you can think of, like -- Construction

 

- Transportation

 

- Medical

 

- Staffing, HR

 

- Consulting

 

- Engineering

 

- Media and Marketing.

 

Understanding the Language of Invoice Factoring

 

Invoice factoring does appear to have its own language, so let's clarify some of the terminology -

 

- Your customers are known as Account Debtors.

 

- The report showing the total amount of unpaid receivables in addition to the amount of time they've remained unpaid is known as an Accounts Receivable Ageing Report.

 

- The two terms Invoice Factoring and Accounts Receivable Factoring can be used interchangeably because they mean the same thing.

 

- The percentage of the invoice charged by the factor as a fee for advancing funds is known as the Discount Rate.

 

- When your factor conducts background research to assess potential customers this is known as Due Diligence.

 

- The cash that's advanced to the business, typically within 24 hours and usually ranging between 80% and 95% of the total invoice amount, is known as the Factoring Advance Rate.

 

- The third party who connects a business with the right factoring company, to meet their business goals and needs is known as a Factoring Broker.

 

- The right to maintain possession of property until such time as a debt has been discharged is known as a Lien.

 

- It can occur that a customer fails to pay their invoice on time, or they may never pay their invoice. Non-Recourse Funding is where the factor assumes full responsibility for funds lost. Because the factoring company accepts this responsibility, non-recourse funding is therefore more expensive.- With Recourse Funding, your business will be required to buy back the receivables if your client fails to pay within the agreed-upon terms.

 

- The amount of money withheld by the factor until full payment has been received from your customer is known as the Reserve.

 

- Staffing companies may choose to enter a one-time agreement in order to factor a single invoice. This is known as Spot Factoring.

 

How Does Invoice Factoring Affect Your Customers?

 

It's important to point out here that your factoring company is not a collection agency and that factoring is not a bad thing. The aim of your factoring company is to maintain a good working relationship with both you and your customers, which means that your customers will receive great customer service. Both you and your factoring company have one common goal, and that is to ensure the payment process of your invoices is as seamless as possible. See below for how factoring typically works -

 

- You've decided to start factoring, so the first step is for your Account Manager to verify with your debtors that they are indeed your customers and to inform them of a change of address for remittances.

 

- Your customers must pay their invoices anyway, so a change of remittance address should not affect them in any way.

 

- Your account manager is a professional when it comes to collecting on invoices, so they will simply advise your clients that they will be managing your invoices in future and taking over your accounts receivable.

 

- And that's all there is to it! Nothing should change between you and your customers. They'll still receive an invoice from you; but their payment will now be sent to a new Post Office box. Your Account Manager will always be on hand to resolve any issues that may arise.

 

How Do I Choose the Right Invoice Factoring Company for My Business?

 

When you start looking for factoring companies you'll discover that there are many different companies out there, but they're certainly not all the same.

 

When making comparisons we suggest you consider the following points -

 

1: Factoring Fees

 

It's true that factoring fees can be more expensive than traditional bank loans, but sometimes the decision businesses are faced with is to simply have access to some working capital or have no working capital at all. What should you be aware of? You need to know the overall factoring cost, in addition to any smaller (or hidden) fees your factor may charge. These fees might include -

 

- Account Setup Fees

 

- Application Costs

 

- Credit Reports

 

- Costs to Research Liens

 

- Money Transfer Fees, or

 

- Last-Minute Funding.

 

Choose a factor that you believe you can trust and one that you feel completely comfortable with; because you're also looking for great customer service. Remember also that factors may charge for different things, and there may be hidden fees.

 

2: You Need Flexibility, so Carefully Check Your Proposed Contract

 

It's very important that you carefully read the fine print of your contract, prior to signing on the dotted line. It would be so disappointing to sign a factoring contract only to realize that you didn't completely understand the terms and now you're locked into a contract that's not clear on how the factoring company charges or how many invoices you can factor per month - or even worse - that you're now legally bound to this factoring company for the long term. Yes, long-term factoring contracts do exist, but be prepared to pay a lot of money if you try and break the contract. Make sure you know exactly how long you're signing up for, which of your clients are eligible for factoring, and how much per month you can factor.

 

3: With Invoice Factoring, Communication Is Key

 

Great customer service is very important with any business, and the most important part of great customer service is good and easy communication. And now we're talking about dealing with a company that's handling your money, so you can see how important good communication is! The last thing you need from a factoring company who's handling your money is being forced to wait for days for someone to respond to your phone call or email communication. Any factoring company you talk to is going to say their communication and customer service is really great - but be very cautious. How well did your potential factoring company respond to your initial queries? Then ask yourself: is that how you'd want them to deal with your customers? Remember there are plenty of factoring companies out there, so if the answer to these questions is not an unequivocal ‘yes', then find someone else.

 

4: Look for a Factoring Company That Has Industry Expertise

 

Yes, there are factoring companies out there that cover general factoring, but ideally, you'll choose someone who specializes in your own industry; someone who has a good working knowledge of the type of business you're running. Once you start looking for the right factoring company for your business you'll see that there are many factoring companies that specialize in specific industries, which means they already know a lot about your business model. And, if they have a lot of expertise, they'll probably be able to offer specific programs that relate to your industry, like fuel cards, or back-office support. These little extras can be just what you need when deciding whether or not to factor your invoices.

 

 

 

 

 

Gainesville Factoring Companies Articles

Small Business Invoice Factoring: The Clever Choice!

 

Many small businesses are discovering invoice factoring and quickly realizing this was a very smart business choice! Why? Because small business invoice factoring converts receivables into immediate cash!

 

The Ideal Alternative to Traditional Bank Loans

 

Small businesses are discovering that invoice factoring is the perfect, and much easier, alternative to traditional funding sources, like bank loans and cash advances. Any small business who sells to the government or other companies can use invoice factoring to enjoy the many benefits of accessing immediate cash flow. Whether you've applied for traditional funding and been refused or applied and are still waiting to hear if you've been accepted, keep in mind that small business invoice factoring is a very viable option for you.

 

How Does Invoice Factoring Work for Small Businesses

 

One of the major benefits of small business invoice factoring is that it's the credit worthiness of your customers that determines the funding decision. This means that if you're a business who sells to the government or other businesses with good credit, you're the perfect candidate for small business invoice factoring.

 

Applying for invoice factoring is a very simple process, and you certainly won't be forced to wait weeks, even months, for a decision as you would with traditional funding sources.

 

Why Small Businesses Are Choosing Invoice Factoring

 

Many businesses are only just learning about invoice factoring, even though factoring has been around for a long time. Any business owner who has applied for a bank loan knows only too well that, to start with, the application process can take months, and secondly, there's still no guarantee you'll be approved for finance.

 

According to the Small Business Administration, in the first quarter of the year 2015 small business loan approval rates at banks were 22%, and at credit unions it was 43%. The limit on business credit cards is often capped at less than $100,000, which is often not sufficient to cover unexpected expenses or large projects.

 

Invoice Factoring: The Smart Alternative to Traditional Lending

 

Today, small business invoice factoring has become the smart alternative for many business owners because factoring provides an immediate cash advance, with no restrictions placed on the money received. It's also important to note that factoring is not a debt, which means there are no limitations on how you choose to use the funds received.

 

Yes, small businesses can access quick money with a merchant cash advance, but there's always a high cost involved. You'll soon discover that the cash advanced will cost your business more than 70% effective annual interest. Alternatively, cash advance lenders demand daily repayments with full payment due in just a few months. The demand for daily payback can destroy a small business, but sometimes business owners are left with no choice.

 

So, let's take a quick look at just some of the benefits of small business invoice factoring, and once you read through this list we're sure you'll think of more benefits to your own business.

 

With this immediate cash advance you'll be able to -

 

- Employee new staff members

 

- Easily meet payroll

 

- Accept larger orders from bigger customers

 

- Invest in marketing and sales

 

- Expand manufacturing and production

 

- Your business will be able to weather cash flow cycles and seasonal sales periods

 

- Pay down any existing debt

 

- Take advantage of early pay discounts from your suppliers (these discounts often cover your factoring fees)

 

- Extend your customers' payment terms

 

- Provide a smooth cash flow to support daily business operations

 

- Overheads are lowered due to reduced administration expenses

 

- Your business will be self-financed during rapid growth periods, without having to give up equity.

 

As you can see, the benefits of small business invoice factoring are many and varied, so why not contact us today and let's talk business!

 

 

 

 

 

Gainesville Factoring Companies Articles

The benefits of using a Factoring company versus a bank loan

 

If you are looking for a convenient way to obtain business capital, factoring is one of the best options available out there. From a recent study, it has been identified that many people go for bank financing in such instances, considering that it is the least expensive method of investing. However, factoring is associated with many other advantages and we will let you know about them through this article.

 

A proper cash flow is something that every business in the present world should have. In addition, they need to speed up their cash flows along with time. Otherwise, it will not be possible for them to get banks for financing. Unfortunately, banks are not in a position to accommodate all the financial requirements of a company, due to tough credit standards. That is where factoring comes into play. It happens when a company sells its accounts receivable to a bank or a factoring company. The amount that can be taken depends on value of the invoice.

 

Key benefits associated with factoring

 

' A company can get large amounts of capital through factoring. It is because this method is entirely based upon accounts receivable. It has impressed many small scale businesses out there since they can obtain a bigger line from their accounts receivable for services or goods. They will not be able to get such a big amount of capital from any conventional bank lender out there. Factoring is something that is based on the credit strength of your potential customers. If your company has more potential customers with healthy credit strengths, you can easily enjoy the benefits of factoring.

 

' Factoring is quicker than traditional bank loans. Since most of the accounts receivable factoring lines are in a position to be set up, approved and actively funded within a matter of few weeks, you can go through a hassle free process. However, banks will take more time to engage with their credit reviewing activities about your company. They might even wait for audit results or fiscal period closes. Therefore, if you are in need of quick business capital, factoring is the number one option available out there to consider.

 

' Factoring is something that expands quickly along with the growth of your company. Almost all the factoring companies out there support it. Your company doesn't need to have an excellent track recording of business. You just need to select a factoring company that is big enough to accommodate all your business development ambitions.

 

' A factoring company does not offer loans to their clients. Therefore, you cannot find many similarities between a loan and factoring. A factoring company will purchase your accounts receivables along with cash. Therefore, it can be considered as a similar process to increasing the working capital, while showing it as a liability in the account balance sheets. This will even reduce debt in the balance sheet, when compared to borrowing. At the end of the day, your company will get the opportunity to enjoy a lower debt to equity ratio.

 

' Factoring is less expensive than equity. Most of the businesses approach equity investors to cater their financing requirements. However, there isn't any substitute for equity capital in some expansion purposes and business investments. Almost all the equity investors expect a higher return from the accounts receivable than the cost. When it comes to factoring arrangements, you won't be able to find any dilutive effect on shareholders. This will assist you a lot to stay away from hassle.

 

' Factoring is also recognized as one of the best options available to improve your turn. In the present world, many factoring companies will verify invoices with your customers and check whether they are being paid on time. This will motivate your customers to pay the invoices on time through a gentle reminder. This will result in a better service delivery from your end as well.

 

 

 

 

 

Gainesville Factoring Companies Articles

Factoring

 

Invoice factoring
trucking factoring companies
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As the owner of your own business, you may be more than aware already of the difficulty in making sure that cash flow issues do not become a problem down the line. After all, the worst thing that can possibly happen for your business is to find yourself embroiled in a long and difficult situation that leaves you forever trying to find two pennies to rub together.

 

For any business in this situation, the problem can come for waiting for work to clear up and actually be paid into your account. Invoices, cheques and the like can take some time to actually processed which can leave you with short-term cash flow issues. Thankfully, there are options out there for businesses to look into - and one of these is factoring companies.

 

Factoring companies will, in exchange for your invoices, provide you with the cash today so that you don't need to worry about the waiting period that could make paying the bills and getting materials more difficult. With this type of setup, invoice factoring can become incredibly useful for many businesses who need to get out of a cash trap which they have found themselves in.

 

Because, depending on the size of the job, it can take up to 60 days for some businesses to get paid then it's important to cover your own back and not leave yourself short in that day. after all, how many businesses have two months revenue just lying there to cover all the losses until they get paid?

 

This is especially true of trucking companies. They tend to deal with lots of invoices which means a significant amount of running around and donkey work for the business owner themselves. Trying to get paid in time can become an incredible hassle and this is why you get specific trucking factoring companies who are happy to help out truckers specifically.

 

As we all know, trucking is an incredibly large industry with many companies out there employing hundreds of drivers. Unfortunately, many of these drivers can spend night in the cold or hungry as they are still waiting for work from six weeks ago to actually pay them. When this is the situation for a trucking company, turning to factoring companies for assistance might be the best choice left.

 

This means that a trucking company can pay the wages of the staff, keep all the vans topped up with fuel and continue to scale, grow and expand without always waiting for the never-never with money which is taking forever to arrive coming in. businesses running without a factoring model put in place are leaving themselves in significant risk, as competitors cash out fast and continue to expand.

 

There's genuinely nothing to be worried about when it comes to using a Factoring company - they aren't like a payday loan firm or somebody who is going to leave you with a huge pile of debt to apy back. Although you are technically borrowing a loan, so long as you only ever give them genuine invoices from work you have already finished you are merely speeding up the payment process.

 

In the United States, where trucking companies thrive, factoring companies are not considered borrowing in any capacity. This confidential agreement then allows both parties to profit and enjoy a comfortable future - it gives the factoring company a guaranteed asset of income to add to the list and it gives the trucking firm a wad of cash that they worked hard to earn.

 

The trucking company will usually need to pick up the invoice and cash it in still, and then make the payments back to the factoring company. Because it's a confidential agreement, and it can look bad for a business to be involved in this type of short-term finance even though it's perfectly legal and a very common practice, it's usually in the hands of the company to get the money for the factor.

 

This is an extremely old business type and has been used for many years by many different types of work - but none more so than truckers. While you may miss out on a small part of the money , something like 15% depending on who you work with, it means that you are getting the money today and can actually start putting some food on the table.

 

After all, an IOU or an invoice is not going to be you fed and washed, is it? For trucking companies when the money can be good one day and gone the next, it's up to the drivers to work sensibly and to ensure they are leaving themselves with a significant amount of time and finance to get through the week until they are paid again.

 

So the next time your trucking business is having some short-term cash flow issues and you are spending too much time chasing up slow paying clients, why not start considering to use factoring businesses as a way to change your motive and give yourself a more comfortable future in the eyes of your trucking staff and your bank balance?

 

 

 

 

 

Gainesville Factoring Companies Articles

Questions You Need to Ask Your Factoring Company

 

In today's marketplace we're seeing more and more factoring companies, and factoring fees, rates and agreement terms have become very competitive. This means that, as a potential factoring customer, this competitiveness should work to your advantage. However, there are some issues you must consider when choosing a factoring company to suit your specific requirements.

 

Before entering into any factoring agreement, here are some important questions you should ask -

 

What Are Your Terms?

 

As a factoring customer, you'll be looking for as much flexibility in your factoring agreement as possible. It may be that you choose a long term contract with your factoring company if it includes flexible rates or a price break. In today's competitive market, many factoring companies are agreeing to adjust their rates based on competitive offers from other factors or increased factoring volume.

 

The majority of factoring agreements are a one year contract, which appears to be industry standard, and this contract will renew automatically unless you provide the factoring company either 60 or 90 days notice.

 

What's Your Fee Structure?

 

The fee structure may vary depending on both the factoring company involved and your industry. Some factoring companies charge a flat fee, which is calculated as a percentage of the total value of the invoice. On the other hand, other factoring companies charge additional fees to cover costs associated with doing business, such as money transfers, software, and so on. Ensure that the factoring company you're considering working with is completely upfront and transparent with you about its terms and fees.

 

Are You Able to Offer Both Recourse and Non Recourse Factoring?

 

Recourse factoring:

 

Recourse factoring is less expensive than non recourse factoring. With recourse factoring, you (being the client) are ultimately responsible if the factoring company is unable to collect on your customers' invoices. However, you're not necessarily required to pay the debt out of pocket if you have a recourse agreement and the customer defaults on payment. It may be that the factoring company will withhold a portion of future cash payments or payments held in reserve, with the money being placed in an escrow account until such time as the debt has been paid.

 

Non recourse factoring:

 

When you have a non recourse factoring agreement, the credit risk for the collection of customers' invoices lies with the factoring company.Therefore, we believe it's to your advantage to use a factoring company that offers both recourse and non recourse factoring, simply because you may find that some of your customers are more suitable for recourse factoring than others. In addition, you need a factoring company with a strong credit team because they can work with you to ensure you're dealing with good customers: to a certain degree this will relieve some of the pressure of being responsible for bad debt.

 

How Long Has the Factoring Company Been in Business?

 

With the marketplace becoming increasingly competitive, today we're seeing the creation of more and more factoring companies. However, many of these companies are recent start ups, with limited industry experience. Make sure you research the factoring company's history prior to entering into any factoring agreement: also research its background into providing financial services in your specific industry.

 

Do You Have the Capital to Grow with Me?

 

The fact that there's no limit to the level of financing is the major advantage factoring has over traditional bank lending. As your company continues to grow, so too should the funding of invoices grow with you. Do your research and learn as much as possible about your potential factoring company's client base and their capital structure.

 

Does this factoring company have a limit to the number of debtors it takes on? What's a typical account size? What's the factoring volume of their largest client? You'll probably find that factoring companies who have been serving your industry for many years will have greater capacity to finance your company as it continues to grow.

 

Is There Anything Else You Can Do for Me?

 

Obviously, factoring is more expensive than a conventional bank loan, and this is partly due to the back office services that your factoring company is able to provide. Besides collections and financing, many factoring companies will evaluate companies in your industry and provide credit information. Therefore, when looking for a factoring company for your business, make sure the one you choose offers additional services and products that can assist you in making good business decisions.

 

How Do We Start Factoring?

 

Fortunately, factoring companies are not unduly concerned about your balance sheet before they decide to work with you, unlike banks. However, they do have a process to follow when selecting new clients, so be sure you understand what the factoring company is looking for when it's considering you as a client. Are they looking at your credit ratings and/or your customers' payment histories?

 

Are they looking at your personal credit score?

 

In many cases a company will start factoring because it's looking for a quick injection of cash, so you need to know how many days the factoring company will take to review and process your application.

 

 

 

 

 

Gainesville Factoring Companies Articles

The Advantages of Trucking Factoring for Trucking Companies

 

Around the country, many owners of small trucking companies are running into the same problems when trying to expand their business. While the trucking business can be quite lucrative, it can take many weeks or even months to finally get paid on hauling invoices. This puts trucking companies in a real bind by having to play catch-up while trying to pay bills and salaries of their drivers.

 

We caught up with Jason Kind, an owner of a small trucking business that he created just a few years ago. Like many trucking owners, Jason was trying to expand his company to meet the needs of his clients, but was running into money issues that were holding him back. We asked him about his situation, the challenges he faced and how Trucking factoring played a real role in helping his company to expand without being burdened by paying back high interest loans.

 

Jason, it's good to have you with us.

 

Jason Kind: "Thanks, I appreciate being here."

 

Tell me a little about your trucking company and how it got started.

 

JK: "I had been driving trucks for years when in 2011 I decided to start my own trucking business. I went through the loan process, purchased a couple of trucks and got started. At first, it was really exciting because I had made a few connections as a driver and I picked up some early business. It seemed like everything was starting to snowball as I was getting requests from other businesses, but I was running into a cash problem."

 

It seems rather strange that being successful was causing you to be short on cash?

 

JK: "I know. You see in the trucking business we charge invoices which means that it could take weeks or even months before the cash would roll in. A typical invoice takes anywhere from 45 to 60 days before the payment comes through. Here I was getting offers from other businesses and I didn't have the cash on hand to buy trucks and hire drivers."

 

So, what did you do?

 

JK: I'll admit I was at my wit's end because I thought by the time I had the cash to expand that the interest would dry up first. I didn't want to take out another loan because I would just be putting off that debt until later and I had nothing to sell or any additional way to make more money. It was around that time when I heard from one of my friends in the trucking business about Trucking factoring."

 

What exactly is Trucking factoring?

 

JK: "Well, Trucking factoring is a way for trucking companies like mine to get paid quickly for the loads we are hauling. Instead of having to wait weeks or even months sometimes to get paid for hauling, Trucking factoring lets us get money right away for the work that we've done."

 

How does Trucking factoring work?

 

JK: "Well, there are companies out there who are willing to purchase the invoices that trucking companies like mine get when we perform a job. I managed to find a good, reputable company that actually purchases the invoices we get after performing a job along with other bills that we charge in our business. In return, they pay us cash that I not only use to cover my payroll, fuel costs and expenses, but I was able to put back enough money to purchase another truck a lot more quickly than if I had simply waited for the invoices to be paid."

 

It seems like you stumbled on a pretty good deal when it comes to Trucking factoring. Are there any other benefits that you've enjoyed by using this service?

 

JK: You bet, because the invoices act as the means to pay the company. It is not a loan where I have to pay back any money. The Trucking factoring company simply takes a very small percentage off each invoice or bill as their fee and I get the rest in cash right away. It's really worked out for me because not only was I able to get the cash needed to expand my business I was able to pay off my original loan a lot more quickly as well.

 

In fact, I was able to leap onto new business offers more quickly because the Trucking factoring allowed me to start purchasing new trucks and hire drivers months before I could even consider doing that simply waiting on the invoices.

 

This Trucking factoring sounds almost too good to be true, surely there must be a catch somewhere?

 

JK: I'll admit, I was a little skeptical at first, but it's all pretty straightforward. The Trucking factoring company I use didn't even charge me a sign up fee nor did they sign me to any long term contract. I just took a few minutes with them to set everything up and when I turn in an invoice, they pay me cash right on the spot.

 

You said you didn't have to sign any long term contracts. Are there a minimum number of invoices or amounts that you have to turn in each month?

 

JK: Actually, no. When I first started with them I was turning in practically all of my invoices so I could generate some cash up front. Now, when I need some cash to pay off bills or make quick purchases, I go to the company with my invoices. Some months I've turned in quite a few invoices, other months not so much.

 

It really sounds like you found a great deal in Trucking factoring?

 

JK: You bet. I have even used their fuel advances and discount cards to help me save money which really helped out in the first year of my business. I've had other trucking owners call me up and ask me how I was able to expand my company as fast as I did. I tell them all the same thing, if you have invoices, then Trucking factoring is the way to get fast cash without having to take out loans or put yourself in a deeper hole.

 

Jason's business continues to grow and Trucking factoring was a big reason why he was able to expand so rapidly. If your trucking business is short of needed cash with invoices that have yet to be paid, then you should consider Trucking factoring as a way to put money into your hands right away.

 

 

 

 

 

 

Gainesville Factoring Companies Articles

Explaining 'Factoring'

 

A 'Factor' is a third party commercial financial company who purchases the Accounts Receivable from businesses: this transaction is known as 'Factoring'. Factoring exists so that businesses can receive a quick injection of cash, as opposed to waiting the 60 or 90 days for customers to pay their invoices. Factoring is also known as Accounts Receivable Financing, and Invoice Factoring.

 

The majority of factoring companies purchase invoices and advance money to the business within 24 hours; however, the nature and terms of factoring can (and do) differ among financial service providers and industries. Depending on your customers' credit histories, your industry, and other specific criteria, the advance rate on your invoices can range from 80% to as high as 95%. The factoring company not only collects on your invoices; it also offers back office support to your business.Once the factoring company has collected on your customer's invoice,you'll be paid the balance of the invoice - less the factor's fee for assuming the risk. The primary benefit of factoring is that businesses no longer need to wait anywhere between one and three months for a customer to pay their accounts: they now have access to cash in hand so they can operate and grow their business.The Advantages of Factoring

 

There are a few reasons why factoring has become an invaluable financial tool for many businesses, including start ups. As mentioned above, the main benefit is that businesses can now receive a quick boost to their cash flow because factoring companies, in general, will provide cash on accounts receivable within 24 hours. This resolves the problems businesses experience with short term cash flow, and in many ways this injection of cash can help to grow a business. Besides handling your customer collections, factoring companies can also evaluate your customers' payment and credit histories.Other benefits of factoring include:

 

' It can be customized to a business's needs and managed to ensure that capital is available when it's needed;
' It's not based on your own business or credit history: it's based on the quality of your customers' credit;
' It's not based on your company's net worth: it provides a line of credit based on sales;
' There's no limit to the amount of financing, unlike conventional bank loans;
' This financing will not show up as a debt on your balance sheet, because it's not a loan.
Who Uses Factoring?

 

Companies of all different sizes, including start ups, use factoring; and today factoring has become common business practice across many industries. Factoring is now widely used in the transportation industry, including manufacturing, textiles, trucking, oilfield services, wholesale and distribution, and staffing agencies. Interestingly, factoring receivables is practiced in many countries around the world and has a long history of success.

 

Can I Factor? My Company's New, with No Financial History

 

Yes, you can! In fact, factoring has become an excellent tool for start up companies because no company credit history or balance sheet is required. It's not really your company's finances that the factoring company is concerned with; they'll base their financing on your customers' payment histories and credit scores.

 

What Percentage of My Invoices Should I Factor?

 

The answer to this question really depends on the unique needs of your business. Some companies only factor invoices for customers who typically take a long time to pay, while others factor all their invoices. The receivables that a company can factor range anywhere from a few thousand dollars to millions of dollars each and every month.

 

What's the Difference between Factoring and a Bank Loan?

 

' The difference between factoring and a bank loan is that you're not assuming any debt with factoring because it's not a loan;
' With factoring, there's no emphasis on your balance sheet - it's all on your customer's invoices;
' In addition, a bank loan is typically one lump sum, whereas factoring provides a steady flow of funds;
' Factoring companies can also help improve your company's balance sheet by assisting with your credit and collection functions;
' A bank loan adds to your debt, whereas factoring converts receivables (an asset) into cash (another asset);
' And of course, bank loans can be very difficult to get because they're limited by your balance sheet.
How Do You Start the Factoring Process?

 

The factoring process can be very simple to set up. The customer will be asked to complete a short application form, and may be required to follow up with other reports and documents.

 

Recourse and Non Recourse Factoring: What's the Difference?

 

' With Recourse factoring the client is ultimately responsibility for the payment of the invoice; whereas
' With Non Recourse factoring, the factoring company accepts responsibility for the risk of collecting the invoice.It's important to note that some factoring companies over offer both types of factoring - recourse and non recourse.

 

What Are the Contract Terms and Fees Applicable with Factoring?

 

There are different fee structures with different factoring companies: some factors charge an overall factoring fee which is determined by the creditworthiness of your customers and the monthly volume of invoices; while others charge additional fees to cover shipping, money transfers, and other costs associated with doing business. Before signing with any factoring company make sure you understand the fees and terms applicable to your contract. Also note that most factoring contacts are renewed annually.

 

Do I Need Credit Insurance on Debtors?

 

Insurance is not typically required, but in specific circumstances it may be.

 

 

 

 

 

Gainesville Factoring Companies Articles

Oilfield Services Factoring Services

 

Running a company in the oilfield services industry is no easy business, especially with payrolls to meet, equipment to purchase and deadlines that must be met. The sheer complexity of combining the geological research and modeling, imaging and exploration and finally the drilling to see whether oil is really present can take a lot of investment before any payoff can be seen.

 

For those who own a Frac Sand Hauler for example, the efforts that must be put in to start such as business can be considerable. But arguably the biggest challenge is paying the expenses as the invoices come in. A Frac Sand Hauler often has expenses that must be met immediately, but their invoices can take up to 60 days before they see the money.

 

What follows is an interview with Ray McClerand, a man who owns a Frac Sand Hauler business and ran into the same difficulties that many new companies of his type face. How Ray overcome some of the challenges in paying his bills through oil service factoring are explained in the interview.

 

"Welcome Ray, I'd like to know first why you decided to start up a Frac Sand Hauler company and how you prepared for the challenges it created."

 

Ray McClerand (RM): "I've been in the oil business for the past 15 years or so working on different jobs from roughneck to foreman to deskwork for different companies. A few years ago I saw the potential of having a Frac Sand Hauler business in this area and got together with a couple of partners to create a company. We sat down, went over the details and decided that this would be a real good time to build a business that was serving a particular need in this industry."

 

"So, I take it you created a business plan and took out the appropriate loans in order to purchase the equipment and hire the personnel necessary to get your company started?"

 

RM: "Exactly. Because I had been around this business for a while, I understood what was needed in terms of personnel and equipment. Plus, I had some contacts with others in the business that needed the type of services that a Frac Sand Hauler provides, so I felt that there was some real potential to make a profitable business work."

 

"How did it go over the first six months or so?"

 

RM: "At first, we were really thriving as my contacts had lined up some business my way. Our loans covered the first six months or so of operations and we were doing quite well with the business we had. My partners and I were certainly happy and everything was going good when something really strange happened."

 

"Could you elaborate on what you mean by "strange"?

 

RM: "Yes, after the first five months or so I started getting requests to have our company work with several other businesses in the area. This would mean having to expand our company through buying new equipment and hiring more people. But we did not have the cash on hand to make such a move. We were getting invoices from the businesses that we worked with, but it was taking up to 2 full months before we actually got the cash."

 

"So, you were making enough money to expand, but you didn't have it on hand because of the invoice system?"

 

RM: "You got it. Add to that our initial money from the loan was running out and we needed to start paying it back as well. I knew that if we didn't expand and accept the new business that others would step in and we would lose that money. So, we were in a real pickle until I heard about oil service factoring companies."

 

"Tell us a bit about oil service factoring and how it helped you out?"

 

RM: "Well, one of my partners had heard about factoring companies, so we checked it out and decided to go with one that was best suited for our needs. A factoring company buys our invoices with cash so we have money on hand to pay our bills and do what we need accomplished immediately. The factoring company then collects the money from the invoices when they become due. It's really been a win-win for what we do."

 

"That's interesting. I wonder if you could you explain a little further just how factoring has helped your company?"

 

RM: "Sure, instead of having to wait up to 60 days before we could collect on the invoices, we were able to have the cash on hand immediately to purchase some new equipment and hire some more people to expand our business. This meant that we could accept the new offers that other businesses were providing for us and not having to pass. I cannot say enough about how factoring really benefitted us when it came to expanding our business."

 

"So, it seems like factoring really paid off for you. Do you still use factoring today?"

 

RM: "Yes we do. Although for the most part we still cash our own invoices, whenever we need money quickly so we can buy some new equipment or expand our business a little further, we go back to the factoring company and cash in our upcoming invoices. It really has worked wonders for our company."

 

"Tell me, what would have happened if factoring was not an option?"

 

RM: Frankly, I don't know how we could be in the position we are today without factoring. In this business, you have to take advantage of new opportunities quickly because there are other companies out there who will step in if you don't. Basically, I don't think we would be anywhere near the company we are today if it had not been for factoring.

 

There is little doubt that Ray's company would not be where it was without oil service factoring that allowed him to expand his company when he needed. For those in the oil industry, having your invoices cashed immediately by factoring companies allows greater flexibility so you can grow your business a lot more quickly and take advantage of opportunities.

 

 

 

 

You Can Find More Information at  https://fredcoutts.com
and at www.account-receivable.org/

Call Us Today at: 1-888-239-9162

 

Watch our Factoring Company Video below to see how we work for you.

 

 


 

Get MONEY NOW for your outstanding invoices.

 

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