Articles & News About Jobs & Employment

Invoice Factopring: A Little Known Way to get Working Capital For your Business

Every day many business owners hit a wall. That wall prevents them from growing their business, or at least, severely limits the speed at which they can grow their companies. Sometimes, and especially for small and mid size businesses, the wall appears to be insurmountable. That wall is lack of working capital. Let?s take a look at the most common source of working capital problems: extending payment terms to customers.

There are few things that small business owners hate to hear more than a customer utter the words, ?We?ll be happy to do business with you. However we pay net 45 days?. As is well known, commercial clients like to pay their invoices in 30 to 45 days. As a business owner, you are expected to go through the trouble and expense of delivering your product or service on time? only to then wait 30 to 60 days to get paid.

It does not take a long time before the business has a lot of money tied up in their unpaid invoices ? or accounts receivable. At this point the business may have more money in unpaid invoices than actual cash in the bank. When they reach the breaking point, they hit the wall. They can no longer supply new products until old invoices pay. Sometimes it?s even worse. The business may stop operating until old invoices pay. Payroll is missed. Key suppliers are not paid. Unless this is fixed quickly, the business will certainly face major problems. If you hit the wall, there are two options. Either you step on the brake and stop growing your business, which means your competition gets the contracts, or you blast through the wall using some form of financing. Invoice factoring can help you do just that.

Your unpaid invoices are an asset ? really!

Businesses that hit the wall have a great asset that can be turned into immediate funds. They just don?t know it. This asset is their unpaid invoices from credit worthy clients. Let me give you an example. Let?s say that you have a $10,000 invoice from General Electric payable in 45 days. Do you think GE will pay? Isn?t that invoice almost as good as money? Well, of course. GE is arguably one of the best and most financially stable companies on the planet. Most people would certainly consider that invoice to be ?almost cash?. Unfortunately, banks will seldom provide you any financing that relies on that ?almost cash?. However, there is a solution that relies solely on the power of your unpaid invoices. It is called factoring.

Invoice factoring. Financing your business without debt

Invoice factoring allows you to turn your slow paying invoices from good customers into immediate cash. It?s a very simple transaction in which you trade an invoice ? ?almost cash? ? for actual cash. Basically, the factoring company provides financing solely on the power of your soon to be paid invoices.

Provided that you have good customers, you can repeat this process for every invoice you have, almost indefinitely. If you sell products to good credit worthy customers, a factoring company will gladly buy your invoices. There are no limits, except how much you can sell.

One important thing to know about factoring is that it doesn?t generate debt. The factor does not loan you money for your invoices. It buys them outright from you at a small discount. Since factoring is not a loan, qualifying for it is easy and your financial statements look cleaner. You just need a well-run business and great customers.

Who is a good candidate for factoring?

Factoring is a great resource for companies that have great paying ? albeit slow paying - customers. To work well, the company should have profit margins of at least 15%. However, higher margins of 25% - 50% are more desirable.

Factoring works well for companies that have hit the wall and are turning away new business opportunities because of lack of money. In these instances, factoring will almost always allow you to grow your company immediately and will more than pay for itself.

Factoring works well for almost any industry. Some very successful staffing companies, trucking companies, IT consultancies, construction firms, manufacturers and service providers have used factoring to dramatically grow their businesses.

A sample accounts receivable factoring transaction

Let?s take a look at a sample invoice factoring transaction. This will help you better understand how this financial tool works. Let?s say that you have a company, called Super Services Inc. Super Services sells products to two clients. The clients are Company A and Company B. The factoring would look as follows:

1. Super Services delivers its products to Company A and Company B 2. Super Services sends Company A and Company B an invoice for its products. At the same time, it sends copies of the invoices to factor 3. The factoring company receives the invoices and advances funds to Super Services. Super Services can use the funds to grow the business 4. The factoring company waits to get paid. Once it gets paid, the transaction is settled

As you can see, invoice factoring is a fairly straightforward tool that allows business owners to capitalize on their most precious asset ? their invoices.

Copyright (c) 2006 Commercial Capital LLC. All rights reserved. Article may be reprinted provided it is not changed and includes the resource box with live links.

Invoice Factoring Group ( http://factoring.qlfs.com ) and its small business factoring subsidiary ( http://www.ccapital.net ) can provide you with free factoring quotes. Marco Terry, its president, can be reached at 866 730 1922

Other Article Sites

findabook.com  moneycd.info  a-mortgage.info   about-lemon-laws.info  aboutstudentloans.info
all-about-publishing.info  auctions-articles.info  bestcollege-university.com  bestispconnection.com
biblefolder.com  blogger-website.com  books-used.info  brokers-guide.info  buywindows.info  cable-dsl.info
career-miner.com  carpel-tunnel.info  cashinaflash.info  cashloanreviews.info  casinobell.com  chat-house.info
clearmycredit.info  collegeloantips.info  crones.info  depression-articles.info   dirnic.net  dishguides.info
divers-below.com  expodog.info   financewizz.com  fire-insurance.info  getgood.info  handleit.net   it-idea.info
health-supplies.info  hosting-right.com  insidealert.com  insurance-facts.info  jobs-employment.info
justgood.info  lookgold.net   lowcost-travel.info  money-source.info  myhostzone.info  numisblog.com
peoplesearchfinder.info  pr-articles.info  realeas.com   refinancing-guides.info  spyware-remove.info
telelot.info  the-law.info   toppaid.info  travel-deals.info  travelcorrect.com  wedding-guide-site.com
your-blog.info  your-credit.info

2 Major Reasons to Get a Computer Work at Home Job
It surprises me how many people are still skeptical about putting their computer to work Thousands of people earn work at home incomes via the internet

Job Work From Home On My Computer
In my long quest for a job, work from home on my computer seemed to be the best available option Especially, since I needed to work around the many schedules of my family

Legitimate Work at Home Jobs Career - 4 Amazing Tips to Increase Efficiency
When you have picked one of the many legitimate work at home jobs career and are ready to settle down and make some money, it helps to make your home based business as efficient as possible One of the most important benefits resulting from obtaining legitimate work at home jobs career is the ability to improve income levels through increased efficiency in performing the tasks associated with the jobs

Home Computer Work - 3 Ideas For Home Computer Work Jobs
Surely, many people out there have told you about the wonders of working from home and being your own boss Well, not only are you able to save on transportation costs and have more time to spend with your family, you are also able to do whatever you like, whenever you feel like it

Work From Home - How To Prepare For A Work From Home Job
Surely, you must have already heard about the perks of working from home Not only do you get the opportunity of being with your loved ones, but also the chance of earning good money doing what you like

Legitimate Work At Home Jobs - Become Wealthy Working From Home
It all started when I was franticly going from company to company passing out my resume, needing a job so bad it hurt I had a college degree but could not get hired no matter what for the life of me

4 Legit Work From Home Jobs That Work
Everybody is turning to the internet to work from home and hopefully leave their day job. This means that finding legit work from jobs has become more popular than ever and you can understand why when hundreds of people weekly are quitting their day job and are working out of the comfort of their home.

Work at Home Agent - Job Ideas For a Work at Home Agent
Are you interested in jobs that require you to spend hours on the phone talking to customers If you like personal relations work and have good interpersonal skills, then do consider the opportunity of being a work at home agent

Work At Home Job Versus Work At Home Business
I often hear people complain about how they shouldnt have to pay for a business opportunity because "you wouldnt have to pay to get a job outside the home." It irritates me when I read that. Not because I think you should have to pay for a job - even a work at home position - its because they think that their should be no investment to start up a work at home business.

Being A Work At Home Business Opportunity Seeker And Finding Work From Home Jobs
The problem with work from home jobs is simply that so many people want to have them Because of this, there are lots of people who want to take advantage of people who truly want to be able to have the freedom of a home business

Finding that Work at Home Job - A Job in Itself
The trend of corporate America creating work at home jobs for telecommuters is growing, which is good news for those of you who are looking to do your work in your pajamas every day. Technology has made the work at home job more appealing to both bosses and employees, though it does not mean the trend has hit the mainstream, so a work at home job can still be hard to find.

Legitimate Work From Home Jobs - 4 Important Things to Consider Before Starting This Career Path
When you are selecting legitimate work from home jobs career, money is important, but there are some other factors that should be considered before making the final decision Before beginning even legitimate work from home jobs career, you should think about some of the factors that will help to make your venture succeed or fail

Work at Home Businesses Versus Work at Home Jobs
Is a work at home business better than a work at home job? You bet. Hands down. But each option has pros and cons. It may be that for right now you're just not ready to start a work at home business. Its a big committment. That's OK. But if you're dedicated, smart and willing to work harder than most, settling for a work at home job could be selling yourself short.

Work at Home Data Entry Jobs, Work at Home, Data Entry Jobs
37 Work at Home Data Entry Jobs - The New Age Career Move