The Power of Account Receivable Financing?

Receivables Financing or “invoice factoring“ is a great way to get money for your business. Accounts receivable financing is not a loan; it’s an advance against your client invoices. You are selling your outstanding invoices to a factoring company who then gives you back up to 80% of the invoice value in the form of a loan against those invoices. The remainder due is remitted to you once the invoice is paid. Check this Video that will clearly explain A/R Financing! Receivable Financing is mainly used to generate immediate cash flow for the business selling the accounts receivable. This is a great funding option as it provides an immediate advance of cash to you, leveraging your outstanding invoices. This means as your business grows so does the amount of funding you will qualify for so you can meet increasing cash flow demands. Most major companies including major Fortune 500 companies utilize some form of Accounts Receivable Financing. One of the best benefits of receivable financing is giving your business an increase in working capital without needing to borrow money or tie up your business or personal assets. This boost to your cash flow positively impacts your profitability. You can receive money quickly, typically within 24 hours from approval. This is much faster than if you were trying to collect on the invoices on your own and wait for that money. Prior to purchasing your invoices, a factor conducts a credit analysis on the client you are invoicing to determine their risk or repaying the invoice. You are entitled to the resulting analysis, which is a huge benefit as it...

Building Business Credit.

There is a lot of factors that are important in business credit building. These factors must all be perfect for a creditor to extend your business credit. If you don’t meet one of these requirements, you could be denied and the creditor will never tell you why. First, make sure you have the proper state and federal licenses you need for your business. If you are required to be licenses, you need your license before you apply. You will also want to make sure you have your business bank account setup. Merchants will not extend you credit unless you have a business bank account, and the name on the account is the same as on the corporation papers. You will need a physical location or virtual office for your business also. You can be approved for much more credit if you have a credible business with a real location. UPS and PO boxes won’t work, you will need a real physical address. Another factor merchants look at before issuing credit is whether you have a business website and email setup. Again, they are looking for a credible business. Most legitimate businesses today have their own website and professional email addresses. Banks will be looking for those before issuing credit. You will also want to insure your business has a real phone number that is a land-line, not a cellular phone number. And you will want to insure you have that phone number listed with 411. Some merchants will do a 411 check and if your phone number is not registered, you won’t be approved. There are many factors to insuring you...

A Few Words About Vendor Credit…

Vendor credit is a very useful type of unsecured credit for businesses, both for managing cash flow and for building credit. Most vendor credit accounts have terms of 7, 10, 15, or 30 days. Some longer terms do exist, and there are even revolving vendor credit accounts, that don’t have to be paid in full, each month. The key thing to understand about vendor credit accounts is that you can never have too many of them. “The more, the merrier.” You should also understand that vendor credit accounts are essential in building a good Business Credit Profile. They are good because they are: Easy to get. Easy to use. Usually “free”. They aren’t complicated. Most vendor credit accounts, such as Net 30 accounts, do not charge any interest or fees during the 30 days. Late fees may apply. On the flip side, many vendor credit accounts offer DISCOUNTS if you pay early. Instead of costing you money, they could actually save you. Terms such as “Net 30, 2% 10” would mean that if you pay the invoice within 10 days you can deduct 2%. Because vendor credit accounts are also easy to get and simple to use, makes these accounts ideal tools for businesses to build business credit. Some accounts are, of course, easier to get than others, and because of this, you should always start with certain “easy” starter accounts and then add on additional vendor credit accounts once your “core” accounts are...