Business Financing For Food Service Companies

Posted on December 8, 2011 by Administrator

Food service companies can be very dynamic and complex operations. Whether they handle catering or full fledged facilities management one thing is for certain – to be stressful the business needs to run like clockwork. However, it is not uncommon for food service companies to run into cash flow problems. Cash flow problems stem from the fact that food service companies have a number of expenses that have to be paid regularly, such as payroll, suppliers and cleaning services On the other hand, commercial and institutional clients pay their invoices in 30 to 60 days. Basically they have immediate expenses but slow revenues.

If the company has a reasonable cash reserve, having immediate regular expenses, coupled with slow revenues will not be a problem. Unfortunately, few small or midsize food service companies have a cash reserve. One way to address this problem is to use business financing to cover expenses, while waiting to get paid.

Getting business financing can be a challenge on it’s own. Most institutions only provide business loans to companies that meet very strict criteria. They must have impeccable financial statements, solid collateral and be able to show years of profitable operations. Not every small or midsize food service company can meet this criteria. However, a business loan may not necessarily be the best solution for this cash flow problem. For many, the better solution may be to use invoice financing.

Invoice financing accelerates your revenues due from slow paying invoices, providing the cash flow you need to cover your expenses and grow the company. This eliminates the pressures created by slow paying customers and allows the owners to focus on managing and growing the firm. Most invoice financing transactions are structured through financial intermediaries that advance funds against your slow paying invoices and then wait until your customers pay to settled the account.

Invoice financing lines can be easier to get than a conventional small business loan because financing companies look at your invoices as your strongest collateral. To qualify, your customers need to have good commercial credit and your invoices need to be free of liens or encumbrances. This makes invoice financing an ideal solution for small and midsized food services companies that have great potential but are being dragged down by slow paying customers.

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We offer business loan financing in Arkansas and in all other states.

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Business Financing For Distributors and Wholesalers

Posted on November 30, 2011 by Administrator

For many small wholesalers and distributors, managing cash flow so that there is always enough cash to cover expenses can be very difficult. Suppliers usually need to be paid quickly, unless you have good credit terms with them. On the other hand, large customers pay their invoices slowly. Quick expenses and slow revenues can wreck havoc in your company unless the company has a substantial cash reserve. And actually, few distributors or wholesalers have any substantial reserves.

One way to address this problem is to try and slow expenses down while quickening invoice payments. You can do this by negotiating longer payment terms with your suppliers and by offering quick payment discounts to your customers. This strategy may work for some, but not for all because it is not always consistent. For many, a better solution may be to use business financing to bridge the gap between paying suppliers and collecting from customers.

One solution that has been gaining traction in recent years is invoice financing. Invoice financing can accelerate your revenues due from slow paying invoices, providing the funds you need to pay suppliers and other critical expenses. Invoice financing relieves you of the worry of having to wait for slow paying customers and provides predictable cash flow.

One important advantage of invoice financing is that it’s easier to obtain than a small business loan. The most important requirements are that your customers need to have good commercial credit and your invoices need to be unencumbered by any liens or judgements.

A major benefit of invoice financing is it’s flexibility. As opposed to a business loan that is for a fixed amount, your invoice financing line is directly and dynamically tied to your sales. This means that the line can easily increase to accommodate growth if your customers have solid credit.  This makes it an ideal solution for distributors and wholesalers who have solid potential but have cash flow problems because they can’t afford to wait up to 60 days to get paid by customers.

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We offer business loan financing in Arizona and in all states.

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Business Financing For Consulting Companies

Posted on November 29, 2011 by Administrator

Finding business financing for a consulting company can be a challenge. Most financial institutions tend to offer their products to companies that have strong assets that can be pledged as collateral – such as real estate, machinery, etc. Most consulting companies don’t have those types of assets, rather their assets are their talent pool of employees. Regardless, many small consulting companies commonly run into problems that could easily be fixed with proper access to business financing.

The most common cash flow problem that consulting companies encounter is caused by slow paying customers. Most consulting companies have to give their customers 30 to 60 days to pay their invoices. But this creates a problem if the company does not have the needed cash reserve to cover expenses while waiting to get paid. This can create a situation where the company could miss payroll – one of the most critical expenses for a consulting company.

One simple solution to this problem is to accelerate the revenues due from invoices by using invoice financing. This solution provides an advance against your invoices, which you can use to meet payroll and other critical expenses. And as opposed to a conventional business loan, invoice financing is relatively easy to obtain. The most important requirements include having customers with good commercial credit and having no tax or legal problems.

One additional benefit of invoice financing is that it adapts fairly well to the changing revenues of a consulting firm. As opposed to a small business loan with is fixed, the invoice financing line is tied directly to your sales. This means that the line can grow with your business, provided you sell your consulting services to companies with a solid commercial credit rating.

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Learn about business loan financing in Alaska

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Business Financing For Tool and Die Companies

Posted on November 23, 2011 by Administrator

Most companies in the tool and die business are facing economic challenges. On one hand they have customers that demand products at low prices, while insisting on paying their invoices on 30 to 60 days. On the other hand you have recurring company expenses – payroll, rent, suppliers and machine parts. The combination of razor thin margins, slow payments and immediate expenses can be difficult to manage for companies that don’t have adequate cash reserves.

Many tool and die companies address this issue by resorting to juggling expenses and asking for quick payments. These strategies can work, to a point. Ultimately, your cash flow still ends up being controlled by your customers and suppliers who can opt out. For many, a better to solution is to add business financing to their strategy.

However, for many companies, conventional business financing solutions like a business loan may not be an option. Most financial institutions have stringent requirements and will only provide a business loan (or line of credit) to companies that have substantial collateral, impeccable financials and a long track record of profits. This rules will usually disqualify most small or medium sized tool and die companies. However, a business loan is not necessarily the only – or the best – option to address cash flow problems from slow paying customers.

Invoice financing may be a better solution for many companies. Invoice financing solves this problem by financing your invoices from slow paying customers. This relieves you from having to wait for slow payments and provides the funds your tool and die company needs to pay suppliers, employees and other operational expenses. The transaction uses your invoices from credit worthy customers as collateral and is settled once your customers pay their invoices in full.

One major advantage of invoice financing over a small business loan is that it’s easier to obtain. The most important requirement is that your tool and die company needs to work with companies that have good commercial credit. Aside from that, your company needs to be free and clear of legal and taxation problems.

Invoice financing is an ideal solution for tool and die companies that have cash flow problems due to slow paying customers, but also have great potential.

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Learn more about us – we can offer business financing in Alabama.

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Business Financing For Security Guard Companies

Posted on November 18, 2011 by Administrator

Security companies, much like temporary staffing agencies, are very cash flow intensive businesses. This is specifically because a large part of their expenses are related to their payroll costs. Most security guard companies pay their employees every week – or at the most every two weeks. And for many, payroll is their biggest and most challenging expense.

Having this regular payroll liability can create a challenge for small security guard companies since most customers pays their invoices in 30 to 60 days. This creates a combination of quick expenses and slow income. This won’t be a problem if the company has sufficient cash reserves to cover it’s expenses. However, if it doesn’t have cash reserves, this could become a serious problem. Especially if some payments get delayed.

One way to solve this problem is to use business financing to create a financial buffer, that will allow you to meet expenses while waiting to get paid. However, most conventional business financing programs are very difficult to get. Most institutions have stringent requirements and will only provide a business loan (or line of credit) to security companies that meet very strict criteria: spotless financial statements, good track record and owners with substantial collateral. In reality, few security companies can meet this criteria.

One alternative that has been gaining popularity is invoice financing – a solution that is designed to solve cash flow problems created by slow paying customers. Invoice financing provides you with an advance on your slow paying invoices, accelerating your revenues and providing you with the liquidity you need to meet your operating expenses.

As opposed to a small business loan, qualifying for invoice financing is relatively easy. The most important requirement is that your customers need to have good commercial credit. This is important because you are using their paying power as collateral for the funding your security agency will be getting. Aside from this, it’s also important that your business be free of tax and legal problems.

Invoice financing is one of the few funding solutions that allows you to leverage the credit of your customers – this makes it an ideal solution for security guard companies whose biggest assets are their customer relationships.

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Business Financing For Utility Contractors

Posted on November 17, 2011 by Administrator

Utility contracting businesses can be very cash flow intensive. On one hand, there are expenses that need to be met constantly, such as payroll, supplies, equipment, rent and so on. On the other hand, revenues are usually slowed down by the fact that most clients pay invoices pay in 30 to 60 days. Having immediate expenses and delayed revenues can create a problem if your company does not have a cash reserve that can be used to cover operational expenses.

One simple way to address this problem is to request a quick payment from your customers. For example, many utility contractors will offer a 2% discount if the customer (or general contractor) pays the invoice in 10 days. This can work if your customer is willing to participate and pay early. But ultimately, it’s their choice. For many, a better solution may be to use business financing to cover this gap between expenses and income – at least until your company is able to build a cash reserve.

However, getting a business loan (or line of credit) can be challenging in the current environment. Most lending institutions are conservative by nature and will only lend money to companies that have substantial assets, plenty of collateral and impeccable financial statements. Needless to say, few small/medium sized utility contractors can qualify for these products.

For many, a better solution may be invoice financing. Invoice financing can accelerate your revenues due from slow paying customers. This provides you with the funds you need to meet expenses and grow your business. The premise behind invoice financing is simple.  A finance company advances you funds using your invoices from slow (but credit worthy) customers as collateral. The transaction closes once your customer pays the invoice in full. And since the financing line is tied to your revenues, your funding line can grow alongside your sales, provided your customers have good commercial credit.

The biggest advantage of invoice financing is that it’s substantially easier to obtain than a small business loan. The biggest requirement is that your customers need to have solid credit. It’s OK if they pay slowly, provided that they pay. Aside from that, your utility contracting company needs to be clear of any legal or tax problems.

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Business Financing For Construction Supply Companies

Posted on November 9, 2011 by Administrator

Most companies in the construction industry have endured challenging times due to the real estate bubble and subsequent implosion. For the most part, construction grew to a halt leaving many construction supply companies with limited sales options. Those that did have sales found that customers would pay their invoices slowly – sometimes taking as long as 60 or even 70 days to pay invoices.

For small construction supply companies, waiting up to 70 days to get paid caused substantial cash flow problems. Unless your company had cash reserves, paying your own suppliers on time was difficult. Likewise, meeting payroll was difficult. And finding business financing in this environment was next to impossible. But for many, business financing was the only solution to survive and to eventually thrive.

For many construction supply companies getting a business loan or line of credit in not an option – most banks are not lending to the industry at this time. However there is a solution that can help minimize the problems that are created by slow paying customers – it’s called invoice financing. Furthermore, in many instances, invoice financing can be more effective that a business loan at solving cash flow problems due to slow paying customers.

Invoice financing offers a simple proposition. Instead of waiting up to 80 days to get paid by your clients, an invoice financing company advances funds using your invoices as collateral. The transaction then settles once your customer actually pays for the goods. However, for invoice financing to work, your customers need to have good commercial credit. It’s OK if they pay slowly – provided they have a track record of paying.

Invoice financing is usually easier to obtain than a small business loan. To qualify, your company usually has to meet three criteria:

  1. Your customers need to have good commercial credit
  2. Your company must be free of tax problems
  3. Your company must be free of legal problems

One important advantage of invoice financing is that it’s tied to your sales activity. This means that it will grow with your sales, provided your customers have good commercial credit. This makes invoice financing an ideal solution for construction supply companies that have good potential but have customers that are paying slowly.

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Business Financing For Automotive Supply Companies

Posted on November 8, 2011 by Administrator

Although the automotive industry has been through some turmoil in recent years, things are starting to get back to normal as the industry recovers and sales increase. However, many automotive supply companies still have a number of cash flow issues – in part because most of their clients pay their invoices in up to 90 days. This can create serious problems for the company, as it tries to juggle slow income and immediate expenses. Ultimately, this affects the company and all their downstream suppliers as well.

One simple way to address this problem is to ask customers for quick payments offering the common 2% discount for a net 10 payment. And while this strategy can work, it has one flaw. It leaves your company’s cash flow in the hands of your customer who can chose to opt out of quick payments at any time.

Another way to solve this problem is to use business financing to handle expenses while waiting for payment. However, finding conventional business financing, such as a business loan or line of credit, in the current environment is very difficult. Most banks will only provide business loans to companies that have a track record of pristine income statements and solid balance sheets. Unfortunately, this will leave many companies in the industry out of the running.

There is an alternative that has been gaining popularity as an alternative to a conventional business loan – it’s called invoice financing. Invoice financing solves the cash flow problem created by slow paying customers by funding your invoices for completed work. Basically a financial intermediary advances your invoice payment and holds the invoice as collateral. The transaction is closed once the end customer pays the invoice through normal payment terms.

One advantage of invoice financing is that it’s easier to obtain than a conventional small business loan. Most invoice financing plans only require that your company be free of legal and tax problems and that you do business with commercially credit worthy customers. This can make it an ideal solution for small and midsize auto supply companies that have good potential but have cash flow problems due to slow paying customers.

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Small Business Loan Alternative

Posted on August 26, 2011 by Administrator

Obtaining a small business loan in the current economic environment is very challenging. Most financing institutions are imposing constraints on the business loans they provide – they are only funding companies that have an impeccable track record, have solid assets and can present flawless financial statements. The problem with this is that after the protracted recession and credit crunch – few small businesses meet this criteria. Most won’t be able to get a small business loan. And given the current environment, small businesses need some access to financing or credit if they are going to grow.

There are other business financing alternatives to conventional small business loans – and many have been gaining traction during the recent recession. One of such alternatives is invoice financing.  Invoice financing is a solution that was created to help companies with a specific type of cash flow problem. It helps companies that have problems created by the combination of slow paying customers and suppliers that demand quick payments. This usually leaves the business owner in the middle. Some owners cope by juggling payments – when they can. And if they can’t juggle payments successfully, their business usually will suffer.

Invoice financing provides an upfront payment, paid by a financial company, for your slow paying invoices. You get quick funds for your business, while the financing company holds the invoice and waits for payment. The transaction concludes once the invoice is paid and all monies are settled. Many companies use invoice financing on an ongoing basis to ensure they have smooth cash flow.

As opposed to a business loan, invoice financing is relatively easy to obtain. The most important requirement is that your business must invoice credit worthy customers, as your invoices are the most important collateral for the finance company. Aside from that, your invoices need to be free from tax and legal encumbrances. This makes invoice financing a great solution for small businesses that have solid clients and good potential for growth.

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Emergency Business Financing

Posted on August 25, 2011 by Administrator

We are firm believers that the best way to prepare for a financial emergency is to prevent it in the first place. Preventing one usually involves planning, preparation and actually having the resources to keep a cash reserve to operate the company during tough times. Although we believe firmly in this approach – it has two limitations. The first one is that we have been in an challenging economic environment for a long time – making it difficult to accumulate reserves. And second, it’s impossible to plan for everything.

For some, it may make sense to have an emergency source of business financing that can help smooth things out during tough times. However, trying to get business financing during a cash flow emergency is an effort in futility. Few financial institutions are willing to finance companies during an emergency. A better approach is to try and line up the financing before the emergency hits.

For most companies, cash flow emergencies happen because customers pay their invoices slowly. On average, most invoices get paid within 45 days. However, as an effect of the recession and credit crunch, many companies are now taking longer to pay their invoices. For example, many companies that paid in net-45 are now paying in net-60 days, which affects small companies and creates serious cash flow problems. This problem can be solved – many times easily – using the right type of financing (hint: it’s not a business loan).

For many companies that have cash flow problems (due to slow paying customers) the best solution is to use invoice financing. Invoice financing provides upfront funding for slow paying invoices, which gives you the liquidity you need to operate your company without having to wait for the invoice to pay. The invoice financing company holds the invoice and then settles the transaction with you once the invoice is paid in full.

One advantage of invoice financing is that it’s easier to obtain than a small business loan. The most important requirement to qualify is to have invoices from commercially credit worthy customers. Aside from that, your invoices need to be free of legal or tax encumbrances.

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How Finance A Pallet Manufacturing And Supply Company

Posted on August 23, 2011 by Administrator

Pallet manufacturers and suppliers, like most industrial manufacturers, are used to facing  the cash flow constraints that are created when you have suppliers that demand quick payments, coupled with customers that want to pay invoices in net 30 to net 60 days. But it’s a sign of the times, as suppliers and customers are doing what they can to protect their cash flow.

This is usually not a problem for larger suppliers and manufacturers of pallets who have business financing or large cash reserves. However, this can present a serious problem for small and medium sized companies that don’t have financing or have minimal cash reserves.

Most business owners deal with this situation by juggling supplier payments – or trying to stretch customer payment terms. Additionally, many will try to give payment incentives to their customers, such as the conventional 2% discount if an invoice is paid in net 10 terms. Although both methods can help – neither solves the problem. For many, the better solution is to use business financing.

The challenge is that getting a business loan in this environment is very difficult. Most institutions have toughen their approval requirements. To qualify for a loan most, companies need strong financial statements, substantial assets for collateral and a solid track record. The problem is that few companies that have survived the recession meet this criteria.

There is one solution that is usually better than a small business loan at dealing with cash flow problems created by slow paying customers – it’s called invoice financing.  Invoice financing solves this problem by accelerating customer payments. This provides the needed liquidity and enables the pallet manufacturer and wholesaler to pay suppliers on time.

One advantage of invoice financing is that it;’s relatively easier to obtain than other financial products. To qualify, the company’s needs to have customers with good commercial credit. Additionally, the accounts receivable cannot be encumbered by prior loans, back taxes or lawsuits. This makes invoice financing an ideal solution for small and midsized pallet manufacturers.

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Should You Offer Net 30 Terms To Your Customers?

Posted on August 22, 2011 by Administrator

In most commercial sales – whether you sell products or services – customers expect that you will give them net 30 to net 60 terms to pay their invoices. In other words, you deliver today, and then wait 30 to 60 days to get paid. Now, a sale is not really a sale until you get paid. So that leads to the question – who should you offer net 30 terms to?

This is a very difficult question to answer. If you set a very tight credit policy and extend little credit, your sales will decline. On the other hand, of you have a lax policy and offer credit to everyone, your profits will decline (due to non payments). Ideally, if you can afford it, you should offer credit to those that deserve it and you should deny it to those that don’t deserve it.

The easiest way to determine a company’s credit worthiness is to get a commercial credit report. As opposed to personal credit reports, commercial credit reports are available to anyone. You just have to buy it. Two well known providers are Dun and Bradstreet and Experian Business Reports. These two services provide quality credit reports that are well accepted by the industry.

Both services offer reports of different complexity and pricing. As a rule of thumb, many companies use simple/cheap reports for small sales – and more complex (and expensive reports) for larger sales. For large sales, it’s not a bad idea to get reports from both services since no single service is perfect.

However, if your business has cash flow problems, this whole discussion on credit is probably moot since you probably can’t afford to offer 30 day net terms to customers. One alternative is to use a business financing solution to help your cash flow and enable you to offer 30 day terms. The problem is that obtaining business financing in the current environment is very challenging – especially for small businesses.

Although a business loan may be out of the reach of many business owners – there is a solution that is specifically designed to help companies that need to offer 30 days terms. It’s called invoice financing. This solution provides your company with an upfront discounted payment for your net 30 days invoices to credit worthy companies. This provides you with the cash flow you need to meet your obligations without having to worry about slow paying customers.

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How To Finance a Wholesale Supply Company

Posted on August 16, 2011 by Administrator

Most wholesalers operate as product re-sellers. They stock product from various suppliers and then distribute them to their own customers. It’s very common for wholesale supply companies to have cash flow problems at one point or another due to how their cash flow works. Unless the wholesaler is established, they will need to pay their suppliers at receipt of product – or shortly thereafter. On the other hand, customers will want to pay invoices on net 30 or net 60 terms, especially if they are large company. Having immediate expenses coupled with a slow payback can force wholesalers to use their reserves while waiting for customers to pay. And if those resources run out – the company will have serious problems.

If your company is in this position, you have three possible alternatives. One, you can ask suppliers to give you longer payment terms. Two, you can ask your customers to start paying sooner. And three, you can use business financing to cover the gap. It’s common for companies to try some or all of these alternatives.

One business financing tool that could be used in this scenario is a business loan. The challenge is that business loans are difficult to obtain. They have stringent collateral and financial requirements – and ultimately can take months to set up. This can discourage many business owners from pursuing this avenue. For many, a better alternative is to use invoice financing.

Invoice financing reduces the time it takes you to receive payment for your invoice – usually to just a couple of days. So, instead of waiting up to 60 days to get paid – you get paid in two or three days. It works by using a financial intermediary that advances your company funds based on the value of your invoices. Your company gets an immediate payment while they hold the invoice. The transaction is settled once the customer pays the invoice in full.

One advantage of invoice financing over a small business loan is that invoice financing is easier to obtain and can be setup quickly. Usually the most important requirement to qualify is that your customers need to have good commercial credit. Aside form that, they need to be clear of legal and tax problems. In terms of setup time, most invoice financing facilities can be setup in a week or so.

Invoice financing can be an ideal solution for small and mid sized wholesalers whose biggest problem is that they can afford to wait up 60 days to get paid by customers.

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How to Finance a Commercial Cleaning Company

Posted on August 15, 2011 by Administrator

There is a common belief that starting and running a commercial cleaning company is relatively easy and that it can be done without any business financing. In reality, any commercial cleaning company (aside from a one person company) that plans to grow will require an owner that is good juggling multiple tasks and proficient at managing cash flow.

Managing cash flow can be one of the most difficult jobs for an owner. This is because business owners are faced with a number of expenses that need to be covered immediately – however – they are also faced with customers that want to pay their invoices in 30 to 60 days. This situation forces them to cover expenses from their own savings (or cash reserves) while they wait for customers to pay. For many, this creates an unsustainable situation. However, this is a problem that can easily be solved with the right type of business financing.

Using the right type of business financing, your commercial cleaning company can avoid these cash flow problems and grow. One solution that has been gaining traction recently is invoice financing. It provides the equivalent of a quick payment for your invoice – which gives your cleaning company the necessary funds to cover it’s operational expenses. In turn, this allows you to capitalize on new growth opportunities without having to worry about slow paying customers.

Invoice financing works using a financial intermediary who buys the invoice from your company (at a small discount) for an immediate payment. Your company gets immediate funds while the financial intermediary waits for your invoice to pay. The transaction is settled once your customer pays for the invoice.

One advantage of invoice financing over a business loan is that is much easier to qualify for. The most important requirement to qualify for invoice financing is to have commercial customers who are reliable payers and have good credit. Aside from this, your company needs to be free of tax and legal problems. These easy qualification requirements make invoice financing an ideal solution for small companies that need funding and have good customers.

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How To Finance Self Employment

Posted on August 12, 2011 by Administrator

Most self employed people have problems finding business financing.  A few years ago the self employed could take a line of credit against their house and use it to run their business. But the recent housing market mess has, for the most part, eliminated that option. And their small businesses seldom qualify for a conventional business loan because they lack the size and collateral that banks require.

On the other hand, self employed individuals usually run into common cash flow problems. Those that work with commercial customers have to get used to extending net 30 to net 60 payment terms. On the other hand, they need funds to pay suppliers quickly and to cover their own salaries.Unless they have reserves to cover immediate expenses, their finances will run into trouble. One way to solve this situation is to use an alternative source business financing – called invoice financing.

Invoice financing offers a very simple value proposition. An intermediary company advances you a payment for your net 30/60 invoice. This provides you with the funding you need, while the financing company holds the invoice until your customer pays. Invoice financing enables you to fund operations and grow your business without having to worry about slow paying customers.

One advantage of invoice financing is that is a lot easier to obtain than a small business loan. The most important requirement is that you should do business with credit worthy commercial customers. Aside from that, your business should be free of legal and tax problems. This makes it an ideal solution for self employed individuals who have solid customers and whose main problem is that they cannot afford to wait up to 60 days to get paid by customers.

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Funding Cable TV Installers With Invoice Financing

Posted on July 5, 2011 by Administrator

Most cable providers hire subcontractors to do their installation work. It’s an effective solution that allows cable companies to outsource services, while providing great business opportunities to entrepreneurial minded cable contractors. One thing that cable contractors need to learn quickly is how to manage their cash flow. They have the same basic problem that most businesses have – they have immediate expenses and delayed revenues. They need to pay employees and suppliers quickly, while their customers (cable companies) can take up to 45 days or more to pays their invoices.

This requires careful budgeting of your money since you will need to cover business expenses before getting paid. It may also limit your ability to grow, since few small businesses have the resources to maintain growth while waiting 45 days to get paid for their work. One way around this problem is to use business financing to supplement your resources – enabling you to grow your business. Getting a business loan can be a challenge though, because most financial institutions have strict qualification requirements. For example, many lenders require that the business have strong assets and years of profitable operation. Few small businesses can provide this track record.

Another alternative is to use invoice financing. Invoice financing solves the problem of immediate expenses vs. delayed revenues in a simple way. It accelerates your revenues, enabling you to cover operational expenses and expand your business. It works by using an intermediary company that advances you funds against your invoices. The transaction is settled once your cable company customer pays their invoice in full.

One advantage of invoice financing is that it’s easier to obtain than other forms of business financing. The most important requirement to qualify is to do business with solid customers – and most cable companies meet this requirement. Aside from that, your company needs to be free from tax and legal problems.

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How Does Invoice Financing Work?

Posted on March 10, 2011 by Administrator

Thanks to the recession of 2008 – 2009 which made it hard to get conventional business loans, Invoice financing has been gaining traction as an alternative source of business financing. It has a number of benefits and in many circumstances, it can prove to be a better solution than a business loan.

Here is a brief outline of the benefits of invoice financing:

  • Focus on growing your business
  • Quick payment for your invoices
  • Pay your suppliers and employees on time
  • Spend less time chasing customer payments
  • Get Better paying customers (using our credit analysis expertise)

The invoice financing process is relatively simple and works as follows:

  1. Setup customers whose invoices you will finance
  2. Submit invoices for approval
  3. Initial advance is deposited in your account (70% to 90% of invoice based on industry)
  4. Once we receive payment from your customer, we settle the transaction
  5. Deposit the remaining 10% to 30%, less the financing fee

One of the most important advantages of invoice financing is that your customer’s credit plays one of the most important roles in getting the transaction approved. This enables small companies with a limited credit or financial history to leverage the quality of their client roster to their advantage.

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What to Do if your Business Loan Application Is Rejected

Posted on March 8, 2011 by Administrator

Going through the business loan application process with a financial institution can be a challenging and time consuming task. Preparing the application package usually requires a lot of effort and time while you collect the relevant information – past tax returns, financial statements, sales projections, management team biographies and so on. But getting financing is usually critical for the success of the business, so the business owners and managers go through the process. So what do you do if after all the effort you invested in getting a business loan, your application is declined?

The biggest mistake business owners can make at this point is taking it personally and losing their calm. The smart approach is to keep calm and detached. Although easier said than done, this is an important step that may help you get the funding you need. Your next step is to try and find out why the application got rejected. Sometimes, lending officers won’t want to go into details about your rejection because they fear offending the client. However, this information can be critical for your success, so try to persuade the lending officer to give you some details – but do so in a friendly manner. One approach that can work in this circumstance it to say something along the lines of ” I understand that your institution won’t be able to help me. However, I plan to apply at another institution. Could you help me understand how to strengthen my application?” Then be quiet and listen carefully. The information the lending officer provides you will be very valuable and will help you in your subsequent applications.

Once you have gathered this information, you should meet with you financial professional and re-assess your application and needs. This is very important, unless you are a financial professional yourself, you should get the advice of one. You should also decide whether you should re-apply for a business loan or an look alternate business financing product.

One alternative source of business financing that has been gaining traction during the recession and ensuing credit crunch is invoice financing. This tool can help businesses that are having cash flow problems caused by customers are paying their invoices more slowly. Many times, invoice financing can be used as a stop gap solution to help shore up your business while you look for a more permanent business financing solution.

One last thing to keep in mind is that a number of lending institutions are in bad financial shape and are only lending money to their absolute best customers. In this case, a business loan application rejection may be more a reflection of the financial health of the institution, rather than that of your business. If you plan to obtain bank financing, it’s a good idea to go to the FDIC’s website (www.fdic.gov) to check out the health of the bank. You will need a financial professional to help you review the data, but it will save you time by allowing you to focus only on healthy institutions that have the capabilities to make loans.

Note: This article is not intended as financial or legal advice – all liabilities are disclaimed. Please consult a competent professional if you require advice.

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Need Financing? Be Mindful of the 3 F’s

Posted on February 14, 2011 by Administrator

Every so often, a prospect will withdraw their financing application and inform us that they got a capital injection  from a family member (or a friend). Although I certainly appreciate why they may prefer that type of financing, many in the industry refer to this as getting money the three F’s – Friends, Family and Fools.

Getting money from the 3 F’s can bring on a host of problems. And for many,  if the investment fails, it will mark the end of the relationship. This is because investing is a risky venture. In the US, more businesses fail than those that succeed, so for starters, the odds are stacked against the investment.

For many business owners that are brimming with confidence, pitching their business is easy. The focus on their assets and spread the news (and money requests) across the four winds. Many times, a friend or a family member will invest their cash to “get in the action”. If all goes well and the “investor” gets their money back plus profit, they are happy.

Unless the investment goes badly, then you run the risk of alienating your investor. This can be very hard on the business owner, especially if the investor is a long time friend or a close family member. It’s not unusual for family members and friends to invest in a business without accurately knowing the risks. They usually get caught up in the excitement and plunk down the money. And then something goes wrong, and there goes the relationship……

Another side effect of having someone from the 3 F’s invest in your business is that you may end up with an unintended business partner. Your investor may start to ask you regular questions about your business, start nosing around, start offering unintended advice – or worse – try to take over if they think they can do it better than you.

One suggestion, if chose this route of business financing, be sure to consult a legal and a financial expert.

Disclaimer: This article is not intended to be taken as financial or legal advice. Please seek the advice of legal and financial professionals when making business financing decisions.

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A Comment about Cheaper Invoice Financing Rates

Posted on February 14, 2011 by Administrator

It seems that almost every day I get a call from a business owner that is currently using invoice financing and is searching for a new company who will offer a lower rate. Usually I turn those opportunities away. Bearn in mind, I don’t mind competing, but I always ask the prospects these three questions:

  1. Are you happy with your financing company?
  2. Are they providing you with a good service?
  3. Is your financing rate substantially above market average?

If they answer “yes” to the first two questions, my advice for them will be to keep with their current financing institution unless their rates are very high when compared to market rates. Most prospects are surprised when I tell them they are probably better off staying with their current invoice financing company.

Here is why I do this. An invoice financing solution tends to be be very involved between the client company and the financing company. There are multiple requests for funding, verifications, rebates and all that good stuff. Why risk a good working relationship if the new one only promises some (but not substantial) savings. And what happens if you get the better price from the new financing company but you start getting less than stellar  service. Do you change again?…. and again?

If you have a good working relationship with your business financing company and you think that you are paying too much for their services, talk to them. They may be open to re-negotiate their price.

My usual disclaimer: Changing (or keeping) a business financing solution is a complex decision. Be sure to seek the advice of a financial and a legal professional. This post is just my opinion and is NOT advice.

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