Although the economy is in recovery, conventional business financing still remains elusive for most business owners. Getting a small business loan remains challenging for two reasons. First, most financial institutions are still facing their own financial problems and will only provide business loans to their best clients. Second, and perhaps more importantly, few small businesses meet the criteria to qualify for a conventional business loan. The economic recession has taken such a toll on their business assets and performance that qualifying for a business loan is simply not an option for them.

One of the biggest reasons small businesses look for financing is because they have cash flow problems that are created by slow paying clients. In business to business sales, clients usually pay their invoices in 30 to 60 days. This forces business owners to use their own cash reserves to cover operating expenses while waiting to get paid. Unfortunately, small businesses have limited cash reserves and tend to run into problems, especially when they win an unusually large client/contract.

A solution that has been gaining traction in the market place is called invoice financing. It provides immediate access to the funds that are locked away in slow paying accounts receivables. This enables the company to meet it’s current obligations and make new investments.

One significant difference between invoice financing and other solutions is that invoice financing is relatively easy to qualify for. The biggest requirement is to have credit worthy clients. Additionally, the company must be free of judgements, liens and other encumbrances.

Finding business financing for a company has always been a challenge. to complicate matters, the current economic environment has made it a nearly impossible task to find investors. Nowadays, investors are looking for safe investments, and unfortunately, small and medium sized companies are not considered safe investments.

Although investor financing has many benefits, you should also consider alternatives that don’t require that you give up ownership in the company. One common way to finance a company is to use a small business loan. Although business loans are well known, they can be difficult to get because they have to go through a strict underwriting process. To qualify for a business loan, most companies need impeccable financial statements, solid assets and a few years of positive operating experience.

One alternative to business loans is invoice financing. This solution specifically helps companies with cash flow problems that arise from slow paying clients. It provides a cash advance against slow paying invoices, enabling your business to cover operating expenses. By reducing the number of days it takes you to get paid, invoice financing can help free cash flow that can be deployed to new projects and growth opportunities.

One of the advantages of invoice funding is that it is reasonably easy to obtain. Most factoring companies structure the transaction as a purchase, meaning they buy the invoice from you. Since they are buying the invoice, their biggest concern is the credit quality of your clients. This means that small companies or medium sized companies with a short track record but very solid clients can usually qualify.

Financing companies buy invoices in two payments. The first payment covers about 80% of the face value of the invoice. Your company gets this very quickly. The second payment covers the remaining 20% of the invoice, less the factors fee. This payment is usually provided shortly after your client pays the invoice in full.

Invoice financing is a flexible financing solution that can help small and medium sized companies that have cash flow problems.

Looking for a business loan but can’t find one? Or worse, has your loan request been rejected? One of the toughest jobs for business owners is trying to secure business financing. Unfortunately, getting a business loan isn’t always easy. Although most banks want to lend money, they have strict underwriting criteria that they must follow. This commonly includes asking for your company’s financial history and looking for assets. However – not all small businesses have long track records or tangible assets. Does this mean that you can get business financing? No – it just means that small business loans may not be the best alternative for your company.

Does your company give its clients 30 to 45 days to pay invoices? Most companies that offer payment terms usually run into cash flow problems. This is because few businesses have the required cash cushion to wait 45 days to get paid. That forces owners to either juggle vendor payments – or worse – turn away opportunities. There is a solution for this problem. It’s called invoice financing.

Suppose that instead of waiting 45 days to get paid, you were able to get 80% immediately and the remaining 20% in after 45 days. Would that work better for you?  Of course it would. And you can achieve this by financing your invoices.  The biggest advantage of invoice financing is that you get an immediate advance on your invoices. This gives you funds you need to pay suppliers and employees. It also enables you to take advantage of new sales opportunities without having to worry about juggling vendor payments.

An invoice financing  transaction works as follows. Once you deliver your product (or service) you invoice your client. At that point you also finance the invoice through the financing company. The financing company advances you 80% immediately. You get the remaining 20%, less a small factoring fee, once your client pays the invoice in full.

One advantage of working with financing companies is that they look at businesses in a different way than banks do. They consider your invoices from solid paying clients to be your biggest asset. And as such, they are willing to advance money against them. Of course, financing companies also look at other criteria. But the main criteria are to have good invoices.

Financing can be used in many industries and has a number of sub-specialties. Freight bill financing is a form of factoring that is common in the transportation industry. Construction financing and medical financing are used in the construction and medical industries respectively. Invoice financing is a flexible solution that can be used across many industries and can help position your company for growth.

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Learn about invoice financing in Minnesota and business financing  in Mississippi

Wondering whether you’ll be able to get a loan for your business? Getting a business loan is one of the toughest tasks to accomplish for a company owner. Although banks represent a very cost effective source of funds, they are very selective about the customers they take. This is especially true nowadays were commercial credit at banks is very tight. Most banks will only provide business loans to companies that have a solid track record and substantial assets. But, what if your company does not meet the banks criteria? What is you are a startup or if your company does not have traditional assets such as real estate? One business financing alternative that has been recently gaining traction could be the right solution for you. It’s called invoice financing.

Invoice financing , commonly called factoring, is a type of financing that helps companies that need to wait 30 to 60 days to get their invoices paid. It provides funds to pay employees and suppliers while you wait to get paid by your commercial clients. Invoice financing is different than a small business loan because the financing company does not lend you money. Rather, the financing company advances you money based on your open invoices and gets paid once your customer pays.

A typical transaction would work as follows. Once you deliver your product and send the invoice to the client, you submit a copy of the invoice for financing.  Within one to two business days, the financing company advances you about 80% of the invoice. Once your client submits the payment in full for the invoice, you get the remaining 20% less a small fee charged for the service. Costs are usually determined based on the size of the financing line and can go from 2% to 5% for 30 days depending on the specific details of the transaction.

One of the major benefits of invoice financing is the flexibility that it provides. Your maximum financing line is determined by the invoices you submit and is tied directly to your monthly sales. This means that your financing line increases dynamically, as your business grows. This provides the liquidity you need to stay current on your obligations and enables you to maximize sales opportunities.

Another benefit of financing invoices is that it’s relatively easy to obtain. The biggest requirement is that you do business with reliable companies (or government agencies) that pay in 30 to 60 days. This is critical because your invoice is the collateral, for lack of a better term, that the financing company is financing. Aside from that, your business needs to be properly organized and well managed.

Invoice financing has been around for quite a while and has been gaining traction in recent times as a flexible solution to finance business growth. Due to its structure it’s the ideal source of financing for startup and growing companies alike.

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Learn about business financing in Massachusetts and invoice financing in Michigan.

Do your clients take 30, 60 or even 90 days to pay their invoices? Extending payment terms, as it is commonly known, is very common in the business world. Customers demand that they be given credit, in the meantime you still have to pay for your company’s ongoing expenses.

This can be a problem for companies of all sizes – from large established concerns to small startups. Unless you have enough cash to pay for business expenses – rent, salaries and suppliers – while you wait to get paid – your company is bound to run into problems. You may have to avoid taking large orders to conserve cash. Or worse, you may have to delay payments to employees or key suppliers.

Is the solution to get a business loan from the bank? Hardly. Banks only lend to companies that can provide detailed financials and show profitable operations for many years.  If you get a small business loan, it will be for a fixed amount. If you need additional funds, you’ll need to go through the process one more time. And worse, getting a business loan takes a very long time.

A better solution is invoice financing. Invoice financing eliminates having to wait for customers to pay you – and provides you with the funds you need to meet business expenses. Furthermore, it’s easier and quicker to obtain than a bank loan.

How does invoice financing work? Simple. The invoice financing gives you an advance on your accounts receivable. The advance ranges from 70% to 90% depending on industry and the types of clients you work with. This advance allows you to meet ongoing business expenses without having to wait for your clients to pay. The transaction is settled as soon as your client pays the open invoice.

Financing invoices is also a cost effective solution.  Factoring rates are usually determined based on the amount of financing you receive and on the payment reliability of your customers. The cost will be anywhere between 1.5% to 3.5% per month based on these criteria.

As opposed to other business financing tools, financing invoices is convenient and easy to obtain. Furthermore, it is usually more flexible than other financing tools since your financing line is based exclusively on your sales. That means, that your financing grows with your sales, making factoring a true tool for growth.

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Information about invoice financing in Maine and business financing in Maryland.

Many business owners think that the most effective way to finance their companies is to secure venture (or Angel) financing. Venture capital has a number of advantages, however, there are two major disadvantages that should be considered. The first one is that venture capital is very hard to obtain. The second disadvantage, which is the focus of this article, is that venture capital requires that you give up an equity stake (ownership) and some control to the venture company. Many times, the ownership stakes that VC’s require can be substantial, leaving the founders in a minority ownership/control position.

There is an alternative to venture capital that is often overlooked. It’s a form of business financing that provides you with the capital you need to cover operating expenses and grow your company. It’s easier to obtain than a business loan or conventional venture capital funding. The catch is that it only works for certain types of companies.

Does your company sell its products to other companies or to government entities? If you do, then you are familiar with the fact that most companies pay their invoices in 30 to 60 days. However, while waiting for payment, you still need to pay suppliers and employees. Few startups or growing companies have the necessary reserves to cover expenses while they wait to get paid. This restricts their ability to grow and capitalize opportunities. This is where financing your accounts receivable can help you dramatically.

Invoice financing , as it is commonly referred to, provides you with an immediate advance on your invoices. Invoice financing eliminates the need to wait for payment and provides you with the liquidity to pay suppliers and employees. It gives you a solid financial footing that enables you to take on new business opportunities.

One of the biggest advantages of financing invoices is that it’s fairly easy to obtain. To qualify for it, your company must do business with credit worthy clients, such as large companies or government agencies. This is the most important requirement because your invoices to those clients are used as collateral.

A substantial benefit of receivable factoring is that you will never have to give the financing company any equity or ownership in your business. Once you meet your business objectives – you can finish your relationship with the financing company with no further obligation.

The cost of invoice financing varies based on a number of parameters, such as the amount of financing you need, the credit quality of your clients and the stability of your company. As a rule, monthly rates go from 1.5% to 3% based on these criteria.

If your company sells products and wait up to 90 days to get paid, you should consider invoice funding as an alternative to finance your company.

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Information about business financing in Ohio and invoice financing in Oklahoma

Securing funding for a new venture has always been a challenge for business owners. Ensuring that the company has the proper level of financing is one of the most critical tasks. However, finding financing for a new venture can be very hard. On one side, you can try and secure venture or angel funding. This type of funding will require that you give up a portion of your equity/ownership in the business. It means you will end up with additional partners – or managers – in your company.

Another route consists of trying to get conventional business financing, such as a business loan. However, few startups can get business loans because most financial institutions require that the company have a track record of successful operations and substantial assets. Since most startups don’t have long track records and have few assets, few can meet these requirements and get a small business loan.

Cash flow can even be more problematic for companies that sell to other businesses or to government agencies. This is because they usually have to invoice when they deliver the goods, and then wait 30 to 60 days to get paid. Growing a business while waiting a month or two to get paid can be hard to do. Many times growth is delayed and opportunities are passed. This is an alternative however.

What would happen if you could get your invoices paid in 1 or 2 business days and essentially ran a cash business? Would you still need financing? Would you still turn away opportunities? This can be accomplished by using a neat financial trick – financing your invoices.

Invoice financing enables you to get a substantial portion of your invoices paid immediately, providing you with the funds you need to pay suppliers and employees. More important, you get the funds you need to keep up with your growing orders. If you have a business that is firing on all cylinders, financing accounts receivables  can really help fuel your company’s growth.

Invoice financing offers a simple proposition. A finance company, called a financing company, advances you up to 80% of the net value of your invoices. You get the immediate funds while the financing company waits to get paid. Once they get paid, you get the remaining 20%, less the factoring fee.

One of the more important features of financing receivables is that funding companies biggest criteria (though not the only one) for providing financing is the quality of your clients. This means that if you do business with large credit worthy companies you stand a good chance of qualifying for financing. Furthermore, Invoice factoring can be setup quickly. Usually it takes a week or two to set up an account, and after that, funding can be done daily.

Although invoice financing has been around for a long time, it has been gaining traction and notoriety recently as a solution for growing companies. It offers great flexibility, as your financing is determined by your sales and the quality of your clients. This makes it a great solution for companies whose biggest asset is the clients that they do business with.

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Learn about business financing in North Carolina and invoice financing in North Dakota.