The Ins and Outs of Invoice Factoring

In this article we will discuss the ins and outs of invoice factoring. Invoice factoring allows companies to receive monies quickly without having to obtain a loan. It is a sort of cash advance that doesn’t have to be repaid. It can be used to quickly generate cash for one’s business without taking on new debt.

A business is able to access money in as little as 24 hours using invoice factoring. It would be a difficult task to list any form of income generation which would allow a company to access money as quickly and easily and without having to pay it back. Often times, not only does money have to be paid back but a company will be forced to pay handsomely for the privilege of borrowing it.
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Using A Factoring Company As Alternative Funding For Your Business

All companies need cash. Monies are required to sustain a business. Employees, utilities and rent have to be paid. Companies have to purchase materials and supplies. In summary, capital is necessary to both sustain and grow a business. Without it, a company simply would not be able continue to stay in business. Many businesses rely on debt so that they have enough capital to get by. While debt is sometimes a necessary evil, it is not often optimal. This is largely because debt has to be repaid and with interest. When a company has too much debt they are under a lot of pressure to perform and generate revenue so that it can be repaid.
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The Many Benefits of Purchase Order Financing

Purchase order financing has many great benefits and its availability as a cash generation option has been quite helpful to many businesses. This form of financing is fast and doesn’t rely on a businesses’ credit history, it allows companies to raise money without taking on new debt and is an option even for new businesses. Below, we will discuss these benefits more in-depth.

a. Purchase order financing is easy: For the most part, this sort of financing is fairly easy. There are not a lot of hoops to jump through, like there are with bank financing. As a long as a company has credit worthy customers and invoices to sell, it is not incredibly difficult to find a Factor to work with.
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Interview with Jon Anselma

Jon Anselma spearheads the Paragon Financial Group, which was founded in 1994 with the initiative to afford growing businesses an alternative to conventional Bank Financing. With satellites in Tampa and Orlando, Paragon Financial Group is headquartered in Fort Lauderdale, Florida.

Ralf Bieler, President & CEO of Cash Flow Exclusive, LLC, caught up with Mr. Anselma to talk with him about his company and its business, as well as about his view on the economy and future plans.

CFE: Jon, why don’t you kick us off by telling us your “story”. Who is Jon Anselma? When did you start working in the cash flow business, how and why did you get into it, and how did you get to Paragon?

Jon Anselma: I first learned of factoring while growing up in New York. My best friend’s father was a garment manufacturer in the heart of the garment district in New York City. In those days, numerous factoring companies lined those streets of Manhattan. He explained to me what factoring was and that without it, he wouldn’t be in business. I was enamored with the concept and at 15 years old decided that’s what I wanted to do for a living.
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Invoice Discounting: A Tool To Finance Your Business

Invoice discounting can be an excellent way for some companies to infuse much needed capital into their businesses. It is quite possible to run a very successful company and still not have the money nesseray to cover basic expenses such as rent, materials and salaries.

For someone who has little to no experience running a business, this may be quite surprising. However, persons who have been in the trenches, are quite aware that a company can be profitable and still be cash poor. Most companies that find themselves with not enough capital to meet their obligations, will turn to a bank in hopes of obtaining a loan. This can be a decent option in some cases but may not be available for every business. There are also some huge disadvantages to using a bank loan. We will discuss some of those below. First, we will mention what might be an excellent choice for businesses in certain industries, invoice discounting.
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Financing Your Business By Factoring Invoices

Business owners must be resourceful in order to be successful. This has never been more true then today. With companies being forced into bankruptcy or into closing their doors, finding the money to stay afloat is becoming more difficult. One method that is perhaps underutilized by a large number of businesses is invoice factoring. Many companies are unaware that it exists or may lack enough understanding to give it a try.

Factoring invoices is a great way for businesses in many different industries to raise the money that they need to function and/or grow. It provides a way to raise capital that does not require taking on any debt. This is very attractive to many business for a number of reasons, two the most common are not being able to get a loan and not wanting to add any more debt to an already heavy load.
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Accounts Receivable Factoring: Is Your Business Eligible?

Your company may or may not have heard of receivables factoring. If not, what you learn in this article will be quite exciting. Receivables factoring is an excellent way for companies to receive capital in a very short amount of time. Businesses generally rely on debt when they are in need of cash. The problem with taking out a loan is that first of all, a business has to be eligible. It can be very difficult for some businesses to meet their basic lending criteria.

Banks generally won’t loan money to businesses that don’t have a lot of assets and who haven’t been around for very long. Companies with poor credit will have an even more difficult time finding financing. Therefore, there may be few options for such companies. Thankfully, receivables factoring offers a good alternative.

Accounts receivable factoring involves a company selling their invoices to factor. A factor will purchase them at a discount rate generally around 80 to 95%. That money will be paid in cash and can be used by the company immediately and whatever they want or need. The factor will then collect payments from the company’s customers. After this money is collected, they will return it to the company that sold them the receivables. The factor gets paid by charging that company a fee. How much factoring costs will be dependent on the factor and their fee structure.
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The Broker’s Role in the Factoring Transaction

What is your role in the factoring transaction? How involved should you be? Everyone has different feelings about the answers to these questions. This article will attempt to provide some general guidelines and helpful ideas.

The primary initial role a factoring broker must serve is as an “Educator”. First, you must educate the prospect about factoring, invoice funding, po financing, accounts receivable factoring. Understand the business problems your prospect is facing and explain how factoring may solve those problems. Assume the prospect knows nothing about factoring; don’t forget, factoring is a foreign, and often scary, concept to many entrepreneurs. Slowly walk the prospect through the benefits of factoring, with particular emphasis on the impact the benefits will have on his business. Also explain the logistics of factoring and what the factor is likely to expect of him.
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Payroll Financing

We all know that the banks do not provide a friendly credit environment to small, growing businesses. If they offer any money, it usually isn’t enough. This often leads to an inability to grow your company due to a lack of funds. Well, there’s a type of financing out there that is greatly increasing in popularity in our industry. It’s called factoring, also known as invoice factoring, accounts receivable financing, or purchase order financing. This type of financing concentrates on your customer’s ability to pay, not yours.

Factoring is the sale of your accounts receivable (invoices) to a funding source at a discount off the face value in return for immediate cash. The funding source is known as a factor.
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Funding Your Fast Growing Company

A fast growing company will be in constant demand for funds in order to further fuel that growth. Money is required to purchase additional materials, bring in more personnel and cover operating costs.

There are numerous ways for a business to get the funds that they might need, though there is no guaranteed way. Loans are the most common way to secure funds though they are difficult to obtain for many. New companies and those with bad credit have the hardest times. One very good option is to use accounts receivable financing, and invoice factoring, also known as invoice financing. Read more