What is Factoring?
Factoring is the financial tool that speeds businesses' cash flow. To do this, factors purchase your credit-worthy accounts receivable at a small discount and convert your invoices (sales) into immediate cash. Partnering with a factor can relieve the problem that slow paying customers can create.
Factoring is not a loan. There is no debt repayment, no compromise to your balance sheet, no long-term agreements or delays associated with other methods of raising capital. Factoring allows you to use your own hard earned assets to create cash for the growth needs of your company.
Factoring differs from a bank loan in three main ways. First, the emphasis is on the value of the receivables, not the firm’s credit worthiness. Secondly, factoring is not a loan – it is the purchase of a financial asset (the receivable). Finally, a bank loan involves two parties whereas factoring involves three.
Factors often provide their clients four key services: information on the creditworthiness of their prospective customers domestic and international; maintain the history of payments by customers (i.e., accounts receivable ledger); daily management reports on collections; and, make the actual collection calls. The outsourced credit function both extends the small firms effective addressable marketplace and insulates it from the survival-threatening destructive impact of a bankruptcy or financial difficulty of a major customer. A second key service is the operation of the accounts receivable function. The services eliminate the need and cost for permanent skilled staff found within large firms. Although today even they are outsourcing such back-office functions. More importantly, the services insure the entrepreneurs and owners against a major source of a liquidity crises and their equity.
Who Qualifies for Merchant Cash Advances?
Clients who can answer yes to the following questions may make good candidates for merchant cash advances.
- Are you the owner of a small- to medium-sized retail, service or hospitality business?
- Have you been in or owned the business for at least one year?
- Does your business accept credit cards?
- Can you provide processing statements for the previous six months?
- Have you earned at least $2,500 per month in credit card sales during that time?
What are the Benefits of Leasing Equipment?
- Preserve your credit lines. Conserve valuable company capital and keep overheads low.
- Equipment pays for itself. Customers find that leasing their equipment matches the expense of the equipment to the revenue it generates - over time and as the equipment is used.
- Often no down payment is required. 100% financing is available, so you get the equipment desired without providing any upfront compensation.*
- Guard against obsolescence. Obtain specialized equipment as soon as it becomes available, and use it at an affordable rate until the term ends at which point you can return the equipment or purchase for as little as $1.*
- Terms are flexible. Arrange a term that is best suited for you, while completely avoiding floating interest rates.
- Terms are customizable. You can renegotiate your existing lease payment term if you decide to add more equipment before the original term ends.
- Tax benefits. Payments may be fully deductible. (Find out more from your tax accountant)
- Trustworthy customer service. We will coordinate a simplified lease application, timely financing, and an easy payment schedule.
For more information on how to boost your cash flow and build your business contact firstname.lastname@example.org or call (609) 534-0643. For more in depth information on cash advances for merchants click her for a published article written by the owner of Creative Business Finance. http://www.scotsmanguide.com/default.asp?ID=3204