What Additional Benefits You Should Look For in Factoring Company?

You look forward to an invoice factoring financing company hoping for a hassle-free experience and a faster cash in hand timing. The method is the most popular when businesses are looking help with their cash flow needs. However, there is much more than what you can expect from your factoring company.

A factoring company can be helpful for a business in more than one way. Besides funding accounts receivables, factoring companies can help with the following:

Establish your customer’s creditworthiness – Invoice factoring companies have the credit history of most of the clients associated with your business. This means, if you are unsure about dealing with a particular customer, you can run a detailed background check with the help of your factoring company and know if the client is suitable for long-term business. You can gain insight about different clients in your market and choose to do business with them wisely

Reassurances of not having long-term contracts – Long-term contracts are something not every business wants to get stuck to. Businesses find it difficult to manage invoices that are due for many days. With the help of a factoring company, they don’t have to get into dealing with different kinds of clients. All they need is to factor the invoice, and rest assured, they don’t need to worry about long-term contracts whatsoever.

Factor if need be – Not all invoices do you need to factor. This information can be achieved only with the help of a factoring service provider. Just because you factor most invoices doesn’t mean that you have to factor all of them. It is highly likely that certain invoices can be paid instantaneously by your customers and there is no waiting period.

Thus, before considering your invoices for discount financing, get the status of payment date of the invoice with the help of the factoring company. If the payment date is arriving soon, you can submit the invoice directly to the client instead of discounting the same. Thus, you can factor only when you have to. .

Invoice factoring services can be availed for a variety of other purposes. With the help of right company, you can save a lot on your invoices. Also, you could gain insight on various topics that can help you take wise business decisions. In fact, the best business advice can be achieved from those who know the market inside out. The benefits you can avail from your money lender is immense, provided you ask.

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How Invoice Factoring is Benefiting Various Industries in Florida

pmf-helpingTo secure their stance in market many industries in Miami, Florida are opting for invoice financing for a steady fund flow. For businesses that do not want to wait long for their payments from customers, invoice factoring is the best alternative to keep finances flowing in. And, most businesses across a varied of industries are approaching factoring companies to keep themselves afloat in rough phases.

Let’s look how industries in Florida utilize accounts receivable financing to manage their operations.

Staffing Industries

Businesses in this industry are bound to pay their employees and other contractual staff on specified a date that sometimes is weeks before they receive payments. Factoring their receivables is the best option to meet payroll expenses.

Wholesalers

Fact is wholesale businesses are always funds sensitive. Not always wholesalers receive their payments on time, while they need funds to buy more merchandise to carry on. Here, invoice factoring rescues them with instant funds. Many wholesalers in Miami are now completely opting for cashing their receivables to experience a smooth flow of funds and cope with fluctuating prices of stock.

Electronic and Other Manufacturing Industries

It has become a common practice for manufacturers in Miami, Florida to resort to business receivable factoring for supporting their working capital demands. They need constant funds-flow to support their overheads and purchasing raw materials for continual of manufacturing cycle.

Printers and Publishers

Printers and publishers always the victims of late payment and at same time they cannot stop taking new contracts. Invoice factoring helps them with to keep their printers running and helps them grow.

Service Providers

Service providers often offer credit to their clients and in turn have to wait for their payments. To meet their overhead expenses and capital burdens many service providers like law firms, engineering consultants, software consultants, architects and others rely on a/r factoring.

Accounts receivable financing has always bridged the gap between funds and businesses by allowing them to enjoy the freedom of instant funds against their receivables. As this source is very flexible, businesses in various industries are making the most out of this. Chasing behind customers for payments can be annoying for both, hence invoice factoring.

 

Invoice factoring solutions for your Vegetable wholesaler business

In Los Angeles, Accounts receivable factoring is a financial product that is readily used by vegetable wholesaler businesses that need working to grow to the next level and maintain sales momentum. Factoring can provide your construction business with debt free cash flow, though: real, year in business, or the credit situation. Funding criteria is based primarily on the creditworthiness of its customers.

How Factoring works: The factoring company buys invoices that qualify at a discount, and immediately sends proceeds of approximately eighty percent the seller. A few hours after the presentation of its accounts receivable, a company had lacked cash has now obtained working capital needed for the following items:

  • Business Development
  • Hire employees
  • Maintenance margin
  • Purchase of equipment
  • Paying taxes

The balance is held in a reserve account and forwarded to the company as soon as picked up the bill – minus the small fee. Sounds simple?

Unfortunately, many vegetable wholesaler businesses overlook factoring services, which is ironic because factoring is often the most ideal for cash flow solution for such a dilemma. While not all companies a great prospects for factoring, the vast majority of them are.

To ensure that your experience of factoring is simple, effective and affordable, there are three things you should insist on:

A flat rate

This takes the guess work out of the process. You know exactly what you are paying for the service.

Zero interest

A true factoring is a debt free financial solution with a fee based system. There is no advantage to amassing a large loan with payments every month regardless if you needed the use of the money or not.

Financial stability

Make sure your factoring company provides cost effective solutions. In fact, a factor that is licensed as a commercial lender and has been in business for over 15 years is typically a good sign of stability for your vegetable wholesaler company.  You want invoice factoring that is smooth and this can only be achieved through the use of experienced factors.

Conversely, if you don’t find these items then red flags should go up, and  “head for the hills” (seriously, avoid these problems):

Avoid Rolling interest

Avoid all interest. Factoring, done the right way, not a line of credit, can provide a debt free solution for companies who need extra money.

Avoid Hidden fees

Be sure to ask your prospective invoice factoring companies of an example of an invoice fee calculation. Also, ask them if they have fees that charge on all invoices whether factored or not.  You should be able to ask them if these are my total fees after an example is given to you?  If they say no, or trip or appear evasive on this issue, run, do not walk! You can find a better opportunity that will not cost a small fortune.

If your vegetable wholesaler business needs cash flow quickly, put your invoices to work for you. Why wait 45, 60, even 90 days, when taken can provide instant access to financing for all your business needs. Find a factoring company trusted and get straight forward, no solutions of interest to their cash flow problems in a larger city like Los Angeles.

The real cost to your business is not the cost of factoring, it’s the cost of not factoring and loosing the sales momentum your company could have had.

Avoid Running out of Cash during Christmas by Factoring?

Its the holidays and your family business is about to have the best sales ever. Your employees are all prepping product and pushing it out the door, and your suppliers are shipping more inventory than ever…life is great, right? Maybe or maybe not, but invoice factoring can be a quick and effective solution regardless.

Accounts receivable factoring can be a solution for companies that have all their working capital deployed into their business’s payroll and inventory. Having a good Christmas is not all about sales, its really about cash flow. When a business owner thinks of open a business, they first think in terms of sales and profit. This is natural, but cash flow is really the blood that keeps the rent paid, telephones paid and the lights on.

What does a business owner need? Most experts on small business will recommend that a business have at least 6 months of cash reserves above its seasonal peak, but few can afford or have this luxury. So, businesses do the next best thing…they setup an invoice factoring line which allows a business to convert accounts receivable into instant cash so that a business can recycle its working capital for immediate cash.

How do invoice factoring companies convert the invoices? what is their process? The process should be simple or you are in the wrong place because unlike banks, factoring companies are a source of working capital that is traditionally easier to access than the traditional bank. For example, 1st PMF Bancorp has been a family run factoring company for that last 30 years and its process has been simplified to allow companies needing cash flow to have access without hassle. Their process is to approve an account using a simple 1 page application. Then, they review the client’s customers and have an approval to fund within 1 to 2 days. Factoring invoices from this point is so easy it hurts, when compared to the gyrations that a traditional bank requires a small company to do.

For a small business in the holidays, invoice factoring companies could be the gift that actually keeps on giving.

Stephen Perl, MS, MBA

CFO of 1st PMF Bancorp

“Providing Growing Businesses with Capital for over 30 years”

www.PMFbancorp.com

Factoring Invoices is a great Cashflow Solution for IT Company

551536_10150768962965921_568199615_nyour business is large or small, factoring invoices which is sometimes better understood as, Accounts Receivable Financing, is a simple and quick solution to tap into cash that is locked-up in your company.  I will give 3 quick ways that business receivable factoring is a solution through an illustration of a past client that was an IT Firm.  This IT software company designed educational software…let’s call them the “IT Software Company”.  PMF Bancorp, the name of our factoring company, provided the IT software company with advances on a weekly basis so the IT firm could pay their employees timely. Because the IT software company had high labor costs due to employing programmers, there was a large amount of cash needed twice a month.  The AR Financing (or Factoring invoices) also kept the IT software company’s credit in good standing.  The third positive item that resulted from PMF Bancorp’s factoring invoices for the IT firm was that they were able build their credit with vendors more quickly because they were always on time with their payments due to the increased cashflow.  AR Financing allowed this company to grow 500% in 5 years…and eventually was purchased by a larger competitor…a real story as I am the portfolio manager.