| Are you selling goods or services and waiting up to 60 | | | | substantial advance on your slow paying invoices - |
| days to get paid? Learn how factoring receivables | | | | sometimes up to 85% of what you have invoiced. You |
| can help your business grow. | | | | can use the advance as working capital to cover new |
| If you sell goods/services to other businesses or to the | | | | sales orders, payroll or supplier payments. Factoring |
| government, then you know that commonly you have | | | | receivables provides you with relief form slow |
| to wait 30 to 60 days to get paid for your services. | | | | payments and provides you with the working capital |
| Unless your business is well capitalized, waiting to get | | | | you need to grow. Factoring receivables is simple to |
| paid can drain your working capital and affect your | | | | use and works as follows: |
| business. Lack of working capital can prevent you | | | | 1. You provide the product/service to your client and |
| from making new sales, forcing you to sentd | | | | send an invoice to them |
| customers to your competition. What is worse, if the | | | | 2. You send a copy of the invoice to the factoring |
| problem is not corrected, it can affect you ability to | | | | company |
| pay employees or suppliers. Missing payroll and supplier | | | | 3. The factoring company advances you up to 85%. |
| payments is a sure indication that a business is in | | | | This is your first installment |
| serious financial troubles. The solution to this problem is, | | | | 4. Once your client pays, the remaining 15% (second |
| of course, simple. You just need to get business | | | | installment) is advanced, less a small service fee |
| financing. Obtaining business financing (such as a line of | | | | The fee you pay will be based on the sales volume |
| credit or business loan) is easier said than done. If you | | | | that you finance and the credit quality of your clients. |
| go to a bank, they will require that you provide them | | | | Fees can generally range from 1.5% to 3.5% per |
| with three years audited financials and a solid business | | | | month. On of the big advantages of factoring |
| plan. That kills any chances of financing for most | | | | receivables is that it is easy to obtain and can be set |
| startups and new businesses. There is, however, an | | | | up in a few days. Most new and established |
| alternative form of financing that can help you get | | | | businesses can qualify easily. The biggest requirement |
| working capital. And, it almost always works better | | | | to qualify is that you must do business with reputable |
| than a business loan. It is called factoring financing. | | | | clients or government entities. |
| Invoice factoring provides your business with a | | | | |