Factors provide services for health care, transportation, manufacturing companies, trucking companies, and many others. Besides this and depending on the agreement, factoring companies also take over your collection process so you minimize your time, money and effort in invoice collection. With account receivable financing, the company will be able to enhance its production, sales, work output and revenue. Other advantage is that, you will be able to pay tax promptly, give discounts to customers, enhance your buying power and expand your business without financial speed breakers. Invoice factoring improves your company’s financial statement and maintains a flawless currency flow of your business deals.

Invoice factoring enables you to change your slow paying invoices into immediate cash. A reliable invoice factoring company offers low rates, flexible contracts and excellent collection services. Factoring companies differ in their programs, services and their funding capabilities. Factors also facilitate analysis on customer credit, collection management, monitoring services and invoice mailing. When you deliver your product/services and generate an approved invoice, factoring companies will offer you cash as fast as in 24 hrs. In essence, while working with factors, you can speed up your working capital which enables you to meet your financial obligations.

Trucking companies need to pay regularly and promptly. Making these payments on time can be a strain even for the most established trucking companies. If you search for trucking factoring company you will find companies that provide quick pay for freight bills. Freight factoring has a number of distinctive advantages over business loans. Factors provide fast cash which the company needs in order to pay drivers, recovering transportation costs and take on new jobs without going into debt.

Unlike a line of credit that has limits, invoice factoring has no financial limit. Besides, you can leave a long lasting positive impression on your clients, employees, vendors and investors. It’s the most alluring source of financing, since it saves time and man-power from debt collection. This service is globally accepted, as factors have applicable knowledge about a particular country, language, culture, legislation and economy. So, benefit from flawless working capital for your business processing with the assistance of invoice factoring companies

Article by Macy Busson

More Invoice Factoring Articles

The restaurant industry is massive, employing millions of Americans. Despite the fact that eating out is a discretionary purchase for every customer, it remains a mainstay of people’s everyday schedule. For successful single-location restaurants, expansion could be a major step in revenue production.

Fast food is the industry giant with speed, convenience and a massive international presence with unparalleled brand recognition on their side. Because most casual dining restaurants tend to have higher prices and small customer bases, they are more sensitive to consumer budget and the wider economic situation. For investors, fast food is the safer shelter in a down economy.

The rise in local food movement along with the perception of neighborhood “joints” as the friendlier and healthier choice, is helping fuel a growth in restaurant expansions from small, privately owned casual dining restaurants all over the country. But investors are still wary, with wall street in the back of their minds, and are looking for safer bets. Finding restaurant financing is still a struggle for even the most successful owners.

Expansion is no simple game either. What works in one neighborhood could fail in another. The restaurant’s concept has to be flexible and appealing enough to serve a wide range of customers. Careful review of customer base is important to make sure that a new location doesn’t start taking sales from the original. Investors pay careful attention to trends in the dollar value of guest checks as well as how much revenue is produced by special deals and how much is customer loyalty and mass appeal.

As the economy, the awareness of American consumer and the industry landscape evolve, the restaurant owner will find that while some doors remain closed, many are opening up. As small, single location eateries gain dedicated customer bases, succeed with their business model and prosper despite the issues that surround the American economy, the possibility of expansion is very real.

In lieu of investor support and with banks still not extending loans to “higher risk” industries, the restaurant owner may turn to alternative funding sources including merchant cash advances. Companies providing these types of funding are more enthusiastic about getting involved in lucrative and marketable business plans that have proven themselves and could increase production with more locations.

“We know a good thing when we see one,” CEO and co-founder of Paramount Merchant Funding, Daniel Smith said. “Restaurants have seen huge gains when they are able to expand to reach more customers in a new location.” Dan’s company specializes in restaurant funding and he has seen thousands of owners seeking small business alternatives after banks and investors have turned their back on them. “Our niche is underwriting a restaurant’s overall business model, cash flow and financials to provide necessary funding in a timely manner.”

Merchant cash advance has been a major source of expansion funding for restaurants all over the country. Paramount Merchant Funding have been able to help business owners implement their plans, make profitable choices on new locations and provide working capital while investors wait in the wings.

About Paramount Merchant Funding

We can provide you with Merchant Funding of up to $ 250,000 per business location. An alternative to a traditional bank loan, we advance you cash today based off your future credit card sales (Visa, MasterCard, American Express, Discover, and Debit Cards). There are no personal guarantees or collateral attached to the merchant cash advance. This allows us to provide you with the working capital you need within 3 business days or less. There are no restrictions on how to use the money allowing you to grow your business hassle free.

More Restaurant Finance Press Releases

Access to capital and marketing are two key components that affect the ability of small businesses to compete today. The Hispanic E-Chamber of Commerce provides small business owners tools in e-marketing, the fastest growing mechanism to reach new customers, while Capital Partners assists with capital solutions to grow a company.

“The current economic situation we are facing has hampered the ability of small businesses to secure funding to make investments or fund day-to-day operations, which in turn has restrained their ability to grow and compete effectively,” said Tayde Aburto, Hispanic Chamber of E-Commerce president and CEO. “We are honored to join forces with Capital Partners, a company that can help solve the financial needs of small Hispanic businesses. Both organizations care deeply about the success of the ‘mom and pop,’ micro and small business community. By joining forces we will be able to offer the resources community members need to contend in today’s economy.”

“Our company is extremely committed on educating the Small Business Community on affordable business line of credit programs, flexible business financing solutions, and access to working capital options coupled with empowering them with a knowledge base on how to survive and thrive in 2011 and beyond. We prudently believe that Knowledge is Power,” said LaDona Caluory President of Capital Partners.

About Capital Partners:

For more than 18 years, as a Direct Small Business Lender, Capital Partners has developed a reputation as the premier source for Flexible Account Receivable Financing Solutions and Smart Financial Solutions. Capital Partners is the nation’s leading invoice factoring provider—funding over a billion dollars to thousands of businesses nationally. It provides straightforward solutions to cash flow needs.

About Hispanic Chamber of E-Commerce:

The Hispanic Chamber of E-Commerce is an online business association focused on enhancing the competitiveness of the small business in the advancing digital economy.

That is not the case, it’s simply the case of monetizing or cash flowing your probably largest current asset, your receivables, and paying a financing charge, or discount fee for the service.  In general approximately 90% of the value of an invoice is advance to you pretty well the same day that you issue your invoice. Your normal obligation is to provide some sort of proof of delivery or acceptance of that invoice related to your goods and services. We’re of the opinion that factoring receivables seems to be viewed as a small business financing tactic, but we can assure readers that some of the largest corporations in Canada utilize the tactic also – in some cases its simply jazzed up with a fancier name such as ‘ securitization’ or financing via ‘asset backed commercial paper ‘, etc. So the big boys are doing it also! Don’t forget that.

When clients talk about moving forward on this type of business financing the largest challenges seems to simply be their ability to understand pricing, pick the right firm to work with, and finally, to ensure that the daily flow of paperwork around this type of business financing makes sense. If the wrong factor partner is selected there are countless stories out there of firms who have experience a negative level of customer intrusion around the whole factoring receivables process. So choose your partner well, and probably the best info or advice we share in this regard is to seek the services of a trusted, experienced and credible business financing adviser who can steer you towards financing and cash flow success.

A common question related to our ‘primer’ on factoring (also called invoice discounting or receivable financing) is: ‘ Do we qualify ‘. The short and positive answer is absolutely, if you have receivables you qualify, that’s what this form of business financing is about. Many business owners or their financial manager’s struggle with the cost of this type of financing which typically is in the 1- 2.5% range in Canada. The bottom line on the costs is simply that they will vary relative to the size of your receivables, the perceived credit quality, and the type of firm you contract with in this regard.

That’s where the help of a Canadian business financing expert can help you immensely. In fact more often than not that expert can demonstrate how you can significantly reduce the cost of financing receivables to almost zero in some cases, but certainly a reasonable amount in most situations.So whats our primer summary on receivables and business financing via factoring. It’s simply that if you’re reading this you probably have a business financing challenge. A/R financing is a method to eliminate that challenge. Working hard on your financing is commendable; working smart on your financing with an expert is a must. Investigate the solution that will bring cash to your firm’s door tomorrow..

About the Author

Stan Prokop – founder of 7 Park Avenue Financial – Originating business financing for Canadian companies, specializing in working capital, cash flow, asset based financing. In business 6 years – has completed in excess of 45 Million of financing for Canadian corporations.

Practically anyone can qualify for small business grants. The government puts aside this money for entrepreneurs to get started and also give the local economy a bit of an economic boost. All you need is a respectable business plan, and you should have no problems qualifying for your grant.

Small business grants are awarded after an individual fills out the application and goes through the process. The application process may take a bit of time, but the financial gains make it well worth your while. And of course the best thing about these grants is that you don’t have to pay it back- ever. All you have to do is use the money to get your business up and running. Where the money goes for the business is up to you, so you can get funding where and when you need it most.

Small business grants from the private sector are also available, but tend to be stricter in their requirements. They also generally award a lower amount of funds than their government counterparts. However, every little bit helps, so apply for as much money as you can to hopefully have the funds you need in the end. Starting a small business is hard enough without having to think about the start-up capital. Stressing about how you’ll pay for everything can make things ten times worse than what they need to be. Take advantage of the grants available to you and you should be able to enjoy a smooth start to your business. Apply today!

About the Author

Jason Ciao also blogs at governmentgrants.com

Find More Small Business Grants Articles

This of course helps relieve the stress of paying back that loan or the group of investors that fronted you the money to get your business off the ground. Being able to concentrate solely on your business without worrying about cash flow is a sure fire way to ensure its success.

This is important when you consider that the vast majority of small business start-ups are being done by women every year. Not only that but women are also 75% more likely to succeed in their business venture then men are. Because of this there are more and more resources becoming available for the woman who starts or owns her own business. Everything from small business grants and loans to free business plan help and tax strategies can be had for any woman in business.

When considering getting grants for women owned businesses there are four things that can make the process quicker and easier.

1. Create a workable business plan – This can be the most important part of any new business start-up. In fact most grant applications require a business plan so that the grantors can make an informed decision as to who receives a grant and who doesn’t.

2. Grant research – There are literally thousands of government and private grants available to women business owners. Some are for specific areas of business while others are more general. It is also important to find out what the requirements for each grant you may be interested are.

3. Hire a professional – Finding an accountant or lawyer who is familiar with the grant request and application process can greatly increase the chances of success. They can help with everything from building the business plan to double checking all the paper work before it is submitted to the granting agency.

4. The internet – There are many websites that help the woman grant seeker find the grant or grants that she is looking for. They also provide an abundance of information on successfully applying for the different grants that they track. These sites can be a great resource for the woman trying to start a new business.

Finding small business grants for women can be done quickly and easily on the internet. To successfully apply for those same grants will take some time and effort but the payoff is well worth it when you consider that the government and private organizations are giving away billions of dollars every year.

Article by Andrew Bicknell

We feel that it is getting that prominence for potentially all the wrong reasons, namely that in the current Canadian economic and banking reality financial, cash flow and working capital facilities from traditional institutions such as the banks have been significantly curtailed.

So lets do a basic primer on factoring, and then discuss how it’s similarities and differences from what is offered in other parts of the world, and why it works and when it is problematic. We also have a solution for some of the business owner challenges associated with factoring and receivable financing.

Factoring has been around for hundreds of years (if not longer!). What’s the basic premise? It’s simple. You sell one, (or a number) of your receivables, and you immediately get cash. In our article we will continually try and point out some of the nuances of factoring that get Canadian firms into trouble – here is the first one – when you sell your receivable make sure you understand whether its recourse or non recourse. By that we mean that on a recourse deal if your customer never pays, goes bankrupt, etc you are responsible for paying back the finance firm. If you arrange what is known as ‘non-recourse’ financing the finance firm is responsible for the loss, not you. As you can imagine non recourse factoring is a bit more expensive, as you are eliminating all collection risk.

Let’s touch on another relatively unknown point in factoring, and that is that it is a key component of a potential asset based lending strategy. Asset based lines of credit are available to Canadian firms – these facilities are generally not with our Canadian chartered banks and are offered by very specialized firms. Not only can the business owner get financing for its receivables, but inventory and equipment and real estate can be included also. As the business owner knows, inventory and equipment are crucial parts of working capital, inventory more so.

When businesses factor their receivables in Canada, they, for the most part, are no longer involved in the collection function of those receivables.

Two very important points come into play here -

1. You have just eliminated cost, personnel, and time involved in collections – (That’s a good thing)

2. You have just handed over part of the key customer relationship to a third party with whom your customer has no previous knowledge, dealings – (That we feel, is a bad thing!)

In summary, we have touched on a few key basics revolving around factoring and receivable financing in Canada – i.e. the history of factoring and why its growing more popular; and, in addition we have focused on some ‘ nuts and bolts ‘ of a factor / receivable financing offering with respect to some positive and negative aspects of such an alternative financing facility. In future articles we will discuss additional pros and cons of this relatively new type of financing in the Canadian landscape.

About the Author

Stan Prokop is the founder of 7 Park Avenue Financial.

Step One: Sell Healthcare Staffing Agency Invoices to a Factor

Technically, the first step in the staffing factoring equation happens when the agency’s customer (presumably a medical facility) has a shift open and requests the agency to fill that position. Once an agency employee works the shift, the agency is able to invoice the facility for the hours worked. At any time after the agency has invoiced the medical facility, it also has the ability to sell the invoice to a healthcare staffing factor.

The actual sale of the invoice is usually accomplished electronically, in that the agency emails or faxes a copy of the invoice along with corresponding signed timed sheets to the staffing factoring agency. The invoices and timesheets must be accompanied by an Assignment of Accounts Receivables form, which lists out all the invoices the agency wishes to sell to the factor and includes a signature from an authorized employee of the agency.

Step Two: New Debtor Credit Check

Once the healthcare staffing factoring agency receives the schedule of invoices and timesheets, an account manager reviews it for new customers. If there happens to be new customers (a.k.a. debtors), the account manager will conduct a brief credit review in order to establish a line of credit for that debtor. Typically, the credit review process can be completed within 24 hours of receipt. Once a new debtor has been approved for funding, the account manager will notify the debtor’s accounts payables department that when they receive invoices from the agency, the payment should be remitted directly to the factor.

If there are no new debtors included with the schedule, then the account manager simply moves on to step three of the healthcare staffing factoring process, which involves verifying the submitted invoices.

Step Three: Healthcare Staffing Agency Notifies and Verifies Debtors

Because a healthcare factoring firm is advancing cash based off of services that have already been rendered, it’s customary for the factor to follow-up with the debtors to be sure that they were satisfied with the staffing services, and they intend to pay the invoice.

The level of detail involved with verification varies from factor to factor. For example, some factoring firms verify every single invoice, confirming with a DON (Director of Nursing) that “Employee X” from ABC Staffing worked a 12-hour shift the prior week. Whereas, other factors might conduct “spot verifications,” in which account managers will select random invoices to verify within each schedule. Regardless of how often a factoring firm verifies invoices, it’s important for healthcare staffing factoring agencies to remember that factors will not advance money on an invoice unless they are confident that the invoice will be paid.

Step Four: Healthcare Staffing Agency Receives Cash

After the notification and verification procedures have been completed, the healthcare staffing factor is able to purchase the agency’s invoices and advance cash. In this day and age, healthcare staffing factoring firms generally send money electronically via same day wires and/or ACH (automated clearing house) transfers, which is basically an overnight funds transfer.

It’s important to keep in mind that the criteria for receiving a same day wire may differ from that of receiving an ACH. For example, some factoring firms may institute a specific funding cut-off time, requiring healthcare staffing agencies to send in their invoices and time sheets before a specific time in order to be funded the same day.

Step Five: Healthcare Staffing Factoring Firm Receives Payments and Remits the Reserve Back to the Agency

If you recall from step three, the healthcare staffing factoring firm notifies an agency’s debtors to remit payment directly to the factor the first time it purchases an invoice for that debtor. At the time a factor receives payment on an invoice, it retains its fees for advancing cash and then remits the difference back to the healthcare staffing agency. In factoring lingo, the difference that is remitted back to the agency is called the “Reserve.”

When it comes to how often a healthcare factoring firm releases reserve, there are many different positions. Some factors conduct automatic reserve releases on specific days each month, while others only release reserve upon request. Some factors require a minimum balance to remain in the reserve account at all times. Whatever the case, it’s important for healthcare staffing agencies to be aware of the factor’s reserve release procedures.

As previously stated, it’s a common misconception that staffing factoring process is a complicated. Although the exact procedures may vary from factor to factor, the basic staffing factoring model does not change.

Philip Cohen is the founder and president of PRN Funding.

Today’s financing market is very illiquid in offering restaurant businesses leasing/financing. Most lender portfolios are better off served in different industries from a risk/reward factor. However, there are niche lenders out there that will entertain restaurant financing but usually require the applicant to have at least a minimum of one to two years time in business. Most start-ups don’t have a chance unless their personal credit score are over 700 and are willing to pledge additional collateral to the deal with additional clear and free assets. The lenders that finance restaurants will properly offer up to 100,000 application only and over that amount full financial and tax disclosure would be required… Approved leases can run between 24-60 months with various buyout clauses…

The most unique part of this article is the merchant cash advance/loan programs. Most people aren’t even aware of these programs….

The initial question a lot of people are asking is what is a merchant cash advance? An established business in existence for one year or more with visa and MasterCard sales can qualify for a loan or a merchant cash advance on their past activity up to 50,000 from a financial institution and 50,000 or more per location from a true merchant cash advance company. The monthly average of their visa and MasterCard sales x 1.5 will be a qualifying amount that the lender will fund up to. Some cash merchant advance companies will fund up to 100,000 per location.

This is a great way for a business to obtain working capital. Most conventional lenders shy away from the restaurant industry

These cash merchant advances/loans are great for businesses that have seasonal cash flow needs, that aren’t capitalized properly and need more time to achieve their sales base, have credit issues that can’t be overcome at the bank, businesses that need instant cash now, and obviously many other factors tailored to specific businesses.

These lenders aren’t FICO driven and are interested in you past Visa/ MasterCard Sales for the previous six months. Usually the company’s bank statements, the merchant processing statements and a signed application are required to commence the lending process. Once the lender has received these requirements, a decision can be made fairly quickly, usually within 24-48 hours. Beyond an acceptance, the money is usually funded within seven business days.

The next obvious question, is how does the customer repay back the loan or cash merchant advance? It is from the future card sales, a small portion is paid back each day to pay back the lender. This is important because there are no balloon payments or monthly payments to consider. The lender calculates a small repayment per day that can last up to one year.

Other programs that we have come across don’t use Visa/MasterCard as the total measuring stick for the qualified loan amount. They use the total annual gross sales and apply a percentage against it. The beauty of this program is also they don’t require you to change your processor. Minimum Credit scores start at 550 and this loan can be funded up to 20,000. Tax and Financial statement requirements are needed for funds requested over 5,000. This program also applies to restaurants so this can be real bonanza if you are having trouble raising capital at your local bank…

Finding available capital whether through leasing and working capital can be very difficult in today’s times. The cash merchant advances/loans can offer the seasoned business an unique opportunity to acquire funds without all the red tape conventional banks require..

Happy hunting for your financing…..

About the Author

J.M Luna has over thirty years in the financial field. This includes accounting and taxes, leasing, hard asset money and commercial loans. U.S Corporate Capital Leasing Group assists the start-up and the seasoned business for financing in all different industries.

“We see this occur a great deal,” noted Certified Turnaround Professional Thomas M. Vivaldelli, who is principal and managing director of Distressed Real Estate Solutions and has spent more than 25 years in turnaround, crisis management, restructuring and renewal of troubled businesses. “Often it is management who has tapped out its credit lines and not prepared adequately to survive seasonal downturns. They are on a treadmill keeping the business running by erratically plugging the challenging holes in their operation’s finances on a case by case basis in order to meet their recurring expenses such as payroll, loan payments, rent, etc.. What they have failed to realize is that they have a large debt-free cashable asset-one much larger than they perceive-waiting to be effortlessly tapped.”

He added that accounts receivable funding can be an excellent short-term bridge to returning a business to profitability by assisting in recapitalizing and reformulating a capital structure, or even repositioning a company to achieve an exit goal. The immediate cash infusion derived from accounts receivable funding provides companies, in both growth or survival modes, with significant leverage; it is an asset that is easy to quantify, unlike securities and real estate assets that have been devalued in the current market environment.

With such increased capitalization, Vivaldelli added that “companies that utilize accounts receivable funding effectively can realize increased sales in ways they never anticipated.” With this type of “self-funding”, he noted that companies can take advantage of a short-term method to enhance long-term relationships with customers, suppliers and even with traditional lenders that may not have before been possible. Because of a strong cash position, these companies are better positioned to 1)secure deep discounts from their vendors, 2) pass those savings onto to their customers, 3) help their customers finance their acquisitions (that they may not have been able to make without financing terms) 4) reduce costs by upgrading operations and do so by 5) building in the cost of accounts receivable funding within the terms of the sale.

“Accounts receivable funding works well as a indispensable tool in a war chest to help turnaround the capital structure of a company in eminent danger or as a dependable ally for companies poised for great growth,” he reported. “With this tool, companies can take charge to regain or significantly amplify their financial leverage with the immediate infusion of cash. By using some of the cash to reduce debt, a company increases its value for a potential sale or strengthens its ability to be bankable with a bigger line of credit and lower interest rates.”

According to Jim Beutel, Senior Vice President, Sales and Business Development for Sun Capital, Inc., it is frequently the companies that are too busy concentrating on fulfilling orders to keep their clients’ businesses running that neglect to accumulate their own cash flow fuel to keep their own businesses running. Then, one day they wake up, feeling really good about their customer service, but devastated by their financial position.

“Ironically, these are often companies that are flooded with a healthy stream of burgeoning orders, but cannot keep step with order fulfillment because they lack the working capital to support their overhead, including having sufficient staff on hand and purchasing the raw materials to produce their final products. They lack the cash flow needed to maintain inventory levels in order to deliver their products on a timely basis” Beutel added.

Accounts Receivable Funding Is A Multi-Trillion Dollar Financial Industry

Accounts receivable funding is a multi-trillion dollar financial industry that provides cash infusion to a wide variety of businesses of all sizes, including Fortune 500 companies and major government contractors. Business-to-business companies and government-related vendors that are not “cash and carry” businesses can qualify as long as an invoice is generated and a verifiable product or service is delivered.

Commercial companies and government contract vendors that meet the criteria for accounts receivable funding include manufacturers, wholesalers, importers, distributors, consultants, sporting goods and toy companies, commercial printers, communications companies, security companies, cable installers, hi-tech and related industries, personnel/temporary industry, and services organizations.

About the Author

Sun Capital is a nationwide, full-service, financial service company specializing in a variety of innovative services including commercial receivable funding, medical receivable funding and other non-traditional financial strategies.