New to Factoring?

For those who aren't familiar with factoring, it is basically a fast way to get cash to run your business.

Factoring is Not a Loan

When you send your customers an invoice, they usually have 30 days to pay you back. Factoring companies will give you the bulk of the cash up front, sometimes within 24 hours, and collect the payments from your customers themselves. Once the invoices are paid in full, you’ll get the balance left over, minus a small fee.


Factoring Doesn't Require Debt

Sounds simple enough – fast cash for your business – no loans, no debt.

So how do you go about choosing the best factoring company?

Not all of them are created equal. Not all of them will give you the same level of service you need to help grow your business.

Everyone claims they have the simplest rate structure in the industry, no long-term contracts, same day funding, no up-front fees, no monthly minimums or maximums, etc., etc., etc.

We also offer these same benefits, but we GO THE EXTRA MILE FOR YOU that other factoring companies don’t.

Here’s Why We Are The Factoring Company You Need For Your Duluth Business

No other factoring company matches our level of superior service and offerings.


As you can see, we simply have more to offer you.

Other factoring companies don’t even compare.
Duluth

And Not All Factoring Companies Can Say This:

More than half of our new business comes through client referrals.

Some of the benefits you receive with factoring are:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information for the city of Duluth

Duluth is a seaport city in the State of Minnesota and is the county seat of Saint Louis County. The fifth largest city in Minnesota, Duluth has a population of 86,128. Duluth is the second largest city on Lake Superior's shores, after Thunder Bay, Ontario in its Canadian border, and has the largest metropolitan area on the Lake. The Duluth MSA had a population of 279,771 in 2010, the second largest in Minnesota. The combined urban population of Duluth and its adjacent communities including Proctor, Hermantown, and Superior, Wisconsin totals over 131,000, based on 2010 census figures.

 

Situated at the westernmost point of the Great Lakes on the north shore of Lake Superior, Duluth is accessible to oceangoing vessels from the Atlantic Ocean 2,300 miles (3,700 km) away via the Great Lakes Waterway and the Saint Lawrence Seaway. Lake Superior is generally considered the largest freshwater lake in the world by surface area.Duluth forms a metropolitan area with Superior called the Twin Ports. The cities share the Duluth Superior harbor and together are the Great Lakes' largest port transporting coal, iron ore (taconite), and grain. A tourist destination for the Midwest, Duluth features America's only all freshwater aquarium, the Great Lakes Aquarium; the Aerial Lift Bridge, which spans the Duluth Ship Canal into the Duluth Superior Harbor; and Minnesota Point (known locally as Park Point), one of the world's longest freshwater baymouth bars, spanning 6 miles (9.7 km).

 

The city is also the starting point for vehicle trips along Minnesota's North Shore. The city is named for Daniel Greysolon, Sieur du Lhut, the first known European explorer of the area.Duluth is the major regional center for health care, higher education, retail, and business services not only of its own immediate area but also of a larger area encompassing northeastern Minnesota, northwestern Wisconsin, and the western Upper Peninsula of Michigan.

 

It is also a major transportation center for the transshipment of coal, taconite, agricultural products, steel, limestone, and cement. In recent years it has seen strong growth in the transshipment of wind turbine components coming and going from manufacturers in both Europe and North Dakota and of oversized industrial machinery manufactured all around the world and destined for the tar sands oil extraction projects in northern Alberta.

 

 

Information for the state of Minnesota

Once primarily a producer of raw materials, Minnesota's economy has transformed to emphasize finished products and services. Perhaps the most significant characteristic of the economy is its diversity; the relative outputs of its business sectors closely match the United States as a whole.

 

If you did not have to wait for the cash flow to come in what would you do right now?  

Each company has its own unique business needs, so some companies only factor invoices for customers that are slow in paying, whilst other companies factor all of their invoices. -Duluth Factoring Companies

 

 

I LOST THE UGLY BACKUP IN MY OUTSTANDING RECEIVABLES  

Duluth Factoring Companies Articles

Effective Ways for Small Businesses to Avoid Cash Flow Problems

 

Without steady cash flow most businesses will fail to thrive, especially small businesses and start-ups. We've all heard the phrase "Cash Is King" and that's certainly true for established businesses, but for new businesses just getting started cash flow is even more important. Sadly, many new businesses fail to realize just how devastating cash flow problems can be to a business trying to establish themselves in the market. In fact, many businesses die a sad and lonely death simply because of bad cash management, and these are businesses that would otherwise have survived had they not experienced cash flow problems. Statistics show that 82% of businesses fail because they were unable to manage their cash. That's a tragic figure, especially when there are effective ways for new, small, and even large businesses to avoid these problems.

 

So, let's take a look at some important rules that small businesses should be aware of to ensure they never have to face liquidity.

 

No. 1: It's Cash That Sustains Business Growth

 

So many businesses don't consider cash flow an issue because they see the orders flooding in; however, many growing companies do experience cash flow problems. Increased sales generally mean increased costs to deliver orders; plus, in order to support the new volume of business other sections of a business typically need to grow. Your business may appear to be highly successful as orders continue coming in, but keep in mind that the faster your business grows the more financing it will need.

 

No. 2: Margins Are Just Accounting - They're Not Cash!

 

We know that accounting, and accountants, can be pretty creative with figures because there's nothing shareholders and board members love more than hearing about the industry-leading margins you're achieving; but your board members and shareholders are not the ones who have to find the money to meet payroll and pay your landlord. Margins don't pay your employees. Your sales may be booked down when your customer's order is delivered, but how long will it be before you receive payment? 30, 60, 90 days, or even longer? If your customers are not paying you and you're struggling to pay your expenses, your business is now in survival mode. Keep in mind that you may have great accounting margins but still have an empty bank account.

 

No. 3: When You're Selling B2B (Business-to-Business) Cash Flow Problems Will Likely Be Your First Issue

 

The more sales you make the more money you make, but when you're selling B2B it's not always that simple. Yes, you sell and deliver goods or services to another business and provide them with an invoice, and your customer will pay the invoice at a later date. But how much later? If you chase the business too hard for payment they'll probably never work with you again, so you could receive payment months later. You're not going to pass up businesses who buy with high volume, so you have no choice but to wait. So, you end up with a cash flow problem.

 

No. 4: Cash Flow Problems Can Occur Very Quickly

 

It doesn't take much for cash flow management to become a serious problem, so monitor your cash flow very carefully. Determine how much of your working capital is locked into receivables, inventories, raw materials, and so on; and know exactly how much money is required to meet both your sales targets and operating expenses. You may have made the sales but that doesn't mean you have the cash, and you may have paid for inventory but that doesn't mean it's automatically a cost of goods sold.

 

No. 5: Your Inventory Ties up Cash

 

You can't sell your goods until you've purchased or built them and, whether your goods are sold or not, your vendor still expects to be paid. This means that your inventory is locking up your cash. You could eventually make two times or even three times your money on your inventory, but margins do not equal cash.

 

No. 6: You Must Be Practical About Working Capital

 

Working capital is the figure left over when current liabilities are deducted from current assets, which means it's the money you have in your bank account available for meeting operating costs, paying vendors, and buying inventory - all the while waiting for your business customers to pay your invoices. Understanding and grasping the concept of working capital is a very necessary survival skill in business because being able to maintain sufficient cash to pay your own financial responsibilities whilst dealing with all the unknowns in business can be very tricky.

 

No. 7: Be Clear on What "Accounts Receivable" Actually Are

 

The money owed to you by your customers is called accounts receivable, which means the money that's sitting in your customer's bank account that belongs to you is called receivables. Just like inventory, the amount of money in your accounts receivable column is money you don't have. Certainly, you've done the deal and you've sent the invoice, but now you're waiting to be paid. You must remain very vigilant until such time as the invoice has been settled and the money is physically in your bank account.

 

8. Monitor the Health of Your Business Very Closely

 

Three aspects of your business that require close monitoring include -

 

-Inventory Turnover: Measure how long your inventory stays on your balance sheet without being converted to cash;

 

-Collection Days: Measure how long it takes to receive payment for services rendered or goods sold;

 

-Payment Days: Keep a record of how long you wait before paying suppliers.

 

Now, make a plan. Project these figures out to 12 or 18 months ahead then compare your plan to what actually occurs. This is a really great way of gaining some insight into your own business.

 

No. 9: Prepare for Financing before You Actually Need It

 

Don't wait until you need financing to start reaching out to finance companies. Contact companies who provide financing, especially credit line financing, and look for products where interest is not payable if the money is not used. Don't wait for your business to have cash flow issues. Waiting until you urgently need cash or a loan will subject you to higher interest rates and dodgy terms. Start the process while your business is healthy, which will allow you to negotiate finance terms from a position of strength. We strongly suggest you be proactive and find a partner ready to finance your business; a partner that's prepared to grow with you.

 

 

If you did not have to wait for the cash flow to come in what would you do right now?

 

 

Duluth Factoring Companies Articles

Financing Temporary Staffing Agencies

 

In recent years temporary staffing agencies have become very profitable, because the current business environment prefers to outsource employees rather than hire them. This situation creates a very attractive and viable opportunity for temp staffing agencies. But, similar to other businesses, in order to operate a successful temp staffing agency, working capital is an absolute necessity. This requirement of working capital has become a problem for most agencies who often suffer from a cash flow crisis. Having adequate cash flow prevents the company from being run effectively, thus stopping the company from adding new clients. The result is that the business fails to grow. Fortunately, there is a solution to this problem, and the solution is the right type of financing.

 

Payroll and Bills Must Be Paid on Time!

 

The most important and probably the biggest expense of any temp staffing agency is employee payroll. Obviously, employees expect to be paid regularly and on time, and if this is not the case, they'll quickly move on and find work elsewhere. In addition, the agency needs funds to pay for other employee-related expenses, such as employment taxes. When a business fails to comply with tax regulations the costs involved can be extensive and can the even put the business itself in jeopardy.

 

Business Growth Is Impossible without Funds

 

Generally, Government and commercial clients pay their invoices somewhere between 30 and 60 days, and it's this timeframe that creates problems for temp staffing agencies. When an agency takes on a new client, before they start getting paid, the agency must be able to pay the employee's salary for up to two months.

 

This means that the only way to grow a temp staffing agency is to have a cash reserve to pay for running expenses. If you don't have a reserve of funds, then you can't take on new contracts; and if you work with larger contracts you need a larger reserve. And this is where it becomes a vicious cycle, because if you can't take on new contracts then business growth is impossible.

 

Payroll Funding: Helping Your Business Grow

 

Fortunately, there is a solution available for temp staffing agencies to resolve this very common financial problem, and it's known as Payroll Funding, or Payroll Financing. Payroll Funding is a solution that's been designed to help staffing agencies access much-needed working capital.

 

Payroll financing is actually a type of Invoice Factoring, allowing you to finance your slow-paying receivables. This type of funding provides your temp staffing agency with immediate funds. Now there'll be no more waiting for your Government and commercial clients to pay in 60 days - the payroll funding company will pay you within a day or two! Now you'll have the working capital your agency so desperately needs to meet payroll and other expenses; and now you can move forward and grow your business without constantly worrying about slow paying clients!

 

How Does Factoring Work?

 

Factoring is a very straightforward process. Basically, invoices are financed in two separate payments, with the first payment covering approximately 90% of the gross invoice value, and the second payment, which is the remaining 10% less factoring fees, is remitted to you once your client has paid. The first payment is paid into the temp staffing agency's bank account very soon after the invoice has been submitted for financing. In the meantime, your clients are not required to pay any sooner - they simply pay on their regular schedule.

 

Payroll Funding Is Available to Small Agencies

 

One huge advantage of factoring is that it's available to small agencies (even start-ups!) that don't have many assets. Because it's the invoices which are the assets the factoring company is financing, it's the credit quality of your customers that the factoring company is most interested in. Factors can only finance invoices if your customer (the payer) has good commercial credit, and that's why factoring has become a very viable and attractive option for both small and growing agencies whose greatest asset is their good clients.

 

Growing Your Agency with Factoring

 

Let's take a closer look at how your temp staffing agency can use invoice factoring to grow your company. We'll assume for the purpose of this article that you have a new client who requires six full-time employees for a few months. This new client is a large corporation and has a good reputation. The problem with this corporation, however, is that they pay their invoices in 50 days, and there's no way you can afford to carry the cost of the contract.

 

What's the solution? The solution is actually quite simple: you invoice the client weekly and factor the invoice! This funding strategy allows you to service the contract by providing your agency with weekly funds to pay employees. Providing you have clients with good credit and your agency provides good services, receivables factoring can be used very effectively to grow your business.

 

When factoring is used properly, it can help grow your temp staffing agency well beyond its current financial capabilities.

 

 

 

 

 

 

Duluth Factoring Companies Articles

Business Is Great, but Our Company's Cash-Strapped!

 

There comes a time in the life of most businesses when cash flow becomes a problem, and it's not just during difficult times that this occurs. There are so many different reasons why businesses may need an injection of cash, like sudden growth, or perhaps wanting to purchase new equipment or service bigger clients. Every business at one time or another will require urgent funding to sustain or grow their business.According to research, many small and medium-sized businesses are failing, certainly not due to lack of sales, but solely because they're unable to meet their short-term financial obligations. Considering the time, money, and personal investment that goes into the creation of every business, the failure of a business to thrive has become a heartbreaking reality for many people. Why would a profitable and growing business find itself in financial trouble? The answer is very simple. When just one or more of your larger accounts hold off on paying their accounts for perhaps an additional 60 or 90 days, you've now got a cash flow problem.

 

Running Out of Funding Options?

 

When experiencing cash flow problems, business people typically depend on conventional lending sources for a corporate line-of-credit, and many find themselves applying for short-term bridging finance. And how many business owners admit to using their personal credit card to pay for business-related expenses? However, there are times when traditional methods of funding are no longer available, leaving the acquisition of extended financing a frustrating and sometimes impossible task.

 

Fortunately, there's a viable alternative today, one which has been around for a long time but one that many businesses are not fully aware of. There's now a way for businesses to avoid cash flow problems and continue growing their business from strength to strength, even during difficult times. Factoring, also known as Accounts Receivable Financing, Asset Based Lending (and various other terms) is an alternative form of financing, designed to help businesses through periods of expansion and business growth. Factoring has quickly become a very practical and workable financial solution for many businesses, and more and more we're seeing businesses from different industries look towards factoring to resolve their cash flow problems.

 

How Does Freight Factoring Work for Trucking Companies?

 

Basically, a business with creditworthy accounts receivables can use factoring to receive an immediate injection of cash on those receivables. Factoring companies will typically say yes when a bank says no, thus providing a business with a much-needed cash injection. The process of factoring is actually quite simple. Your trucking company needs cash, and because you have quality accounts receivables your chosen factoring company will purchase any number of those receivables and immediately provide you with cash - anywhere up to 90% of the value of your invoices. Once your customer has paid the factoring company the total amount of your invoice, the remaining balance will be forwarded to you - less the agreed-upon fees.

 

A good factoring company will respond quickly to its trucking company clients and provide them with personalized and professional attention. With freight bill factoring, a trucking company will always have its cash needs satisfied with cash flow. It may be true that, when compared to other means of lending, factoring is more expensive, but borrowers report that the benefits they receive far outweigh the cost.

 

Freight Bill Factoring Is Not A Loan

 

Perhaps the greatest advantage of invoice factoring is the fast turnaround time because, unlike banks, there's no loan approval process with factoring. This means that business owners of trucking companies can receive cash in-hand on the same working day! In order to be approved for freight factoring a trucking company must have creditworthy customers and have a good reputation; however, once approved for freight factoring the process of receiving funding is quite automatic. Cash advances will be made on the same day, and it's important to note here that future financing is only limited by the value and number of receivables involved.

 

Freight Bill Factoring Is Very Popular with Trucking Companies

 

In the last decade many trucking companies have taking advantage of freight factoring, mostly because it's a great alternative to bank financing. In fact, freight factoring is often recommended by trucking companies financial advisers or accountants. We know of many cases where freight bill factoring is solely responsible for trucking companies being able to accept and process orders from customers that otherwise would have declined due to a lack of financing. Freight bill factoring has saved many companies from severe financial crisis, and even bankruptcy.

 

It's now very clear that freight bill factoring is playing a very important role in today's business environment. This type of financing allows trucking companies to increase loads, expand their customer base, and even survive a seasonal slump. The truth is that freight bill factoring works, and it works well!

 

 

 

 

Duluth Factoring Companies Articles

Factoring Companies - Benefits

 

Factoring companies offer a wide variety of benefits to businesses. Factoring companies conduct financial business by allowing a business to sell its invoices to a factor (also known as a third party business or individual.) The price that the business charges is discounted in order to sell the invoices that are currently held, and make the cash that is immediately needed for any type of expenditures involving the business. A business that has immediate cash needs, but has no cash to pay for the expenditures that has occurred often ends up going under and eventually shutting down completely. This takes a lot of jobs away from people, and can leave you working for someone else, no longer running for your business. No one wants to take this large step down from the current place that they are in. A business owner has worked incredibly hard to get to where he or she currently is, and does not deserve to have their business become obsolete. This is where the factoring companies can be a huge help to businesses.

 

Invoice FactoringKeep in mind that factoring companies do not use the same process as invoice discounting. Instead, invoice factoring (also called the "Assignment of Accounts Receivable" by the FASB and GAAP) is the sale of invoices, instead of invoice discounting which involves collateral in order to ensure that the individual who took out the invoice discounting loan will pay it back. Factoring is not a loan; instead, factoring is the sale of invoices in order to get immediate cash. There is no loan in the process of factoring, and you will never have to pay the money back.

 

Since the invoices that are sold are also called receivables, the entire process of factoring is usually called the sale of receivables. Receivable factoring is much better than trying to take a loan out from the bank. Banks charge interest on any type of loan, and although there is usually collateral, it can put you in even more debt than you currently are. In addition, factoring companies are never going to give you a loan. When a factoring company funds your discounted receivable, he or she will choose to buy the receivable, giving you cash immediately. This cash can pull your entire business out of the hole that it is currently in. Instead of taking a loan out and getting yourself further into debt, factoring allows you to simply sell your own invoices and get back most of the money that you originally put into them. Although this may seem like a bad process since you are selling valuable invoices, it is important to do, as the invoices are completely useless if your entire business goes under. Instead of trying to take a loan out to keep all of your receivables (invoices) factoring companies benefit you directly by giving you the cash you need.

 

Benefits of Factoring Companies / Invoice Factoring / Receivable FactoringWhen you are in a bind and really need money in order to get through the next few months, it can be very troublesome. Although the first thought in most peoples' minds would be to visit the nearest bank as soon as possible and take out some kind of loan, this is very dangerous. Although the loan may hold your business over for the next few months, it is simply delaying the same money crunch you already had. Unless your business is making an incredible amount of money, the bank loan that you took out has increased in the price that you must pay bank. Interest on a bank loan is how the banks make money and survive. Many loans have a very high interest rate, and if you are unable to pay the loan back in a short amount of time, you are going to be in more of a money crunch than you originally were in. In order to pay back the loan, you would have to make a large amount of money in a very short time, which is unlikely if you needed to take out the loan in the first place.

 

Rather than bothering with bank loans that will inevitably put you back in the money hole that you were in when you took it out, factoring companies are available to help you. A factoring company is a place where businesses can place their invoices for sale at a discounted price, which will allow them to receive immediate cash. As aforementioned, this money does not need to be paid back, as it is not a loan. Keep in mind, you are not selling your business. You are selling invoices in order to keep your business growing. You will be able to get more invoices in the future when your business is back up and running, but if you do not sell these invoices, you will never be back up and running.

 

When you are in a money crunch, don't put yourself back in the money hole that you are in by taking out a bank loan. Utilize factoring companies in order to get immediate cash that will help you get back up and running without putting a loan on your business.

 

 

 

 

 

Duluth Factoring Companies Articles

Small Business Invoice Factoring: The Clever Choice!

 

Many small businesses are discovering invoice factoring and quickly realizing this was a very smart business choice! Why? Because small business invoice factoring converts receivables into immediate cash!

 

The Ideal Alternative to Traditional Bank Loans

 

Small businesses are discovering that invoice factoring is the perfect, and much easier, alternative to traditional funding sources, like bank loans and cash advances. Any small business who sells to the government or other companies can use invoice factoring to enjoy the many benefits of accessing immediate cash flow. Whether you've applied for traditional funding and been refused or applied and are still waiting to hear if you've been accepted, keep in mind that small business invoice factoring is a very viable option for you.

 

How Does Invoice Factoring Work for Small Businesses

 

One of the major benefits of small business invoice factoring is that it's the credit worthiness of your customers that determines the funding decision. This means that if you're a business who sells to the government or other businesses with good credit, you're the perfect candidate for small business invoice factoring.

 

Applying for invoice factoring is a very simple process, and you certainly won't be forced to wait weeks, even months, for a decision as you would with traditional funding sources.

 

Why Small Businesses Are Choosing Invoice Factoring

 

Many businesses are only just learning about invoice factoring, even though factoring has been around for a long time. Any business owner who has applied for a bank loan knows only too well that, to start with, the application process can take months, and secondly, there's still no guarantee you'll be approved for finance.

 

According to the Small Business Administration, in the first quarter of the year 2015 small business loan approval rates at banks were 22%, and at credit unions it was 43%. The limit on business credit cards is often capped at less than $100,000, which is often not sufficient to cover unexpected expenses or large projects.

 

Invoice Factoring: The Smart Alternative to Traditional Lending

 

Today, small business invoice factoring has become the smart alternative for many business owners because factoring provides an immediate cash advance, with no restrictions placed on the money received. It's also important to note that factoring is not a debt, which means there are no limitations on how you choose to use the funds received.

 

Yes, small businesses can access quick money with a merchant cash advance, but there's always a high cost involved. You'll soon discover that the cash advanced will cost your business more than 70% effective annual interest. Alternatively, cash advance lenders demand daily repayments with full payment due in just a few months. The demand for daily payback can destroy a small business, but sometimes business owners are left with no choice.

 

So, let's take a quick look at just some of the benefits of small business invoice factoring, and once you read through this list we're sure you'll think of more benefits to your own business.

 

With this immediate cash advance you'll be able to -

 

- Employee new staff members

 

- Easily meet payroll

 

- Accept larger orders from bigger customers

 

- Invest in marketing and sales

 

- Expand manufacturing and production

 

- Your business will be able to weather cash flow cycles and seasonal sales periods

 

- Pay down any existing debt

 

- Take advantage of early pay discounts from your suppliers (these discounts often cover your factoring fees)

 

- Extend your customers' payment terms

 

- Provide a smooth cash flow to support daily business operations

 

- Overheads are lowered due to reduced administration expenses

 

- Your business will be self-financed during rapid growth periods, without having to give up equity.

 

As you can see, the benefits of small business invoice factoring are many and varied, so why not contact us today and let's talk business!

 

 

 

 

 

Duluth Factoring Companies Articles

The Difference between Accounts Receivable Financing and Factoring

 

Today, it's not as easy for businesses to access finance as it was in past years, and more companies are being forced to look for alternative, non banking financing options in order to access the capital they require to help their business grow.

 

Two of the more popular tools available to cash strapped business owners are Accounts Receivable Financing (A/R Financing) and factoring. Some business owners believe these two are the same, but there are, in fact, some small yet significant differences.

 

What Is Factoring?

 

Factoring is when a commercial finance company, also known as a factor or factoring company, purchases a business's outstanding accounts receivable. At that time, the factor will typically advance the business somewhere between 70% and 90% of the invoice's value. Then, once the invoice is collected from the customer, the remaining balance - minus a factoring fee - is released to the business. The factoring fee could range from between 1.5% and 5.5%. It's calculated on the total face value of the invoice and depends on how many days the funds are in use and other aspects, like the collection risk.

 

When a business has a factoring contract they can usually choose which invoices they want to sell to the factor: it's not generally an all or nothing process. Once the factor has purchased an invoice they become responsible for managing the receivable until the account has been paid. Essentially, the factor becomes the business's accounts receivable department and credit manager, analyzing credit reports, performing credit checks, mailing invoices, and documenting payments.

 

What Is Accounts Receivable Financing?

 

Accounts Receivable Financing is more similar to a traditional bank loan, however there are some key differences. Bank loans are secured with collateral; which might be real estate, the business owner's personal assets, or plant and equipment; whereas Accounts Receivable Financing is backed by the business's assets related to the Accounts Receivable. When a business has an Accounts Receivable financing agreement, a borrowing base is established at each draw against which the business is able to borrow money: this would typically be between 70% and 90% of the qualified receivables.

 

Between 1% and 2% is typically charged as a collateral management fee against the outstanding amount, and interest is only calculated as and when the money is advanced. An invoice must be less than 90 days old in order to count towards the borrowing base, and the finance company must deem the business credit worthy. There may also be other conditions to fulfil.

 

So, you can see that there are many similarities between Accounts Receivable financing and factoring; however, one is the sale of an asset (receivables or invoices) to a third party, while the other is actually a loan. In many ways, though, they do act similarly. Below we've listed the main features of each so you can determine which would be the best fit for your company.

 

Accounts Receivable Financing

 

' Generally, Accounts Receivable Financing is not as expensive as factoring;
' It can be easier to move from this type of financing to a traditional bank line of credit once a business becomes bankable again;
' Typically, a minimum of $75,000 per month is required in sales to qualify, so this type of financing may not be available to small companies;
' Due to the fact that the business will be required to submit all of its Accounts Receivable to the finance company, this type of financing can be less flexible than factoring.

 

Factoring

 

' It's quite easy to qualify for factoring, and factoring is the ideal solution for start ups and financially challenged companies;
' Because businesses can decide which invoices they want to sell to the factor, factoring offers more flexibility than Accounts Receivable Financing;
' The company is able to track total costs on an invoice by invoice basis because factoring has a simple and straightforward fee structure.

 

In Conclusion

 

Today we see both Accounts Receivable Financing and factoring as traditional sources of financing; effective when traditional bank financing is not an option. Factoring can carry a business through a period when an immediate cash input is required.

 

Somewhere between 12 and 24 months most companies are generally able to repair their financial situation and once again become bankable. However, some companies in certain industries continue factoring their invoices indefinitely.An example of this is the trucking industry, which relies heavily on factoring for cash flow injections.

 

 

 

 

 

Duluth Factoring Companies Articles

Benefits Of A Factoring Company Over A Traditional Bank Loan

 

Anyone who owns a business knows that there are times when the money goes out of your business much faster than it is coming in. This can put a company in a financial bind, making it difficult to purchase raw materials, pay their employees, or even keep the utilities on. The simple truth is that every company needs to have ready cash in order to keep their business running on an even keel and in order for it to grow. There are a number of different ways that a company can get the money they need to keep their business running and moving forward, but not all of these ways offer businesses the same freedom and benefits. This article will talk about two popular, but different types of financing available to business. The Traditional bank loan, and getting your financing through a factoring company.

 

Bank Loans

 

Bank loans are an extremely traditional way for a business to get financing. While these loans are handy they are not available to every business. For example, a fairly newly established business simply may not have the assets to readily get a loan from a bank, even if they do, the standard collateral for a business loan is the business itself, which means that if you cannot make your loan payment, you risk losing your entire business. In addition, while you apply for a certain loan amount, that is all the financing you are entitled to. Once the loan is paid off, you can then apply for another loan if the need arises.

 

Factoring Companies

 

Factoring companies do not give loans, and the money you get from the factoring company does not put you in debt. Rather the financing you receive from a factoring company is based on money your business has all ready earned, but have not yet received. Factoring companies actually purchase your account's receivable or at least part of them for a percentage of their total worth, Normally around 80%-95%. The amount of money you can receive is based on the amount of money you have earned and the accounts receivable you are willing to "sell." Once you have set up factoring account it continues as long as you wish it too and the amount of money available to you even can grow as your business grows, giving you the ready cash you need to meet your own obligations.

 

Benefits of a Factoring Company Vs. A Bank Loan

 

While not every business can take advantage of factoring account financing (you have to have a business that has account receivables) for those that can use this type of financing there are several distinct benefits.

 

1. You Won't Incur Debt. Since the factoring company actually buys your accounts receivable you don't actually incur debt like you do with a bank loan. This has many benefits including the fact, that this type of financing won't affect either your business credit rating or your personal credit rating. Should the unforeseeable happen and your business fails, you won't have to worry about anyone coming after your personal as well as your business assets to pay off a loan. With a bank loan, the debt goes onto your credit report, and even one late payment can adversely affect your businesses credit, and even the ability to get insurance and may even reflect upon your personal credit rating.

 

2. No Collateral Required. Another benefit of using a factoring company instead of a traditional loan is that you aren't required to provide collateral to the factoring company in order to secure financing, because the company "buys" the accounts receivables; not loans you money based on them. In addition, while the factoring company does run a credit check on your customers whose accounts receivables are offered for financing, the state of your credit is not an issue. This makes it easier for fledgling businesses to get the financing they need through a factoring company (as long as their accounts receivables are in good order) then from a bank, who may not feel that you have been in business long enough to be worth the risk of issuing you a loan.

 

3. Receive Your Money Faster. With a Factoring company you can actually get the money you need faster. Once the Factoring company assures itself that the customers in your accounts receivable are likely to pay their debt, the money is usually in the account within 24 hours. With a bank, there are vasts amounts of paperwork, then the loan has to be underwritten, which can take months before you actually see the loan if it is approved.

 

4. Interest is Paid Up Front. Unlike a bank loan that continues to build interest that you have to pay the entire time you have your business loan with a factoring company, you don't have to continue to pay interest as they take it right off the top, deducting it from the total amount of accounts receivable. So not only are you relieved of those monthly loan payments, but you also don't have to worry about the building up of interest, as every penny in the account is yours to spend on the business.

 

As you can see, there are several benefits that makes considering financing through a factoring company over a traditional bank worthwhile. However, there are also a couple of other benefits that a factory company can offer your business is far beyond the scope of the bank. The most important benefits is that once you sell your accounts receivable to the factory company, you don't have to take time away from running your business to collect the money owed from reluctant to pay customers. The factoring company takes over that chore, since it is now their money to collect. Factoring companies are very good at collecting these debts, saving you the time and effort that you need to devote to your growing company.

 

In addition, since the factoring company evaluates the credit quality of your customers prior to purchasing the accounts receivable you gain valuable information into which customers are likely to pay and which ones are not so likely to pay.

 

While a Factoring company is not the only way for your business to obtain the money it needs to keep growing, it does offer a type of financing well worth considering.

 

 

 

 

 

Duluth Factoring Companies Articles

Payroll Funding: The Perfect Solution for Financing a Temp Staffing Agency

 

Many people run very profitable temp staffing agencies. Today's business environment lends itself very nicely to outsourcing employees instead of hiring them; thus providing staffing agencies with very attractive financial opportunities. But, like all other businesses, temp staffing agencies require working capital. In this industry, accessing capital can become a serious problem and many agencies struggle to meet their own financial obligations. In addition, business growth suffers because the agency is unable to add new clients. Fortunately, there is an answer to cash flow problems in temp staffing agencies.

 

Payroll: The Biggest Expense for Temp Staffing Agencies

 

Perhaps the most important expense, and often the biggest expense for a temp staffing agency, is employee payroll. It's vitally important that employees are paid regularly and on time. Failure to cover payroll will result in your employees leaving and seeking work elsewhere.

 

Of course, there are other financial obligations to be met by the temp staffing agency, such as paying employment taxes. Failure to meet tax obligations can become a costly and serious legal issue for agencies, with the result that businesses begin to struggle.

 

All Businesses Need Funds to Grow and Prosper

 

Most clients (both commercial and government) settle their invoices within 30, 60, and sometimes 90 days, and it's this lengthy period of time that creates financial issues for staffing agencies. Once a staffing agency has accepted a new client, it must be capable of covering the employee's wages for a period of up to 2 months - and this is before the agency itself starts being paid. So, in order to meet operating expenses, it becomes imperative that the staffing agency has a substantial cash reserve. And, the bigger the contracts the bigger reserve required. Without this reserve, the agency won't be able to accept new contracts, and without new contracts there can be no growth. What a vicious cycle! And it all comes down to cash flow.

 

Grow Your Temp Staffing Agency with Payroll Financing

 

Today there's an easy way to resolve cash flow problems experienced by so many businesses. It's called Payroll Funding, and it's a solution that's been designed specifically to assist staffing agencies access much-needed working capital.

 

What Is Payroll Financing?

 

Payroll financing is just one type of invoice factoring, and invoice factoring is a financing solution designed to help businesses finance their slow-paying receivables. With payroll financing your agency will receive immediate funds. No waiting 30, 60, or 90 days to receive payment from your government or commercial clients because you'll receive a payment from the factoring company within a day or two of receiving your invoice. Sounds too good to be true, doesn't it! Well, it is true, and it works very well for many businesses in many industries.

 

Factoring works because it provides the much-needed working capital required to cover payroll and other running expenses. Now you don't need to stress about slow paying clients; you can still meet your financial obligations and continue growing your business

 

How Factoring Works

 

Invoice factoring is a very straightforward process. Basically, your invoice will be financed in two payments. The first payment you receive will cover approximately 90% of the total value of your invoice, and your agency will receive this payment once you've submitted the invoice for financing. You'll receive the remaining payment, typically 10% less factoring fees, once your client has paid their account. It's important to note that your clients will still pay on their regular schedule; they're not being asked to pay any sooner.

 

Payroll Funding Is Available to Small Agencies Too!

 

Don't be concerned that your agency may be too small to be accepted for payroll funding. This is one of the great advantages of factoring; that it's available to businesses of all sizes, even start-ups. The reason for this is that factoring companies are more interested in the credit quality of your customers, because the factoring company is financing the invoices, which are the assets. When you apply for factoring, the factoring company will confirm whether (or not) your clients have good commercial credit, because this is what will determine if the factor is prepared to finance your invoices. So, if your temp staffing agency has reliable-paying customers, your business is an ideal candidate for payroll financing. You can see, therefore, that factoring becomes a very attractive financing option for agencies with a strong lineup of clients.

 

Grow Your Agency with Payroll Factoring

 

In case you're still not entirely clear about payroll factoring, let's have a look at a hypothetical example

 

Let's say you can't afford to grow your temp staffing agency because you're experiencing cash flow problems. A new client has just contacted you and requested 5 full-time employees for a 6-month period. This new client is a relatively large company with a good reputation. Unfortunately, though, you can't afford to carry the cost of this contract because they wait 50 days to pay their invoices.

 

The solution: You'll invoice this new client weekly and factor the invoice. By factoring the invoice you'll receive weekly cash advances, which means your agency can both service the new contract and continue paying your employees in a timely manner. Providing you're servicing reputable clients with no credit issues you'll be able to use receivables factoring to continue growing your agency. Besides resolving immediate cash flow problems, payroll factoring could be the catalyst for growing your business well in excess of its current capabilities.

 

 

 

 

 

Duluth Factoring Companies Articles

The Advantages of Trucking Factoring for Trucking Companies

 

Around the country, many owners of small trucking companies are running into the same problems when trying to expand their business. While the trucking business can be quite lucrative, it can take many weeks or even months to finally get paid on hauling invoices. This puts trucking companies in a real bind by having to play catch-up while trying to pay bills and salaries of their drivers.

 

We caught up with Jason Kind, an owner of a small trucking business that he created just a few years ago. Like many trucking owners, Jason was trying to expand his company to meet the needs of his clients, but was running into money issues that were holding him back. We asked him about his situation, the challenges he faced and how Trucking factoring played a real role in helping his company to expand without being burdened by paying back high interest loans.

 

Jason, it's good to have you with us.

 

Jason Kind: "Thanks, I appreciate being here."

 

Tell me a little about your trucking company and how it got started.

 

JK: "I had been driving trucks for years when in 2011 I decided to start my own trucking business. I went through the loan process, purchased a couple of trucks and got started. At first, it was really exciting because I had made a few connections as a driver and I picked up some early business. It seemed like everything was starting to snowball as I was getting requests from other businesses, but I was running into a cash problem."

 

It seems rather strange that being successful was causing you to be short on cash?

 

JK: "I know. You see in the trucking business we charge invoices which means that it could take weeks or even months before the cash would roll in. A typical invoice takes anywhere from 45 to 60 days before the payment comes through. Here I was getting offers from other businesses and I didn't have the cash on hand to buy trucks and hire drivers."

 

So, what did you do?

 

JK: I'll admit I was at my wit's end because I thought by the time I had the cash to expand that the interest would dry up first. I didn't want to take out another loan because I would just be putting off that debt until later and I had nothing to sell or any additional way to make more money. It was around that time when I heard from one of my friends in the trucking business about Trucking factoring."

 

What exactly is Trucking factoring?

 

JK: "Well, Trucking factoring is a way for trucking companies like mine to get paid quickly for the loads we are hauling. Instead of having to wait weeks or even months sometimes to get paid for hauling, Trucking factoring lets us get money right away for the work that we've done."

 

How does Trucking factoring work?

 

JK: "Well, there are companies out there who are willing to purchase the invoices that trucking companies like mine get when we perform a job. I managed to find a good, reputable company that actually purchases the invoices we get after performing a job along with other bills that we charge in our business. In return, they pay us cash that I not only use to cover my payroll, fuel costs and expenses, but I was able to put back enough money to purchase another truck a lot more quickly than if I had simply waited for the invoices to be paid."

 

It seems like you stumbled on a pretty good deal when it comes to Trucking factoring. Are there any other benefits that you've enjoyed by using this service?

 

JK: You bet, because the invoices act as the means to pay the company. It is not a loan where I have to pay back any money. The Trucking factoring company simply takes a very small percentage off each invoice or bill as their fee and I get the rest in cash right away. It's really worked out for me because not only was I able to get the cash needed to expand my business I was able to pay off my original loan a lot more quickly as well.

 

In fact, I was able to leap onto new business offers more quickly because the Trucking factoring allowed me to start purchasing new trucks and hire drivers months before I could even consider doing that simply waiting on the invoices.

 

This Trucking factoring sounds almost too good to be true, surely there must be a catch somewhere?

 

JK: I'll admit, I was a little skeptical at first, but it's all pretty straightforward. The Trucking factoring company I use didn't even charge me a sign up fee nor did they sign me to any long term contract. I just took a few minutes with them to set everything up and when I turn in an invoice, they pay me cash right on the spot.

 

You said you didn't have to sign any long term contracts. Are there a minimum number of invoices or amounts that you have to turn in each month?

 

JK: Actually, no. When I first started with them I was turning in practically all of my invoices so I could generate some cash up front. Now, when I need some cash to pay off bills or make quick purchases, I go to the company with my invoices. Some months I've turned in quite a few invoices, other months not so much.

 

It really sounds like you found a great deal in Trucking factoring?

 

JK: You bet. I have even used their fuel advances and discount cards to help me save money which really helped out in the first year of my business. I've had other trucking owners call me up and ask me how I was able to expand my company as fast as I did. I tell them all the same thing, if you have invoices, then Trucking factoring is the way to get fast cash without having to take out loans or put yourself in a deeper hole.

 

Jason's business continues to grow and Trucking factoring was a big reason why he was able to expand so rapidly. If your trucking business is short of needed cash with invoices that have yet to be paid, then you should consider Trucking factoring as a way to put money into your hands right away.

 

 

 

 

 

 

Duluth Factoring Companies Articles

How Factoring Saved A Staffing Agency

 

The Bellosa Temporary & Permanent Hiring Agency has been experiencing a major uptick in business since the unemployment crisis began. The unemployed and underemployed workers have been keeping the phones ringing. The staffing agency is also fielding a lot of calls from employers too, looking for just the right hire. Company President and Vice President, Laurie Bell and Ted Stevens, have not experienced a boom in business since they first opened the doors in 2009, during the recession. They had an idea then that this would be a profitable venture.

 

The mantra that Laurie and Ted live by is that there "s always going to be people searching for work and of course employers will always be on the lookout for good workers. This is especially true in healthcare staffing, the industry they specialize in. This seemed to be a safe bet for them as they embarked on this venture, but with any small business, the only way to keep the doors open is to keep pressing forward and out perform the competition.

 

In a relatively short period of time Laurie and Ted had built a nice sized business, they were able to hit the ground running with some brilliant marketing programs and a number of contracts from insiders. They grew rapidly, the timing couldn "t have been better and they were very lucky in this aspect. By the fall of 2011 Laurie and Ted had weathered some ups and downs but they did have some solid clients like a few big insurance companies and a university hospital close by. These clients always paid their invoices on time. But they did start to notice a decrease in accounts receivables from some smaller clients such as rehab centers and private practices.

 

As winter approached they recalled previous winters and holiday seasons and realized that accounts receivables usually did slow down during this time. Laurie and Ted made the decision to delay their late payments until after the New Year. This plan didn "t really appeal to them as it "s no way to start a New Year, but they seemed to have no other options.

 

When New Year "s had come and gone they realized that their Accounts Receivables had gone from 30 days past due to 60 days past due. Before meeting with their accountant Scott, they "d decided something had to be done, but they didn "t know what.

 

Sitting in the conference room with Scott they listened as pulled all the figures up on his iPad saying,“Okay you two, I "ve been looking over the files you sent over and I can certainly see why you "re worried about your late A/Rs but there may be a way to fix this. Do either of you know what factoring is?” Scott inquired.

 

Laurie and Ted looked at each other quizzically, and then Laurie said “I think it rings a bell, but I "m not really sure. Can you explain it?”

 

Scott began laying out the details, “You are sitting on a pile of invoices that are past due. The more time that goes by without them being paid, the bigger the bind this puts your business in. It makes it very difficult for you to grow, much less hire anyone new. If you don "t have enough cash coming in . ”

 

Ted interrupted with, “Then it could make it difficult to take on any new business because we wouldn "t be able to hire the additional personnel we need and meet our weekly payroll. We need an inflow of cash and we really can "t wait. If we have to wait any longer on these invoices we "ll be in trouble.”

 

Scott jumped in saying, “And this is precisely why I wanted to discuss factoring with you. The factoring company will purchase the invoices you are sitting on that are up to 3 months late, which gives you the cash you need now.” He then showed him a chart on a piece of paper he placed in front of them.

 

Laurie began to carefully scrutinize it asking, “Is this the fee schedule?”

 

Scott answered, “Yes it "s all right there. The factoring company makes 1% to 3% of the total amount of each invoice they purchase.”

 

“That "s sounds like a good deal to me”, Ted said.

 

The three of them sat there and talked this over for a while and then Laurie and Ted made the decision to go forward realizing this was the best way to keep them afloat. They knew if they couldn "t accommodate all the new clients they were acquiring the competition would get them and they would go down, they could just not afford to turn any business away.

 

They now needed to fill out an application and submit it to the factoring company and they also needed to show them a few back invoices, undergo a credit check for their company. Credit checks would also need to be done on the companies owing the debts that the factoring company would be purchasing.

 

It didn "t take long for Bellosa "s credit to be approved and the creditors " as well. Before long the factoring company purchased the overdue invoices and Laurie and Ted got the influx of cash they needed to cover things and allow them to continue growing their business.

 

The next time Laurie and Ted met with their accountant Scott, there were smiles all around.Scott said, “I "ve taken a look at your books so I know that factoring was the right solution for you.”

 

“It worked perfectly”, Laurie stated and went on to say, “The tiny amount we paid out for this influx of cash was certainly worth it.”

 

Ted chimed in with, “Without a doubt! Whatever the fees were we made back and more since we were now able to hire more personnel so we could take on more business. It worked out for us and for them I would say!”

 

“That "s what "s great about factoring!” Scott exclaimed with a look of satisfaction on his face.

 

 

 

 

Duluth Factoring Companies Articles

The Basics of Trucking Factoring

 

Whether you're the owner of a 50-truck fleet or an independent owner/operator, we all know that controlling your cash flow is vitally important to growing your business. Perhaps like many business owners you've become pretty clever at making creative use of your credit cards, because it's certainly preferable to going to your banker and begging for a business Line of Credit! Fortunately, there is another viable option for owner-operator businesses and small trucking fleets. The answer to the age-old cash flow problem is Freight Bill Factoring!

 

If Freight Bill Factoring is an unfamiliar term to you, then here's a brief explanation:

 

Freight Bill Factoring is the simple process of assigning your unpaid freight invoices to a third-party company (factoring company) for an amount that's less than you would receive if you were to bill your customer direct. The bonus of Freight Bill Factoring is that it enables you to get paid almost immediately upon completion of a run, thus giving you access to much-needed cash required for the day-to-day running of your business operations.

 

Here's a step-by-step explanation of how Freight Bill Factoring, or Trucking Factoring, works :

 

Once you've booked a load, you immediately email or fax details about the load, your customer, and your rate confirmation to the factoring company;
The factoring company will quickly respond by advising if that particular customer has been approved for load factoring;
You pull the load;
When the load has been delivered, you email or fax your load-related documents, including the Bills of Lading, to the factoring company;
Within 24 hours the factoring company will make a direct deposit into your Comdata account or your bank account for the amount of approved charges: this could be anywhere between 60 and 90% of your billing;
Once the invoice has been paid by your customer, you'll receive the balance.
It's true that Freight Bill Factoring is not for everyone, but it is an ideal way of accessing the cash you need to provide stability to your trucking business and keep your wheels turning whilst you wait for your customers to pay their accounts.

 

Obviously, the best option for any business is to invoice your customers directly and wait to receive payment, but unfortunately many customers are painfully slow when it comes to paying their invoices. If you're experiencing a cash flow problem, then working with a factoring company could well provide the financial cushion you need to keep your trucks on the road. It's up to you to do your own research and determine whether factoring makes sense for your business. We trust that the information we're providing here will provide you with enough knowledge to help you make a wise decision.

 

The Cost of Freight Bill Factoring

 

As explained above, there's a cost involved with Freight Bill Factoring, and it's up to you as the business owner to determine whether it's worth the cost. The cost of Trucking Factoring can vary from as little as 1.5% up to around 5% of the line haul revenue.

 

You also need to be aware that there could be a number of fees, charges, and other expenses if you employ the services of a Freight Bill Factoring company. Generally, when you've assigned your Bills of Lading to a Trucking Factoring company, you'll receive an immediate advance of between 60 and 90% of the anticipated revenue: of course, this figure will depend upon the factoring company you use. Once your customer has paid their invoice, the balance will be remitted to you.

 

It's also important to note that all Freight Factoring companies are not equal, so here are some key questions a business owner should ask when considering hiring the services of a Trucking Factoring company:

 

Recourse or Non-Recourse: Which Freight Factoring Service Do You Provide?

 

You may not be familiar with these terms, but you need to be, because the ramifications of not understanding these terms could seriously affect the profitability of your business.

 

Recourse Factoring means that, should your customer fail to pay the factoring company, the factoring service can come back to you for reimbursement; while

 

Non-Recourse Factoring means that you have your money whether the invoice does or doesn't get paid.

 

Will You Bill My Customer for All Future Loads or Can Factoring Be Done on a Load-by-Load Basis?

 

Let's say you have a temporary cash shortfall problem that you're trying to resolve by hiring the services of a Freight Factoring company: many businesses require that the factor handle all future collections owed to you by that specific customer. However, depending upon the customer, this may not be the path you wish to take. You should be aware, though, that some factoring companies are very rigid with this requirement.

 

There are Freight Bill Factoring services out there that allow you to choose on a load-by-load basis as to whether you'd like them to handle the collection on your behalf or whether you prefer to deal with the process of billing and payments yourself. And these services generally let you decide whether you want to receive payment when the invoice is actually paid or whether you want immediate payment. This can be very useful for small businesses because it can save a lot of time by allowing you to use the Freight Factoring service as a kind of de-facto billing service.

 

Is There a Price Difference If the Factoring Company Bills a Customer for All Loads Pulled?

 

Some Freight Factoring companies require that all billings originate through them, while others allow you to decide on an invoice-by-invoice basis whether you want the factoring company to do it, or whether you'd prefer to bill your customer yourself. If you choose to use their services on a spot-usage basis and choose not to have a certain invoice factored, you'll probably still have to pay the $15-$20 billing charge. You'd then receive payment once the customer has settled their account.

 

Are Extra Fees Payable for Additional Services?

 

It's not usual for a freight factoring company to automatically pay your customer's invoices: they need assurance that your customer is a reliable, good-paying customer, so they'll typically require a credit check to ensure they'll be paid. Most Freight Factoring companies will arrange for a customer's credit check on your behalf, and this credit check could incur a nominal fee. On the other hand, there are factoring companies out there that are happy to provide you with access to a list of customers that are already pre-approved - these are companies that currently meet the factor's credit requirements. This can be very useful information to a trucking company, particularly if you need to know the credit rating of a prospective customer prior to booking a load.

 

How Much of the Freight Bill Do You Advance; and Do You Require a Deposit?

 

It's very rare that a Freight Factoring service will advance 100% of your freight invoice, and that's just one of the reasons why it's imperative that you take the time to do your own research and find out what your chosen factoring company's policy is. You also need to know if this will change from load to load or if the same policy applies to all your customers and all freight bills. p> 

Regarding deposits, some freight factoring services do require deposits, while others don't. Again, before you finalize any contract with a Trucking Freight Factoring company, be very sure that you know exactly what you're signing up for. p> 

 

 

 

You Can Find More Information at  https://accountsreceivablefactoringcompany.com
and at www.factoringtrucking.org/

Call Us Today at: 1-866-593-2195

 

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