FreeFactoringInfo.org

Invoice Factoring Basics

2007-04-30T13:15:00.000-07:00

Can’t afford to wait 30 to 60 days to get paid by your customers?

One of the biggest challenges for small and mid size business owners is waiting 30 to 60 days to get paid on invoices. This can be particularly challenging if the business is in growth mode and adding customers every day. Before you know it, the business has a lot of money tied up in “Accounts Receivable” but little cash in the bank to show for it.

Going to the bank for business financing won’t necessarily help. Why? First, bankers require stringent audited financials and lots of collateral. Second, most banks are retreating from the corporate loan market, making the remaining banks very choosey on who they do business with.
Is there a solution for this problem? Yes. It is called Invoice Factoring.

Invoice Factoring enables you to turn your slow paying invoices (from good customers) into immediate cash. An invoice is a promise to pay from a customer. And an accounts receivable factoring company specializes in purchasing this type of debt.

The factor, purchases your invoices providing you with advance funds immediately. They wait to be paid, while you get to use the immediate funds to grow your business.

Who qualifies for invoice factoring financing?

To qualify for factoring, you must:

Do business with commercial customers.
Have a profit - or plan to have one soon.
Have profit margins (or plan to have them) of 20% or more.

How are invoice factoring rates determined?

The receivable factoring rate or discount is determined by the following factors:

Monthly volume
Quality of Account Debtors/Customers Credit
Other risk parameters

Factoring rates can range from 1.5% to 3% a month depending on all these parameters.

Interested in a factoring quote? Please click here. Prefer to speak to a professional right now? Please call 800-901-2418

Accounts Receivable Factoring - An Alternative to Bank Financing: by Kent Harlan

2007-04-24T12:19:00.000-07:00

Factoring may not be the world's oldest profession, but not far from it. This financial practice can be traced back to the Roman Empire. Factoring was the dominant form of finance in the American colonies before the Revolution (mainly textile firms). Over the past few decades, consolidation has created two distinct types of funding sources (called factors): large, institutional-owned factors and several small, independent factoring firms.

WHAT IS FACTORING? Factoring is the purchase of a business accounts receivable at a discount. Rather than wait 30, 45, 60 days or longer for the receivable to be paid, the factor purchases the invoice and advances most of the balance up front. The client first completes an application, which includes a list of the receivables to be factored. The funding source then submits a proposal to the client, which includes an estimate of the factor fee. If the client accepts the proposal, the next step is to submit a check for due diligence The factor must research not only the client, but more importantly, the credit standing of the debtors. After due diligence has been performed, the factor advances 70%-80% of the invoice balance to the client. When the customer pays the invoice (which is made directly to the factor), the client receives the remaining balance less the factor's fee.

WHY DO COMPANIES FACTOR? (1) Growth: Consider this situation: You own a profitable, growing manufacturing company that has used up the credit lines the bank has extended you. A customer comes to you with a large order that needs to be filled soon. You must come up with the cash for production or forego the order to a competitor (which might cause you to lose the customer forever). Factoring existing receivables provides the financing for filling the order and increasing company profits.

(2) Survival: In this scenario, the company's cash flow is so tight that they must have the cash now to fund payroll, pay taxes, and meet expenses. They simply can't wait for a customer to pay the bill 45 days down the road. In this situation, factoring often becomes an ongoing relationship

HOW CAN FACTORING INCREASE PROFITS? A leading professional factor offers this illustrative story of a prospective client who owned a solid business with annual sales of $1 million and growing rapidly but in a continuing cash crunch. The business owner was shocked when offered a fairly typical funding arrangement in which the factor proposed to advance 70% of the value of the receivables, no recourse, for a 4 percent discount for the first 30 days. The balance would be paid to the customer upon payment of the bill less the discount. What upset the business owner, who said he was operating in a very competitive market, was the 4 percent discount. "If I raise my prices 4 percent, I'll go out of business", he said heatedly. The factor's response was to assure him that in all likelihood, he wouldn't have to raise his prices at all. He then asked a simple question: "How much business could you do if you had unlimited funds available?" The owner's reply was "I could easily increase sales to $2 million." Here are some facts about the business: The firm made $90,000 on $1 million in sales. If all accounts receivable were factored, the annual cost for the immediately available cash would be $40,000 and administrative overhead would increase by $20,000. However the cash infusion would allow sales to zoom to $2 million. After reviewing the following profit comparison, the business owner realized that he was able to double his profits without incurring any debt without having to dump any more of his own money into expansion of the business, and after paying the factor. The 4 percent factor fee was no longer an issue for him.

PROFIT COMPARISON
Present With Factoring
Annual Sales $1,000,000--$2,000,000
15% Gross profit $150,000--$300,000
Overhead Cost $60,000--$80,000
Factoring Cost * N/A $40,000
Net Profit $ 90,000--$180,000
* Based on the incremental $1,000,000 sales factored

WHAT OTHER BENEFITS ARE THERE TO FACTORING? 1. Elimination of bad debt - a non-recourse factor will assume the risk of bad debt, thus eliminating this expense from your income statement.

2. Professional collections - Not only will a good factor collect receivables in a professional manner, but he will eliminate overhead associated with the collection process.

3. Unlimited capital - Factoring is the only source of financing that grows with your sales. As sales increase, more cash becomes available for you to use, which allows you to constantly meet demand.

4. Take advantage of volume and early payment discounts - With improved cash flow, you will be in a position to take advantage of these discounts which directly effect the bottom line.

5. No debt incurred - Factoring is NOT a loan and therefore, you are not incurring any debt. This keeps your balance sheet looking good, thereby making it easier to obtain other types of financing or to sell the company.

6. Factoring is easy and fast - The application required to establish a factoring relationship is much simpler than other types of financing. No tax returns, financial statements, business plans, or projections are needed.

7. No personal guarantees. The company principals do not have to personally guarantee the repayment of the funding. They usually have to guarantee against fraud or disputes, but not against customers' inability to pay.

8. Invoices are paid faster - Factors generally report payment experiences to Dun & Bradstreet or other credit agencies. A debtor who is aware of this will not want his credit impaired.

9. Credit screening - A factor will provide you with credit information on new customers, thus allowing you to make better credit decisions. Factoring may not be for everyone, but those who are in the role of "banker" for their customers should at least take the time to weigh the benefits of factoring to provide continued growth and stability.

Accounts receivable factoring continues to be a popular financing tool, particularly among the textile industry. Other industry sectors, such as distributors and manufacturers, are beginning to take advantage of this option as well.

by Kent Harlan

7 Ways to Grow Your Business...

2007-04-06T08:58:00.000-07:00

At Universal Funding our goal is to help our clients make it to the next level with the funding many small to mid-sized businesses need for growth. Here is a great article by Julie Monahan on www.entrepreneur.com that may help you find the way to take the next step in your businesses growth. And when you do, let us help you get the funding you need to make it happen!

We hope you enjoy!

Sincerely,
Darcy Gillingham
Director of Internet Marketing
Universal Funding Corporation
www.universalfundingmain.com

All Systems Grow
You don't have to be a rocket scientist to grow your business. Get ready for liftoff with these 7 expansion strategies.

By Julie Monahan January 13, 2006

After the 16-hour workdays, eleventh-hour decision making, empty aspirin bottles and half-eaten sandwiches, your business is finally a success--with the revenue stream to prove it. So how do you stay ahead of the pack? Riding the success of your introduction is not an option--you've got to reach new customers and new markets. "There always has to be a next thing," says Bruce Lynskey, clinical professor of management at Vanderbilt University's Owen Graduate School of Management in Nashville, Tennessee.

The key to your next move is choosing the expansion method that best fits your company's product or service, your strengths and weaknesses as a business owner, and the limitations of cash, credit and existing resources. A business taking on a new growth strategy should be walking on steady legs, not looking for ways to avoid unresolved problems. And while growth is the central tenet of business development, be willing to apply the brakes when the expansion rate is too much to handle.

So what's the best way to develop your company? One or a combination of the seven strategies below should be enough to turn your acorn into an oak.

1. Introduce a New Product
It takes imagination and a bit of luck to hit on a new product idea that doesn't distract buyers or make older products seem obsolete. But, as in the case of Greensboro, North Carolina-based Batanga.com Inc., a product extension can also reinforce connection to a brand and create a niche all its own. An internet radio station, Batanga.comlaunched a companion print magazine called Batanga Latin Music to offer advertisers more ways to reach its young, Hispanic, tech-savvy audience. What began as a one-time marketing piece quickly grew into a separate media property. "We started getting calls from newsstand distributors asking if they could carry the magazine and [from] customers who wanted to subscribe," says Troy McConnell, 42, president and CEO of Batanga.com. In 2004, the magazine accounted for 10 percent of the company's $2.5 million in revenue, and McConnell predicts that number will grow to at least 30 percent in a few years.

While you have to be careful when extending your original product, adding products with little or no connection to your product line can be equally dangerous. Exploiting a trend is tempting, but acquiring new customers is less revenue-savvy than squeezing more from existing customers. "The more you can put through the same sales channel, the more cost-effective it is," says Alan M. Davis, a principal with Revitalization Partners, a Seattle consulting firm specializing in business turnarounds.

Use your existing customer base to vet a new product's potential market value. A survey combined with a free gift can prompt customers to share a wealth of information. Fred Wainwright, executive director and adjunct assistant professor at the Center for Private Equity and Entrepreneurship at Dartmouth University's Tuck School of Business, says, "That preliminary research is essential to getting the pricing right, choosing the right value proposition and developing a product that meets the needs of the market."

2. Introduce an Existing Product to a New Market
Dianne Daniel, president of Handle It LLCin Dublin, Ohio, first marketed GripTwist, an industrial-strength twist tie made of foam-covered wire, to ski shops as a ski and pole binder. It soon became obvious that what could hold unwieldy items like skis together could also hold hoses, tools, ropes and other items--so the company began selling GripTwists to hardware stores. Next, Handle It took the GripTwist into sporting goods stores. Daniel hopes the expansion will boost GripTwist sales to $1 million this year.

New market development can help you reach new customers, but reaching too far can overtax staff, budgets and operational systems. Start small, and check progress as you go, says Ed Chapman, managing partner of VizQuest Ventures LLC, a sales performance and market development firm in Waltham, Massachusetts. "Many companies don't consider market segmentation and target their products too broadly," he says. "Take your solution, sample it among a couple of microsegments, and see which ones stick."

3. License Your Product
Licensing shifts the financial risk from a product's originator to a company willing to take on the burden of marketing and advertising, production and distribution. The shift also includes forfeiting most of the profits, but it may be a fair price to pay for the chance to build a national reputation when cash flow is low.

For Taggies Inc.of Spencer, Massachusetts, the cachet of its licensing partner more than made up for sharing its piece of the pie. In late 2002, Scholastic Inc., the children's publishing behemoth, wanted to license Taggies, a line of blankets and toys with satiny tags attached, for a book collaboration. "The relationship brought us into a market we weren't in before," says Danielle Ayotte, 35, co-founder with Julie Dix, 38.

Ayotte and Dix, whose sales increased from $2 million in 2003 to nearly $3 million in 2004, were lucky to have Scholastic approach them first. Most business owners aren't so fortunate. Before you shop for a licensee, make sure your product is patented--or at least patent pending--and have some research showing sales potential. Then, if you don't already know of a company you'd like to partner with, check out trade shows, online databases and local economic development agencies. A licensing agent can also help you find appropriate companies and broker a deal.

Licensees can be picky, and so should the licensor. Davis of Revitalization Partners recommends choosing a partner who can offer potentially high volumes of distribution. While contracting with a large company might mean a smaller royalty percentage, the potential customer reach will more than make up for it. A good licensing partner should also have an established reputation for quality and service and an aggressive plan to market and advertise your product. For a check on past performance, talk to other licensors contracting with your selected company.

4. Start a Chain
A restaurant, retail or service business that's easily reproduced and can be run from a distance is great for launching a chain. But entrepreneurs must know exactly what makes the original store work and what won't easily transfer to a new site. "You have to ask, 'How much of this success is tied to me, my location or my staff?'" says Chris Wheeler, managing director of Ballenger Cleveland & Issa LLCin Newport Beach, California, a consulting firm specializing in financial and business turnarounds. Defining operating procedures down to the last detail, sharing staff between locations to establish the company's culture in the new location, and developing a training program for new employees all help start things off right.

Launching multiple locations can present some surprises. When Zoots Corp., an eco-friendly dry cleaning chain in Newton, Massachusetts, opened the doors of its third unit, the company launched a marketing campaign to herald the new arrival. "Suddenly, we had three stores doing three times the business of our first two stores," says Todd Krasnow, 47, chair and co-founder. The company, which had about $50 million in sales in 2004, found it difficult to meet its service standards. To avoid similar deluges in the future, Zoots cut back on big promotions, relying instead on word-of-mouth and periodic advertising.

Who wouldn't love the idea of collecting fees and royalties while fellow entrepreneurs expand your business? Once you get past the startup costs--on average, between $125,000 and $150,000 for moderate initial growth of five to 10 franchises per year-franchising is an efficient way to expand brand awareness while pooling the business acumen, financial resources and buying power of multiple owners.

Don't expect a motivated franchisee to make up for existing shortfalls, however. "Make sure there's a market for your product, do your competitive analysis and be sufficiently capitalized," says Andrew Loewinger, an international franchise attorney with law firm Nixon Peabody LLPin Washington, DC. Otherwise, franchisees can be a prickly bunch to deal with. "You might have franchisees who don't want to follow the program, who want to break out on their own or don't want to pay their royalties because they think you're not delivering value," Loewinger says. "It can be a challenge."

Joe Barbat, 29, founder and CEO of Wireless Toyz Ltd., a cellular retailer in Farmington Hills, Michigan, keeps in touch with franchisees through store visits and a company-wide intranet detailing new cellular plans and promotions. These contacts remind franchisees that the company is always there to help, says Barbat. It also helps the company, which brought in over $50 million in revenue last year, maintain sales and service standards.

For more on franchising your business, see the "Franchising Your Business" section of Entrepreneur's Franchise Zone.

6. Join Forces
A merger or acquisition combines the best of two companies, expands your customer base, increases intellectual capital and delivers operational efficiencies. The trick is finding the right partner. "You have to share the same vision of what it is you're trying to build," says Davis.

Such a step is usually the domain of established companies, but acquisitions are how Thought Equity Inc.got off the ground. When Thought Equity's CEO, Kevin Schaff, started his Denver business providing stock footage and production-ready commercials to media companies, he first acquired a nearly bankrupt company selling similar ready-to-use commercials. "We wanted to [increase] the size of our library and provide a critical mass for people when they came to search our libraries," Schaff, 30, says.

The next target, an advertising agency, supplied the expertise of professionals steeped in TV advertising sales. With this "plug and play team," as Schaff calls the agency, Schaff estimates the company got up and running with its first customers 18 months earlier than it could have had it tried to create these resources in-house. Both acquisitions were completed in 2002, the year Thought Equity was founded. Sales in 2004 reached $3 million.

7. Go Global
Growing markets, rising consumer spending, improved business climate--sometimes the only place to find these things is overseas. Doing business internationally can take the form of exporting, licensing, a joint venture or manufacturing, but whatever form you choose, the same basic business rules of assessing customer demand, gaining legal and accounting assistance, protecting intellectual property and obeying regulations apply.

What don't come so easily are the nuances of cultural differences. In some countries, particularly those in Asia, a local partner is virtually a requirement. Your first stop should be your target country's economic development agency, which can help marshal local resources to get you on your way, possibly with a small financial boost.

Melody Brenna, 48, co-founder and CEO of Milestone Architectural Ornamentation Inc.in Amarillo, Texas, emphasizes the importance of the internet in growing an international business. That's how overseas customers first found out about her construction technology firm, which specializes in historic reproductions. Today, Milestone's international business includes exporting product machinery, materials and molds to Thailand, and deals with other countries are in the works. To streamline service, the company creates a project-specific website with regularly updated project news, photos and scheduling information.

Online access also helps businesses overcome the delays of time zone differences. "If there's something I forgot to tell a client," says Brenna, "I throw it on the web and it's there when they get to work in the morning."

Pre-Expansion Checkup
Answer these questions before you make your move.

Do employees have the necessary skills to support your growth strategy? Will you need to hire new staff or provide additional training?
Can existing operations handle a sudden boost in demand? How will you maintain service levels while reaching for new business?
Are current operations, including order management, customer service, record keeping and inventory control, running smoothly and ready to take on more?
Where's the money coming from? Will cash flow from sales be enough to support your expansion, or will you need lender or investor financing?
What will you need the money for? Study historical cash-flow statements as a guideline, then determine cash-flow needs on a weekly, monthly and annual basis to plan your funding strategies.
Are you ready to delegate more tasks and give managers more control?
Does expansion rest on a reliable mix of intuition, solid competitive analysis and customer research?
Do you have a time-defined exit strategy if expansion plans fail?
Source: Office of Women's Business Ownership, SBA

--------------------------------------------------------------------------------

Julie Monahan is a writer in Seattle whose articles on small business and emerging technology have appeared in numerous consumer and trade magazines.

Invoice Factoring Financing

2007-03-21T13:37:00.000-07:00

Are you forced to wait 30 to 60 days to be paid by your commercial clients? Waiting to be paid by your clients can be very challenging, especially if your business is a startup or growing quickly.

The solution is Invoice Factoring:
Invoice factoring can get your invoices paid in as little as 24-hours, providing you with financing to pay employees, suppliers or rent. More importantly, factoring your invoices eliminates the uncertainty of when you’ll be paid, allowing you to confidently manage and grow your business.

How does Invoice Factoring work?
Factoring invoices is very simple and helps you get reliable and stable cash flow. It can easily be integrated to your business and works as follows:

You deliver your product/service to your client.
You send an invoice to your client and send a copy to us (the factoring company)
We advance you up to 90% (the remaining 10% is used as a reserve)
You get immediate use of the money to pay suppliers, taxes and employees
We wait to get paid by your customer
Once we get paid, we rebate the 10% reserve (less a small fee)
You may qualify for invoice factoring rates as low as 1.5%. To find out if you qualify,

click here now and a Factoring Specialist will contact you immediately.

Invoice Factoring Costs:
Factoring your invoices can be very affordable, with the average monthly discount being between 1.5% and 3.5% per month. There are two major variables that we consider when determining the cost of a factoring transaction. They are the size of the transaction and the credit quality of your clients. If you’d like to get an instant cost estimate, please click here and a Factoring Specialist will contact you as quickly as possible.

If you would like to see if you qualify for any of our programs please click here now and a Factoring Specialist will contact you right away or call 1-800-901-2418 to speak with someone immediately.

AddMe - Search Engine Optimization

How Scrap Metal Traders Can Leverage Purchase Order Financing

2007-03-14T15:57:00.000-07:00

To be a successful scrap metal dealer you must be able to handle large orders – constantly and consistently. You must be able to pay for the scrap metal costs in advance (and at the best prices) and then wait 30 to 60 days until the transaction is settled to get your investment and profit back. However, few scrap metal traders can handle many large orders at a time while waiting 30 to 60 days to get paid. Therein lies the problem.

Many dealers try to go to the bank hoping to get business financing. However, they soon discover that most banks don’t understand the recycled scrap metal business well and don’t have the right solutions for the industry. Furthermore, getting bank financing is especially hard since banks require that you show three years of profitable business history and have sizeable collateral before making a loan.

Either way, banks loans don’t always work well for scrap metal dealers. In this industry, once you find the best scrap metal prices, you must move quickly to seal the deal. A better solution than bank financing is to use purchase order financing.

Purchase order funding provides you with the necessary funds to execute your confirmed POs. It provides you the financing to pay scrap metal suppliers, enabling you to deliver the goods and close the sale.

Purchase order financing is easy to use and works as follows:
1. The scrap metal dealer / trader secures a purchase order from a customer
2. The purchase order finance company then pays the scrap metal costs from the supplier yard (usually by placing a deposit or using a letter of credit)
3. The yard delivers the scrap metal to the customer according to the order
4. Once the customer pays for the scrap metal, the transaction is settled

Purchase order financing has a number of advantages over conventional bank financing. First, it’s very easy to obtain. The biggest requirement is that your company have purchase orders form commercially credit worthy customers. And second, it can be set up quickly. Most of the times you can get the financing in days (rather than months). And as opposed to bank financing, most startups will qualify.

Many times, po financing can be used in combination with factoring financing. Combining these two products can allow your business to fully optimize its cash flow, enabling it to grow at an even faster rate.

Although not widely used, these financing tools are quickly being adopted by growth minded scrap metal dealerships and traders. Be sure to consider them as options the next time your company needs financing.

By: Marco Terry

Article Directory: http://www.articledashboard.com

“Factoring Your Way To Liquidity” By Henry Byers

2007-03-06T10:05:00.000-08:00

Dear Friends,

In an effort to keep our articles fresh and informative I will begin posting articles and white papers on factoring from around the web. To start this new series, I found the following article “Factoring Your Way To Liquidity” By Henry Byers online at http://www.articledashboard.com/. It provides a greater overview of all the services and benefits of factoring available. Please note: Universal Funding only specilizes in B2B Factoring.

Thanks for visiting and please let me know if there is anything specific you would like to see on our blog.

Sincerely,

Darcy Gillingham

darcy@universalfunding.com

“Factoring Your Way To Liquidity"

There are various types of factoring available. These factoring can be in any industry viz. account receivable factoring, asset based lending, business loans, construction factoring, credit card receivables factoring, distributors factoring, equipment, hard money loans, invoice factoring, manufacturing, medical factoring, purchase order financing, real estate lending, staffing, systems, technology, trucking, verdict funding, wholesalers, etc.

Various agencies provide all these types of factoring. Usually their turnaround time is 24 hours. They provide exclusive online and paperless factoring solutions to the small and medium sized businesses. These agencies either provide stated rates for factoring of invoices of a particular amount or they offer a free invoice-factoring quote. Thereafter these agencies approach the factoring companies that purchase the creditworthy accounts receivable at a small discount and convert the invoices in to cash.

With the help of these factoring agencies cash is received in mere 24 hours and no debt is created. Since there is no debt created it increases your credit worthiness which can be used to avail a loan. This also represents a healthy balance sheet and strong financial position. These agencies also offer higher advance rates which ultimately results in factoring lesser invoices but generating all the required money.

Moreover the factors handle the collection in professional manner thus reduces the collection costs. They also help in processing of invoices by generating invoices online. This further means increased paperless work. As a result the turnaround time is much shorter than any other means.

Invoice factoring is also known as accounts receivable financing. This practice helps in solving the immediate cash flow problems for small businesses with immediate infusion of money. They also provide a credit facility to small business owners with complete flexibility. This also provides the working capital to the small or medium business owners. This factoring helps in generating working capital without the need of constant renegotiations. Since there is a considerable increase in the working capital it leads to more sales and expansion of business.

A practice of factoring helps small business owners not only to solve their cash problems but also help in increasing sales. Small business owners can also concentrate on their businesses rather than chasing their customers for payments and cash. Factoring practice helps all kinds of small to medium business owners whether they are a small trucking company or any manufacturers. As a result of invoice factoring, it not only reduces accounting costs but also helps business owners and manufacturers in increased productivity.

This practice if factoring the invoices keeps the businessmen from other time consuming jobs like collection, administration, book-keeping, looking up additional capital or warding off creditors. Finally the best part of factoring is that the business ownership remains unchanged as in case of loan, etc. Since there is no loss of business equity, the ownership percentages remain unchanged.

Article Directory: http://www.articledashboard.com

By Henry Byers

Henry Byers, Factoring Financial Services advisor - focusing on Factoring Company and Business Factoring

The Best Financial Alternative for Small to Mid-Sized Businesses

2007-02-22T09:23:00.001-08:00

Welcome to FreeFactoringInfo.org. This Blog was created by Universal Funding in an effort to spread the word about the not-so-well known alternative business finance option called factoring. Factoring is a simple buy-sell process. A business sells its invoices to a factor and the factor gives them cash upfront saving them the typical 30, 60 or 90 days they would normally wait to be paid.

The benefits of factoring are endless for a growing company. But most importantly it is less expensive than a credit card, faster and easier than a bank loan, is not considered debt on the balance sheet because it is already an asset and approvals are based on your customer’s credit, not yours.

So please use this site to learn about factoring and if you have any questions, feedback or requests please e-mail me at darcy@universalfunding.com. And if you would like to see if factoring can help you just click on the link below and fill out our simple 5-line application and a factoring specialist will contact you immediately to answer any questions you have.

http://www.universalfundingmain.com?source=FreeFactoringInfo.org

New “Freight Bill Factoring” Program

2007-02-08T13:09:00.000-08:00

Universal Funding Corporation Implements new “Freight Bill Factoring” program exclusively for the Transportation industry.

The new program will include two plans: a low rate of 1.5% or a one time flat fee of 5%. Additionally, transporters are gauranteed 90% cash advances and 99% credit approvals on all qualified accounts.

Universal Funding helps small to mid-sized trucking companies get the cash they need to stay competitive in the ever changing transportation environment. Freight Bill Factoring is the buy-sell process of freight bills. Universal Funding purchases the freight bill for a one time 5% fee from the transporter, advances them 90% and when Universal Funding receives payment, advances the remaining amount (minus the fee) to the transportation company.

For example: 5% Flat Fee Plan

Invoice Amount: $ 1,000
Advance: $ 900
Reserve: $ 100
5 % Flat Fee (one time) $ 50
Your Total Return $ 950

The new program saves truckers time with streamlined paperwork allowing for funding within 24 hours. Obtaining approval is easier than traditional banking because factors do not have the federal regulations banks have and it is approved on the credit-worthiness of the debtor, not the Transporter.

Because of this, Factoring can be used as a Cash Flow Management tool if prepared for correctly. Universal Funding is also providing payment in any form necessary; from direct deposit to fuel cards. Additional services includes, book keeping, payroll and tax paying assistance.

For free Information on Factoring or to see if Universal Funding can help you please visit http://universalfundingmain.com/defaulttransportation.html or call 1-800-781-3978 for immediate assistance.

Financial Factoring Defined

2007-02-06T14:35:00.000-08:00

Compliments of Wikipedia.org

Factoring is often used synonymously with accounts receivable financing. Factoring is a form of commercial finance whereby a business sells its accounts receivable (in the form of invoices) at a discount. Effectively, the business is no longer dependent on the conversion of accounts receivable to cash from the actual payment from their customers, which takes place on typical 30 to 90 day terms. Businesses benefit from the acceleration of cash flow by obtaining cash from the factor equal to the face value of the sold accounts receivable, less a factor's fee.

Factoring is considered off balance sheet financing in that it is not a form of debt or a form of equity. This fact makes factoring more attainable than traditional bank and equity financing.

There are usually three parties involved when an invoice is factored:

Seller of the product or service who originates the invoice.
Debtor is the recipient of the invoice for services rendered who promises to pay the balance within the agreed payment terms (the customer).
Factor (the factoring company)

Types of factoring:

Notified, or full service factoring:
With notified factoring, the debtors are aware of the finance facility as the factoring company normally does the credit control, that is, collects the outstanding debts.
Confidential, or invoice finance:
With invoice finance (sometimes called confidential or non-notification factoring), the factoring facility is undisclosed, with the seller usually retaining the credit control function.
Recourse factoring:
Recourse factoring is now the most common type of factoring transaction. This factoring transaction allows the factor to go back to the seller if payment is not received (normally after a 90 day period). The credit risk does not transfer to the factor during the recourse factoring process. Normally, in the event of non-payment by the customer, the seller must buy back the invoice with another invoice (credit worthy). Recourse factoring is typically the lowest cost for the seller because the risk for the factor on the funding transaction is lower.
Non recourse factoring:
Non recourse factoring is the traditional method of factoring and puts the risk of non-payment, in the event the debtor becomes insolvent, fully on the factor. If the debtor cannot pay the invoice due to insolvency, it is the factor's problem to deal with and the factor cannot seek payment from the seller. The factor will only purchase solid credit worthy invoices and often turns away average credit quality customers. The cost is typically higher with this factoring process as the factor assumes a greater risk.
New Company Factoring
Sometimes, because the seller is a new company, it may find it difficult to secure traditional bank financing. An alternative source of financing in such an instance is to use use factoring by selling accounts to a finance company (the factor) in order to gain immediate access to the cash owed to the seller by its customers. Instead of sending bills directly to the customer, the company sends its invoices to the factor, who immediately pays the company–thereby eliminating the 30, 60, or even 90 days of waiting that normally encompasses a billing cycle. For example, suppose a manufacturing company secures a contract to sell its widgets to a large retailer. Upon delivery of the merchandise to the retailer, the manufacturer sends the bill through the factoring company for payment. The factor immediately pays the manufacturer the face value of the invoice less a discount fee (2–10%), depending on the nature of the contract and the creditworthiness of the retailer. This immediate access to the cash flow allows the manufacturer to meet its commitments and pay its bills in a timely manner. The retailer pays the factor when the bill comes due for the widgets it purchased from the manufacturer.

Smart Factoring Strategies:

When more flexible terms factoring begins, the client can increase prices to its customers by 1% to 5% to help cover the cost of factoring.

In many industries, customers expect to pay a few percentage points higher to get flexible sales terms. A client can seek a cash discount from a supplier in return for prompt payment, many time from 2% up to 10% (depending on the industry standard). When a client makes a cash payment on the day of purchase from suppliers, the client can profit from a large cash discount.
With benefits availing to both the supplier and the customer, the cost of factoring can be covered by using smart factoring strategies.

Factoring has been available to a variety of companies for many years. Some factors specialize only in retail financing, others specialize in freight-bill factoring for trucking companies, and others only factor invoices for manufacturing companies. Factoring may be more expensive than traditional bank financing but often it is the only source of financing that some new or under-capitalized companies can find.

If you would like to see if factoring your accounts receivables can help your business please contact Universal Funding Corporation at 1-800-901-2418 or visit us online at www.universalfundingmain.com

Payroll Funding vs. Factoring

2007-01-31T14:55:00.001-08:00

It is normal for staffing firms to have cash flow shortages during times of growth as they deal with different pay cycles. In an effort to fund their growth many staffing firms look for alternative financing. The two most frequently used alternatives are Payroll Funding and Factoring. Although Payroll Funding is a good option for some staffing firms, Factoring is much more flexible.

For Example:

With Payroll Funding, only the payroll portion of the invoice is funded. Whereas with Factoring, the entire invoice is funded and the staffing firm may use the funds for any purpose including payroll, marketing, expanding, etc... Similarly, with Payroll Funding the staffing firm must submit all time cards while the funding Company takes over invoices, payroll and tax processing. With Factoring, the Staffing firm has total control over which invoices they submit and maintains management of payroll, insurance, etc… if they do not want back office help.

Additional Benefits of Factoring include:

Stimulating Growth:

Provides immediate access to working capital
Shifts manpower from collection to marketing for growth
Meets payroll efficiently and consistently

Reducing Expenses:

Eliminates bad debt with credit guarantees
Reduces collection and administrative expenses

Improving Finances:

Meets regular payroll obligations
Gets payroll taxes current
Reaches a higher quality customer base

If you would like to know if Factoring will help your Temporary Staffing Firm please visit http://universalfundingmain.com/defaultstaffing.html

Or call 1-800-901-2418 for immediate assistance.

Financial Solutions For Manufacturers

2007-01-29T12:50:00.001-08:00

In the ever changing global economy, manufacturers are finding themselves strapped for cash by the demanding terms of their customers. As competition increases, so do the terms by which they compete. For small to mid-sized manufacturers long contract terms, from 30 to 90 days can be the one barrier restraining their growth. For businesses in this situation, there is a great alternative called factoring. Factoring is the simple buy-sell process of accounts receivables. The factor purchases the manufacturers invoices and the manufacturer gets immediate cash advances. Thus, the increased cash flow helps stimulate the growth the manufacturer needs to compete.

With over 30 years combined experience factoring for the manufacturing industry, Universal Funding has become an expert at helping manufacturers improve their cash flow position. Tell us your goals and we will tailor a funding program specifically for your needs. www.univeralfundingmain.com

Link: MaterialSeek - Directory for the materials industry.

Factoring vs. Traditional Bank Financing

2007-01-25T15:59:00.000-08:00

When business owners need funding for growth there are not always a lot of options available. Traditionally, you go to a bank with your business plan and credit history in tow and wait for the bank to help you out. It often takes a very long time from the day you apply to the day you receive your money. And if you are like most people, the odds of qualifying are pretty low due to the stringent regulations of the Banking Industry.

But for those who do receive a line of credit from a bank, it may not always be the best plan for growth. If your company is a start-up or small to mid-sized and growing quickly, there is a good chance that the credit limit the bank extends to you will ultimately stunt your company’s growth.

You see, the limited line of capital can easily be maxed-out by growing companies. And where does that leave you? It leaves you with a large debt and no way to nurture your growing company.

This is where factoring is different. With factoring there is no credit limit and it is not considered a form of debt on your balance sheet. The more account receivables you get, the more cash you can have access to. So as your company grows so does your line of credit, which continuously fuels your company’s growth.

Factoring is also different in that there are no stringent regulations or lengthy approval processes. You can typically have your money within 24 hours and there is no need for a business plan or to review your personal credit history. If you have accounts receivables and customers with established credit then factoring will work for your business. You see, it is your customers who are paying the factor so it is their credit-worthiness that matters.

So, although there are not always financial solutions for every business owner, factoring can potentially be the best if managed as a tool for growth.

If you would like to see if we can help your business grow please visit us at www.universalfundingmain.com and fill out an online application.

Why Cash Flow is so Important

2007-01-23T09:33:00.000-08:00

Business is essentially about trade, the exchange of value between parties, and cash is the asset needed for participation in that trade. Because of this, no business can survive without maintaining positive cash flow. To have positive cash flow, cash inflows need to exceed cash outflows.

A cash outflow occurs when a company transfers funds to another party. Such a transfer could be made to pay for employees, suppliers, creditors, etc... A cash inflow is any transfer of money that comes into the company's possession. The majority of a company's cash inflows are from customers, lenders, investors, etc…

Ultimately, without cash flow, a business does not have the resources it needs to fund its growth. If your business is in need of cash flow and has accounts receivables, Universal Funding can help! Please visit www.universalfundingmain.com or call 1-800-901-2418 for immediate assistance.

The Benefits of Factoring

2007-01-22T13:58:00.000-08:00

With competition on the rise many businesses are finding themselves cash poor due to the demanding terms of their customers. However, there is an alternative financial solution called Factoring that allows your business to be more competitive while improving your cash flow, credit rating, and supplier discounts.

Factoring is a simple buy-sell process. You sell your invoices to a Factor and the Factor gives you cash for an agreed discount. Unlike traditional bank financing, Factoring relies on the credit-worthiness of your customers, not you. Some of the great benefits to Factoring are as follows:

Improve Cash Flow without adding debt:

Receive cash for your outstanding invoices
Meet tax requirements on time
Purchase capital equipment
Market for additional business
Utilize increased cash flow to increase market share
Pay your suppliers faster and take advantage of discounts

Improve Customer Credit Services:

Reduce bad debt
Streamline credit approvals for new customers
Improve decision-making on new business
Reduce administration costs
Accounts Receivable Management

Take Advantage of the Flexibility

Factor as much as your want or as little as you want.
There are no minimums and no maximums in the amount you can factor.
Funding is based on the financial strength of your customers.

To see if Factoring will benefit you please visit www.universalfundingmain.com Or call 800-901-2418 for immediate service.

Turn Your Invoices Into Cash!

2007-01-18T15:10:00.000-08:00

If you have business to business accounts receivables and need to increase your cash flow, Universal Funding can help!

How Universal Funding Helps…

At Universal Funding our goal is to support your cash flow position and growth by offering funding solutions that can turn your accounts receivables into immediate cash.

With over 30 years of combined experience, Universal Funding has specialized in Factoring, also known as, accounts receivable financing, accounts receivable factoring and accounts receivable funding. Factoring is a simple buy-sell process. Put simply, you sell Universal Funding your invoices and Universal Funding gives you cash upfront for an agreed discount.

Who Universal Funding Helps…

Universal Funding provides cash flow solutions to businesses in most industry sectors ranging from start ups to established organizations. The only requirement is that your organization has business to business accounts receivables.

However, specific industries Universal Funding helps include; Staffing, Transportation and Manufacturing.

So no matter what you desire; Stimulating Growth, Payroll Assistance, Financial Help, Cash Flow Management, etc... Universal Funding will help!

How to Get Started…
Please visit www.universalfundingmain.com and fill out an application. Or call 1-800-781-3978 for immediate assistance. Questions or comments please feel free to contact me at darcy@universalfunding.com

Can Universal Funding Help You?

2007-01-16T09:25:00.000-08:00

As there are different types of receivables, who Universal Funding can help is sometimes confusing to our customers. To clarify, there are two main types of receivables; consumer and business.

The first, consumer receivables, means that the debtor is a consumer. This would include any business that sells, leases or finances products/services to consumers. For example, a music store owner who leases instruments to people.

The second, accounts receivables, means that the debtor is a business. This would include any business that sells, leases or finances products/services to business accounts. For example, a shipping company that transports goods cross country for Wal-Mart.

There are Factoring companies that specialize in consumer receivables and there are Factoring companies that specialize in Accounts Receivable. So depending on your business and your needs you could need one or both.

So, now that we have the basics down, Universal Funding helps businesses who have business accounts receivables... But that is about our only limiting criteria. Universal Funding can help… staffing, transportation, manufacturing or any other accounts receivable based business… new or long standing business owners… as well as businesses in need of expanding, accounts receivable management, cash flow management or just a little financial help...

To get set up with a new line of credit please visit www.universalfundingmain.com to fill out an application or call to speak with someone immediately 1-800-781-3978

How to Create Invoices that Speed Up Payment

2007-01-15T12:36:00.000-08:00

In this article we will help you determine what creates action and inaction in your customer’s pay behavior as well as give you tips to create invoices that speed up your customer’s payments.

First, review your current invoice statements. Many people rarely take the time to examine what they are saying to their customers. Does your invoice say “Payable upon receipt?” or does it list the age of the account, "current, 30 days, 60 days, 90 days and over 90 days?”

These are both very common statements on bills, but what are they really saying to your customers? “Payable upon receipt” says “Pay when it's convenient.” And listing the age of the over due account says “We are a creditor.”

Instead of sending invoices that encourage inaction alter your verbiage and speed up your customer’s slow pay behavior by using the following tips:

List a due date on all of your invoices: "Due on January 31, 2007.” People are much more likely to pay attention to a specific payment date, and you eliminate the possibility of any misunderstanding.
Offer an incentive to pay on time. Many businesses, offer a discount for paying within 10 days of an invoice date. Note: 2% is typical for payments within ten days.

Using invoices that list a due date and offering incentives for fast payment promotes action and frees up your cash flow so you can continue to grow and care for your business.

If you find yourself in a situation where none of these options can help and you need immediate cash, please visit us at www.universalfundingmain.com or call for immediate assistance 1-800-781-3978.

Financial Solutions for Your Growing Business

2007-01-12T12:58:00.000-08:00

Time and again small to mid-sized business owners need to increase their cash flow to nurture their growing business. However, most banks can not help them without significant collateral and a history of successful operations. If you have found yourself in this situation, do not fret, there is a solution.

The Solution: Invoice Factoring

Invoice factoring is ideal for business owners who cannot wait the typical 30 to 90 days to be paid by their customers. It allows a business to sell its invoices from commercial customers to a Factor for immediate payment. The Factoring Company buys the invoices at a discount and waits for the customer to pay.

The Benefits of Factoring:

The Factoring Company makes its lending decisions based on the creditworthiness of your customers.
There are no limits on your line of credit... it is limited only by the amount you sell to your creditworthy clients.
Virtually any B2B business in any industry can use Factoring as long as it has accounts receivables.
You get the money you need to cultivate your growing business.

If you are a business owner in need of cash flow and have accounts receivables… Universal Funding Can Help! Please visit us online at www.universalfundingmain.com or call to speak with a Factoring Specialist: 1-800-901-2418

The History of Factoring

2007-01-11T10:28:00.000-08:00

It is believed by historians that Factoring originated over 4,000 years ago in the days of King Hammurabi of Mesopotamia. Mesopotamia, which is now occupied by Iraq, eastern Syria, southeastern Turkey, and Southwest Iran, has been called the "cradle of civilization," as it was here that the first literate societies developed. Although Mesopotamia no longer exists many of its great contributions to civilization have endured, including Factoring.

Factoring was then passed along from civilization to civilization until its widespread use in the American colonies. During this time trade was the main source of income for colonists. With the abundance of the North American landscape, colonists cultivated and traded commodities like cotton, fur and timber with the Europeans. Merchant bankers in Europe advanced funds to the colonists for the raw materials. This enabled the colonists to continue to live and work, free from the burden of receivables by their customers.

With the arrival of the Industrial Revolution, Factoring evolved and became more focused on the issue of credit. By helping clients to determine the creditworthiness of their customers and establishing credit limits, factors were able to guarantee payment for approved customers.

Then in the 60’s and 70’s many private factors developed as interest rates rose to new heights. This trend continued to grow in the 80's, primarily due to increasing interest rates and changes in the banking industry. As banks became more expensive and inflexible due to heavy regulations business owners were forced to find other sources of financing.

Today, hundreds of thousands of businesses sell their accounts receivables to increase their cash flow on a daily basis.

If you would like to see if Factoring can benefit your business please visit us at http://www.universalfundingmain.com or for immediate assistance call: 1-800-781-3978

How to Shorten Your Cash Flow Conversions

2007-01-10T15:32:00.000-08:00

Cash Flow Conversions are like the ocean tide. They are the ebb and flow of your business’ capital. They come in from customers and go out to bills. But unlike the tide, most business owners can not depend on the timing of Cash Flow Conversions.

More often than not, business owner's receivables and payables are out of sync, leaving them short on cash. This cash shortage is called a cash flow gap. For small and mid-sized businesses a cash flow gap can be extremely damaging. So in this article I would like to give you a few tips that may help you shorten your Cash Flow Conversions.

First, perform a Cash Flow Analysis (see “How to Perform a Cash Flow Analysis”) and if you are battling cash flow gaps try the following:

Prepare and present an invoice to your customers when you deliver your goods/service instead of mailing it later.
Offer a discount to early paying customers, i.e. 3% if they pay in 15 days.
Track over-due accounts and send them to collections.
Or if you prefer not to handle your cash flow management hire a Factoring Company who will purchase your invoices giving you cash upfront and will also perform all of your businesses cash flow management responsibilities.

So there you have it! Just remember, be proactive not reactive! If you monitor your cash flow and use these tips to shorten your cash flow conversion period you will out smart those horrific cash flow gaps!

If you are interested in learning more about Factoring or would like to see if we can help you with your cash flow management please visit: www.universalfundingmain.com or call 1-800-781-3978

Managing Your Business' Cash Flow

2007-01-09T10:14:00.000-08:00

Cash Flow Management: It is the process of reviewing and revising cash flow streams to ensure your business' vitality. Businesses who do not perform Cash Flow Management often find themselves scrambling to pay bills while waiting on receivables. To avoid shortages between receivables and payables you must:

A. Perform a Cash Flow Analysis (see previous Blog.)

B. Develop and implement strategies that will maintain the appropriate cash flow for your business.

Strategies: There are many strategies to improve cash flow. One strategy is to shorten your cash flow exchange so that your business can bring in money faster. However, if this is not an option another strategy is Factoring. Factoring is the process of selling invoices for immediate cash flow. However, whatever strategy you choose, Cash Flow Management can be the tool to ensuring your business' stability and growth.

For more information on Factoring please visit: www.universalfundingmain.com

How to Perform a Cash Flow Analysis

2007-01-04T09:03:00.001-08:00

Cash... it flows through your company like the blood in your veins. It is the lifeline of your business. And when it’s low will impact your company’s vitality. So performing a cash flow analysis is about as important as a yearly visit to your doctor.

Ready for a Check-Up?
First, compare your unpaid purchases to your invoices due at the end of the month. If your unpaid purchases are greater than your invoices due, you spent more cash than you will receive next month.

Low Cash Flow Diagnosis?
Second, examine the areas that affect your cash flow stamina. Review your inventory, accounts receivable, accounts payable, and credit terms. Identify the problem and you can take steps to correcting it. For example, if your cash flow problem is accounts receivable, identify why. Is it because of slow paying customers or long contract terms? Then find a solution. One option is to use a Factor. A Factor purchases your invoices, gives you immediate cash and waits to receive payment from your debtor.

There are many solutions to stimulate cash flow but the key is to be prepared. Review your finances every month. Change policies or procedures that hinder your cash flow vigor. And most importantly, use cash flow analysis as a tool for the preemptive care of your businesses long term health.

Need a Cure?
To find out if Factoring is the tool to stimulate your cash flow lifeline please visit www.universalfundingmain.com Or For immediate assistance please call: 1-800-781-3978

What is Factoring?

2007-01-02T12:24:00.000-08:00

It is no surprise that when I tell people I work for a Factoring Company, the first thing they ask is “What is Factoring?”

Factoring as defined by Wikipedia.org, “is a form of commercial finance whereby a business sells its accounts receivable (in the form of invoices) at a discount." "It is considered off balance sheet financing in that it is not a debt or equity."

The Benefits:
1. It is more attainable than traditional bank and equity financing.
2. Businesses get help from the acceleration of cash flow.

Put simply, business owners sell their invoices for cash advances to stimulate their cash flow.

And as we all know, cash flow is good!

If you would like to see if Universal Funding Corporation can help you please visit:

www.universalfundingmain.com

For Immediate Assistance Call: 1-800-781-3978