Summary: Consulting companies are usually high-margin businesses but are expensive to operate. Professional services companies must retain highly skilled employees who command high salaries. Consequently, payroll is usually their largest and most important expense. Consulting companies must have enough working capital to cover payroll as the business grows. This challenge for new and growing consultancies […]
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Receivables Financing For Automotive Supply Companies
Most automotive supply companies operate on relatively thin margins and tight cash flows. In this competitive industry, suppliers give every incentive possible to win their client’s business. One of those incentives, offering payment terms, often causes financial problems. Most auto manufacturing companies and their supply chain providers demand payment terms as a condition of doing business. This condition allows […]
Eight Factoring Application Roadblocks
Most factoring applications can proceed quickly if a prospective client does not have significant problems. However, open liens, legal issues, or tax problems affect your chances of getting funding. Knowing how to handle these problems ahead of time improves your chances of success. Here are the eight most common roadblocks to having your factoring application […]
How to Use Invoice Financing to Offer Credit Terms
Waiting 30, 45, or even 60 days to get an invoice paid is a challenge for many business owners. Small companies often have to wait for payment because their commercial sales are made on credit. This type of trade credit is commonly known as “payment terms.” Companies must offer payment terms because their clients demand […]
What is a Notice of Assignment? (Invoice Factoring)
A Notice of Assignment (NOA) is a document that factoring companies send to the end-customers of their clients. This document informs end-customers of the factoring financing relationship. Clients usually have some concerns when they learn that a factor will notify their customers. This article addresses these concerns and explains how the NOA works, why it […]
What to Do If Your Invoice Factoring Application Is Rejected
Having a finance company reject your application is always difficult. However, knowing how to handle the rejection effectively may help you get financing in the future. This article covers how to handle an application rejection constructively. It covers the most common reasons factoring applications get rejected and provides a strategy to move forward. 1. How […]
Financing a Directional Boring / Directional Drilling Company
Managing the cash flow of a directional boring/directional drilling company can be challenging. Like most companies in construction, they face a common cash flow dilemma. The company has to pay expenses quickly but must also wait up to 60 days to get paid by clients. This situation can leave directional boring companies with a cash […]
Can Invoice Factoring Help with Collections Problems?
Some business owners have the misconception that factoring companies can finance “troubled invoices.” Factoring improves your cash flow by financing slow-paying invoices. However, it won’t help with invoices that have collections problems. A factoring company will not finance those invoices. This article explains how factoring works, how factoring companies determine credit quality, and why they […]
What are Vendor Guarantees?
A vendor guarantee is a tool that can help some companies cover their supplier expenses. Companies that manufacture products but cannot obtain conventional financing commonly use vendor guarantees. This article explains how vendor guarantees work, who can use them, and the product’s limitations. We cover: How to finance supplier costs What is invoice factoring? What […]
Why Do Purchase Order Financing Companies Only Prepay Foreign Suppliers With a Letter of Credit?
Most of our purchase order (PO) financing clients are importers who buy goods from another country and sell them to companies in the US or Canada. Some of these importers usually request that we prepay their supplier by wire transfer. While purchase order financing companies can pay foreign suppliers with a letter of credit, documentary collection, […]