Companies sell their receivables to improve their cash flow. Having good cash flow is essential if you want to run a successful business. You can have a great product/service and excellent profit margins, but your business will suffer if your cash flow is bad. As a matter of fact, profitable companies can also have serious […]
Invoice Factoring
Why Must My Customer Send My Payments to the Factoring Company?
One of the chief objections that clients have with using factoring is that their customers need to remit payments to a new address. Actually, notifying the customer of the new payment address and procedure is a standard practice in the industry. Factors use a document commonly known as a notice of assignment. But why is […]
Why Do Companies Use Factoring?
Factoring is a product that helps companies that have slow-paying clients. These companies usually can’t wait 30 to 60 days to get paid by clients. Factoring solves this problem by financing their invoices. It provides businesses with cash that they can use to run the business. Companies often use the funds from factoring to: 1. […]
Factoring Cost vs. Rates (They are Different)
Summary: To a large extent, business owners think that factoring rates, factoring fees, and the factoring cost of a dollar are all the same. Although they are related, there are important differences. Actually, low factoring rates may translate to lower fees, but may not necessarily translate to lower costs per advanced dollar. This article helps […]
How Quickly Can Invoice Factoring Companies Provide Financing?
One advantage of factoring over other options is that many finance companies can get you funding quickly, usually within days. However, several things can delay the transaction. This article explains the factor’s onboarding process, potential transaction challenges, and how to streamline your funding process. We cover: 1. Overview of the process The onboarding process to […]
How Does the Factoring Advance Affect Your Cost?
When business owners negotiate with factoring companies, they usually focus on negotiating the best factoring rate. However, owners often don’t consider that the factoring rate is not the same as the factoring cost – at least, not on a “per-dollar” basis. The factoring cost has two major components: the rate and the advance. Getting the […]
What is the Factoring Advance?
Most clients are initially perplexed to hear that the factoring advance, which is paid as soon as the invoice is sent to the factoring company, is less than the full value of the invoice. Most factoring companies advance between 70% and 90% as a first installment and hold 10% to 30% of the invoice as […]
How to Evaluate Factoring Companies
The decision to use factoring to improve the cash flow of your company is not easy and should be done carefully. The success of your business depends on making the right choice and partnering with the right company. In this article, we discuss how to evaluate factoring companies effectively. The process is simple to use […]
What is a Factoring Company?
Summary: Factoring companies provide financing to businesses that have cash flow problems. They specialize in financing accounts receivable, which improves the client’s cash flow. Smaller factoring companies typically provide invoice factoring as their only service. However, larger providers typically offer additional products, such as purchase order financing, supply chain financing, and asset-based loans. This article […]
How to Finance Your Business in Canada (10 Options)
This article covers the ten most effective ways to finance a small or growing company. We cover several options that can be used to finance a wide range of situations. What do you need the funds for? There are several options you can use to finance a business. Some products are flexible and can be […]