Reports Affecting the Future of Factoring
Small business employment continued to show growth in December, 2010, a positive sign for the New Year. One specific *report released on January 17, 2011, stated that 46 percent of the Gen Y generation of 18-to-25-year-olds expressed a strong interest in starting their own businesses in the next five years, while eight percent said they already have a new business. Anyone with a new small businesses knows the importance of chah flow, especially in light of difficulties these days when they are trying to get a loan. A business can survive for awhile without sales or profits, but not without cash. One effective strategy to get cash fast is by using a factoring company that can typically turn most any business into a cash business without it having an impact on customers. Once you have delivered your products or services, there is a significant cash investment in that transaction. in today's slow economy, most customers are pushing the credit terms and stretching out 'net 30' to as much as net '90. Invoice factoring could be of benefit.
A factor provides funds of up to 90 percent against the value of a company's receivables. Factoring offers some strong benefits, including: cash for growth and the ability to take funding from the factor at an agreed upon initial payment percentage. Factoring companies will usually take a close look at the quality and spread of the debtors before making an offer, and they will also look at any bad debt record.
Today there are more than 30 million people in the United States alone with bad credit -- that means scores that are under 620. This makes it very difficult to obtain both personal and business loans, and it also makes obtaining credit with good terms tough as well, so this is another area where factoring can help you. simply spend the cash obtained from factoring on paying down credsit cards, and never again being latge with a payment becasue you now have some cash on hand, your credit scores should improve.
Factoring products on the market range from export factoring, providing factoring services for companies who export from the United States and Canada; P.O. funding to finance purchase orders when a company receives a purchase order and needs to purchase supplies to fulfill the order; and inventory financing, a solution promoting a company's growth by funding them when they must expand and purchase inventory. In addition, the company's professional rates are competitive because each client's circumstances vary. This may have an impact on the fees charged.
Once your business starts growing, and you are extending credit to more customers, the need for cash is greater. so by all means, look up a factoring company in your area and talk with them about how this age old strategy can assist you and your business.
Source: Poll commissioned by EMPLOYERS®, America's small business insurance specialist®.
About the Author
Kristin Gabriel writes for The Interface Financial Group, http://www.ifgnetwork.com , North America's largest alternative funding source for small business. The company provides short-term financial resources including invoice factoring. IFG operates on a local basis with expertise in accounting, finance, law, marketing and banking.
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