Monthly Archives: September 2009

Small Businesses with Two Employees are Ideal for Factoring

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The Interface Finanical Group’s Joe Sparling explains invoice factoring and how it helps clients. IFG provides short-term working capital to small clients when conventional financing does not work. Why? Because these smaller companies still have the same cash needs of a larger business.

The profile of IFG customers is one that is from 6 months to three years in business, with an annual sales one quarter of a million dollars to $10 million, and with several employees.

IFG’s invoice discounting purchases qualified invoices, which are a valuable asset to most companieas. It is speedy – from up to 48 to 72 hrs, and less than 24 hours a repeat customer. Factoring is a use it as you need it service, to be used until your cash flow needs are solved.

Real World Solutions for Small Businesses

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There is a website known as AllBusiness.com (www.allbusiness.com) that specializes in assisting small, growing businesses, consultants, and entrepreneurs. How? This site addresses real-world business questions and presents practical solutions, offering resources such as how-to articles along with sample template business forms, incouding contracts and agreements. You can also find much expert advice, links to other business news, guides, directories, blogs and even product comparisons.

But one thing that is NOT mentioned is how invoice factoring can assist small business entrepreneurs during the start-up phase of their companies.

IFG usually completes funding within 24 hours, and customers can be selective in the invoices that they decide to sell, because IFG does not expect to buy 100 percent of all their receivables. IFG has no minimum sales volume requirements, so you use the service only as you need it. Similarly, there are no maximum limits

Many companies ask, so how much can you advance against invoice? IFG can advance up to 90 percent against invoices you are selling. Our professional fees are competitive. Each client’s circumstances will vary and may have an impact on the fees. Send us a short, no-obligation application, and we will quickly provide a definite answer.

Trading Invoices for Cash

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It sounds like a new game, but in reality, factoring has been around for more than 4,000 years. Today it is even more difficult than ever before for a small business to obtain a loan, so smart companies have discovered invoice factoring, the best kept secret to staying in business these days.

Factoring involves three parties: a business, the factoring company and the debtor, otherwise known as a customer. The business provides a product or service and issues an invoice to the debtor or customer. The factoring company (or simply the ? factor, an old synonym for ? agent ) buys the invoice from the business and eventually collects on it from the debtor.

Often times a factoring company buys invoices in a couple of installments; the first being an advance for a percentage of the invoicem, while the balance of the invoice is held in reserve until the debtor pays.

A factor makes most of their money by subtracting a fee from the reserve, apx. 1 to 3 percent of the total invoice and terms typically state that the longer the invoice is unpaid, the larger the fee will be.

Mom and Pops Use Spot factoring

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Robert Spector is a Seattle business journalist who crossed the country from Bellingham to Newark, N.J., profiling what he taps as “independent retailers who cultivate community identity and camaraderie.”

The book he authored, “The Mom & Pop Store: How the Unsung Heroes of the American Economy are Surviving and Thriving” (Walker, $26), is the result of his effort.

Small businesses are going through trying times today, given the current economic climate. Many of these small bsuinesses, however, have been hanging on using strategies such as spot factoring. Also known as invoice factoring, or even accounts receivable financing, this is a way to survive.

What sets spot factoring apart is that it allows a business to factor one single invoice at a time, on an as needed basis.

Factors: Collection Recourse

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There are several kinds of factoring deals: If a factor assumes all of the responsibility for collecting on the invoice, the factor calls this a non-recourse deal. This is when the factor takes on all the risks associated with the invoice, and receives all the funds after the sale of the invoice. Non-recourse factoring frees up a business from the hassle of collecting on unpaid invoices.

On the other hand, non-recourse factoring might not be a good fit for all types of businesses because sometimes collecting an invoice can be an important part of a customer relations. Non-recourse factors can be aggressive collectors after all, the sooner they get the money, the better for them.

Factoring leaving ultimate responsibility for collection in the hands of the business is called recourse factoring whereby the factor tries to collect on an unpaid invoice for an agreed-upon length of time. After that, the factor has the recourse of returning the invoice to the business and making up for its loss with money from a future invoice. The other possibility, commonly used by spot factors, is to factor only some of a company’s reliable invoices. Unpaid invoices specifies that they can exchange it for a new invoice to collect their funds.

Five Reasons to Work with IFG for Factoring Serices

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Joe from IFG’s Austin Texas provides these six tips on video. Watch his video here.

1) IFG is fast. Get your factoring funds in as little as 24 to 48 hours.
2) IFG is extreemly flexible. Draw 30% this week on an invoice, then another 30% next week. No requirements.
3) No long-term contracts. Use IFG as you need them for invoice factoring.
5) No hidden fees. One rate covers all costs so there will be no application fees, no termination fees, and no do dilligence or wire fees.
6) You will be working with partners in the business when you work with IFG.

IFG Announces New Funding Solutions in Factoring

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New factoring funding solutions from IFG can aid small businesses in leveraging their assets. The new private label funding solutions include: Export Factoring, P.O. Funding and Inventory Financing to support the growing demand from businesses.

One of the solutions, Export Factoring, provides factoring services for companies who export from the United States and Canada. P.O. Funding finances purchase orders. Here’s how it works… When a company receives a purchase order and needs to purchase supplies to fulfill the order, IFG’s P.O. Funding solution will finance it. The new Inventory Financing solution funds a company when they need to purchase inventory to expand and grow.

IFG’s Chief executive officer George Shapiro said, “These new private label factoring solutions confirm IFG’s commitment to support the working capital needs of our small business clients in the face of the economic conditions and tighter credit constraints at mainstream banks.”

For more information simply go to www.ifgnetwork.com

Survey says Small Businesses Believe Recovery has Begun

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There are business owners across the world that do seem to be growing more optimistic about the economic recovery. This news, just in from a recent survey.

The September “McKinsey Global Economic Conditions Survey” says the number of businesses believing GDP will rise in 2009, and grew from 26 percent six weeks prior, to 40 percent in the most recent survey.

Additionally, 19 percent of respondents believe the recovery has already begun, while almost two-thirds believe their companies are not even in crisis. 45 percent still say that “cutting operational costs” is a top business priority.

Furthermore, business owners seem to expect a long, slow recovery compared to the 20 percent who indicated that they expected a fairly quick recovery.

Also today, the Huffington Post ran an article about SCORE for small businesses. The counselors to America’s Small Business is one of the Small Business Association’s(SBA) nonprofit resource partners assist small businesses nationwide. Here you will find more than 11,200 volunteer business counselors in 370 local chapters.

This group also gives online advice from its CyberChapter at www.score.org. The counselors have hands-on experience in a wide array of industries and are matched according to their clients needs. Some are retired while others are still working.

Many entrepreneurs and small businesses are struggling today due to the economic recession. The definition of “small business” varies by country and industry, but it generally means that the business has under 100 employees in the U.S.

And finally, other adventuresome entrepreneurs found an age old solution to stay afloat – known for more than 4,000 years as invoice factoring.

For more information on how you can use factoring as a strategy to grow your business go to www.ifgnetwork.com

Read more at: http://www.huffingtonpost.com/jerry-chautin/small-business-advice-is_b_288751.html

Half of Businesses with Less than Ten Workers Offer Health Benefits

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A 2007 Kaiser Family Foundation study confirmed the connection between the size of a firm and whether it offers health insurance, showing that about half of businesses with fewer than 10 workers offer health benefits to their employees.

The cost and availability of health insurance is one of the nation’s small business owner’s primary concerns, typically driven by insurance premium and administrative costs.

According to the president of the National Small Business Association (SBA), Todd McCracken, “Congress hasn’t approached health care reform from a small business owner’s standpoint.”

While many small business owners are afraid that their priorities are getting lost and that the government is taking too long to recognize their needs, other small businesses are finding invoice factoring, useful to bridge the gap, resolving the current cash flow problems due to the economy,” said IFG’s Chief Executive Officer George Shapiro. “Accounts receivable factoring leverages the funds that a company expects to have coming in 30, 60 or 90 days out, providing cash to cover payroll and other business expenses including their employees’ insurance.”

Standard accounts receivable factoring has been around for more than 4,000 years. Invoice factoring benefits businesses that do not get paid for 30 to 60 or 90 days by advancing up to 90 percent against invoices. IFG looks at the creditworthiness of the client’s customers and can fund within as little as 24 hours. The company does not expect to buy 100 percent of a company’s receivables, and there are no minimum or maximum sales volume requirements.

Accounts receivable factoring differs from traditional bank loans in that bank loans involve two parties, while factoring involves three parties. Banks base their decisions on a company’s credit worthiness, whereas factoring is based on the value of the receivables. Factoring is not a loan — it is the purchase of financial assets, or receivables.

Sources: U.S. Dept. of Commerce, Bureau of the Census and International Trade Admin.; Advocacy-funded research by Kathryn Kobe, 2007 (www.sba.gov/advo/research/rs299tot.pdf) and CHI Research, 2003 (www.sba.gov/advo/research/rs225tot.pdf); U.S. Dept. of Labor, Bureau of Labor Statistics; National Federation of Independent Business; Kaiser Family Foundation.

Small Business Survival and Factoring

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Did you realize that companies with fewer than 500 employees accounted for 64 percent – 14.5 million – of the 22.5 million new jobs between 1993 and the third quarter of 2008? However the survival rate of a new businesswas only 69 out of 100.

What if those who didn’t survive had learned how to leverage factoring to pay bills and employees, produce more and stay in business?

In addition, small businesses represent 99.7 percent of all employer firms; employ more than half of all private sector employees; pay 44 percent of total U.S. private payroll and have Have generated 64 percent of net new jobs over the past 15 years.

But according to new Census data, 69 percent of new employer establishments born to new firms in 2000 survived at least two years, and 51 percent survived five or more years. Source: U.S Dept. of Commerce, Bureau of the Census, Business Dynamics Statistics.

Rather than waiting to get alternative financing through banks or venture capitalists during a difficult economy like today, factoring companies can usually complete funding within 24 hours.

For more information about small business factoring go to www.ifgnetwork.com.

Source: U.S. Dept. of Labor, Bureau of Labor Statistics, Business Employment Dynamics.