Daily Archives: September 28, 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.