Monthly Archives: November 2009

Construction Factoring: An Economic Trend in 2009

Posted on by
9

During today’s challenging economic times, and the tightening of the credit market has been very hard on the construction industry in general. Whether you are a general contractor or sub-contractor, you may be experiencing cash flow problems. Many contractors use progress billing, which entails risks and often creates cash flow problems such as purchasing supplies, meeting payroll, as well as the benefits and Workers Comp. for employees.

The construction industry is comprised of many types of businesses who could take advantage of factoring, including architects, appraisers, asphalt companies, brick masons, carpenters, drywall contractors, electrical contractors, engineers, flooring and tile contractors, inspectors, and many more.

There has been an increase in using factoring among contractors, which provides the much needed cash flow to pay suppliers and meet payroll. Construction factoring enables businesses to obtain funds based on their current accounts receivable. Each week when you invoice for the work you completed, you also send the invoices to the factor and receive an advance. Construction factoring been used in the construction industry for many years.

End of Year Financial and Tax Review

Posted on by
18

It is the time for year-end financial and tax reviews, and this year is particularly important due to the markets and the economy. There may be some big tax changes as due to the deficit.

You can go to www.irs.gov, but here are some of the highlights: Congress extended the First-Time Home-Buyer Tax Credit and so it is more generous than before as of Nov. 6, 2009.

The new provision is a tax credit for up to $8,000 for 10 percent of the cost of a home. The credit is also refundable. That is if a buyer doesn’t owe $8,000. The law also has more generous phase-outs. The credit now begins to disappear for single taxpayers with modified adjusted gross incomes of $125,000 and married couples with incomes of $225,000. The buyer must have a contract for a new home in place before May 1, 2010. There is a cap however for anyone buying a home for more than $800,000 – they will not get ant credit.

Another area to review is how to catch up on your payables. One way to get ahead before the new year starts is invoice factoring. Review your receivables prior to the end of the year. For those due in 60 to 90 days, contact a factoring company like IFG and factor thes outstanding invoices. That way the funds will come in now.

SBA’s 7(a) Loans in Trouble

Posted on by
3

The latest news for small businesses is that the Small Business Administration (SBA) no longer has enough economic stimulus funds to continue with the 90 percent guarantee on its flagship 7(a) loans.

This higher guarantee helped bring 1,200 lenders back to the SBA’s loan programs, and the lower fees made the loans more affordable for borrowers. SBA lending, which had slowed to a crawl rebounded BECAUSE of these breaks. The statistics show that through November 20, the number of 7(a) loans that were approved by the SBA this fiscal year, which began October 1, was up 80 percent over the same period a year earlier. The total dollar volume jumped 147 percent.

Now borrowers must decide: 1) to be put on a waiting list to get the higher guarantee and lower fees on their loans if additional money becomes available; or 2) apply for a regular SBA loan.

Without these reduced fees, a small business might conclude that an SBA loan costs too much. But there is another way, and it is known as invoice factoring.

Small Business Financing Forum Yields Ideas: Single Invoice Factoring

Posted on by
13

Our nation’s Treasury Secretary Tim Geithner asked financiers to step up and do more to fix the damage they helped cause because, “the credit crunch is not over.” He presided at a small business financing forum in Washington hosted by the Treasury. Geithner and top Washington officials, including Small Business Administrator Karen Mills, met with bankers and small business owners last Wednesday.

Geithner mentioned things appear dramatically better for large companies, but admitted that it is not over for small businesses across the country. Why? “Banks bear some responsibility for the extent of the damage caused by the crisis,” he said.

But this is not going to be happening soon enough for many frustrated small businesses – especially during the holidays. There is one strategy that more and more small business owners have started to use. Invoice factoring, has long been used during recessions nationwide, is catching on again. And this year, many business owners are just using single invoice factoring, or factoring one outstanding invoice at a time, until the economy swings bank in their favor.

For more information on how you can use single invoice factoring, visit www.ifgnetwork.com

Small Business Unemployment and Invoice Factoring

Posted on by
14

According to the Small Business Administration, an estimated 90 percent of U.S. businesses are family-controlled, and experts say the prolonged economic downturn has hurt a significant number of them. About 4.3 million businesses with 19 or fewer employees closed during the fourth quarter of 2007 through the fourth quarter of 2008. (Source: The Bureau of Labor Statistics.)

Many small businesses are having to let go of their employees, because their revenues are down in this current economy. But what if they had simply started to employ invoice factoring in order to hang on long enough to weather the economic storm? Maybe if that had been the case, the last year’s numbers of unemployed would have been better.

Here is a readout of the U.S. Unemployment rates, dating back to May, 2009.
2009 May = 9.4
2009 June = 9.5
2009 July = 9.4
2009 Aug = 9.7
2009 Sept = 9.8
2009 Oct = 10.2

Factoring has long been a remedy during troubled economic times. For more information on how you can work with The Interface Financial Group, Inc. (IFG) go to www.ifgnetwork.com

Third Quarter 2009: The Economy and Small Business

Posted on by
21

The latest quarterly indicators report is out from the Small Business Association entitled, Third Quarter 2009: The Economy and Small Business.The U.S. economic recovery began in the third quarter of 2009 as real gross domestic product grew an annualized 3.5 percent. The public expenditures area grew, particularly the first-time homebuyers credit as well as the “cash for clunkers automobile rebates, however real consumption rose at a 3.4 percent annual rate.

The SBA report also says there has been strong growth in real private fixed investment, real exports, and real imports. This all thanks to a strengthening of the global economy.

U.S. unemployment rate rose to 9.8 percent in September, while total nonfarm payroll jobs lost since December 2007 are at 7.1 million.

It appears that the SBA lending went up dramatically with volume up $247 million and 504 loans up $305 million from June to September. The number of venture capital deals slipped, but dollar volume rose from earlier in the year.

All of this news is good, but most small to medium-sized businesses are still feeling the cash flow crunch problems. That makes factoring even more appealing now. It is called survaval mode, and those companies that deploy invoice factoring, even if it is just one invoice at a time, will be better equiped to survive.

Estimated 20 Percent Growth in Chilean Banks’ Factoring

Posted on by
16

The International Factoring Aassociation reported that the Chilean banks factoring business forecast is estimated at about a 20 percent growth in 2010. This is due in part to an improving economy.

The central bank’s latest survey of experts show they expect the Chilean
economy to contract 1.5% this year, but expand 4.3% next year and 4.5% in 2011.

It is believed that those factoring firms that belong to banks will see their business volume return to pre-crisis levels in 2010 thanks to the economic recovery.
The factoring industry has long been considered a good barometer of the country’s
economy.

For more infomrmation about factoring visit http://www.ifgnetwork.com

What Labor Dept. Report Means for Small Busiess

Posted on by
19

The Labor Department report yestrday suggested that the pace of job losses is slowing in the United States, which is hard to believe for many of the country’s small businesses. The unemployment rate is at a 26-year high, and many small businesses worry about making payroll. Witht he exception of those who have discovered invoice factoring.

President Obama is worried about the current unemployment rate at 10.2 percent,claiming that the improved economic picture has not yet to translated into job growth. He is asking business and economic experts to come up with new ideas on how to create more jobs and he plans to host a job summit in December, gathering CEOs and small business owners, economists, financial experts, as well as labor union and non-profit group representatives, to figure out how to deal with the job market.

“Small businesses and large firms are demanding more of their employees. They’re increasing their hours, and adding temporary workers, but these companies have not yet been willing to take the steps necessary to hire again,” said Obama.

As many small business owners know, making payroll is a channenge. However many of IFG’s customers have discovered invoice factoring as an excellent strategy to make ends meet, incuding making payroll.

SBA Office of Advocacy Research Points to Loan Falloff

Posted on by
17

Entrepreneurship is one of the best way of re-energizing our nation’s economy, yet one of the top issues for our nation’s small to medium-sized businesses is access to credit, especially during this economic downturn.

In a recent July 2009 compendium from the Small Business Association Office of Advocacy, we learn more details from recent surveys showing small business lending standards have grown more stringent and demand for loans has fallen, so now it’s even more important to control costs, manage cash flow and refocus strategies.

After reviewing the statistics, which includes data through 2008, it is clear that small businesses will benefit from accounts receivable factoring to get through tough economic times.

SBA e200 Program for Small Business Expands in 2010

Posted on by
17

There was news today regarding The U.S. Small Business Administration’s Emerging 200 initiative (e200), which is a jobs and growth stimulation effort targeting inner-city small businesses, and including Native American business owners. e200 was launched in 2008 with a goal of identifying 200 inner-city businesses across the country that show a high potential for growth, then providing them with the network, resources and motivation required to build a sustainable business.

One of the 23 cities that applied for the program was Milwaukee. In 2010, the expanded initiative will emphasize Native American business owners in Milwaukee and other cities, who in turn get the nine-month training. This will include about 100 hours of classroom time per participant, offering small business owners a chance to work with mentors, and develop peer connections, and get to know city leaders and their financial community.

The program probably won’t mention invoice factoring, but all of these small businesses could profit from learning more about how to keep their cash flow going, especially if they have a new business.