Monthly Archives: January 2010

Can Factoring Companies Resolve Credit Card Debt?

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Taking on credit card debt is one factor that contributes to business failure. In the last five years, credit cards all but replaced loans for many small businesses, until the economic downturn, and the tightening of the credit markets.

Today outstanding personal loans can factor into an individual’s credit card terms and agreement, and for most credit card issuers the amount of money you have in your bank is also taken into consideration. In addition, consumers with credit card debt should stay clear of cards with reward programs.

One way to clear credit card debt is through accounts receivable factoring. choose an invoice that you know is due, say in 30 or 60 days. Then use a factoring company like IFG. You wil receive funds within as little as 24 hours. Pay your credit cards down to a minimum, and then use them obly once a month for small business expenses. It will improve your credit and resolve your credit card debt.

For more information on factoring invoices contact IFG Toll Free: USA – 877-210-9748 or 877-210-9748, Canada.

Small Business Loans and Economic Growth

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The Federal Reserve said today that banks are not giving small businesses enough access to credit. Nor are they providing enough small business loans that will ultimately support new jobs, let alone economic growth.

Some banks (large financial institutions) are opening lines of credit to small businesses via small business loans and small business credit cards. And until they get these programs in place for small business lending, the banks are stifling the economic growth.

Many analysts believe that a better economy is the only thing that will open up small business lending. And in the meantime, small businesses can use tried and true solutions that we already know work, such as factoring accounts receivable.

Factoring companies like IFG have numerous testimonials from small businesses who have used this financial tactic successfully, whether it is for single invoices, also known as spot factoring, or multiple accounts receivable invoices.

IFG Steps up Marketing for Accounts Receivable Factoring

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IFG it is offering accounts receivable factoring as an alternative form of financing to the reported 51 percent of small businesses that have experienced cash flow issues in the last 90 days. In the wake of banks’ cuts in small business lending, small businesses are seeking alternative means of funding to ensure success in 2010.

According to the December Discover Small Business Watch 45 percent of the 700 small business owners surveyed have not experienced cash flow issues, leaving 4 percent who are not sure.

Specifically the financial products that IFG is marketing include: 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.

Take a look at the IFG Frequently Asked Questions (FAQ)

Ten Tips for Business Planning and Budgeting

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It is really important when you are running a small business to know your company’s mission. Take a good look and examine your motives, and make sure that you have a passion for owning your business.

You will need to be willing to commit to long hours, discipline, and be ready for continuous learning.

It is a good idea to conduct a competitive analysis of others in your market, including their products, website, advertising and promotions, advertising, and services. Always be on the watch for the outside influences that could affect your business.Think of a budget as a useful tool – a written financial plan that helps you set goals and measure progress.

When it comes to budgeting, determine your monthly and quarterly sales revenues targets. Then based on past experience, estimate your cost of goods sold (e.g., 70 percent of sales.) Subtract that from the sales revenue, and you will be able to determine the estimated gross margin.

Take a look at the variable expenses such as commissions and travel, or vendor related monthly services, versus the fixed expenses. Those could include your taxes, supplies that are the same, utilities, etc. Subtract these expenses from your gross margin to arrive at your estimated net income. This would be the number before paying your federal taxes.

It is easier to look at your annual budget quarterly to monitor progress. A monthly budget can be a very useful tool to set goals to meet and track your financial plans. Put strategies in place like accounts receivable factoring, which can help your busienss stay on track. Don’t forget to measure your progress.

For more information on factoring companies like IFG, go to www.ifgnetwork.com

2010 Construction Outlook Includes Construction Factoring

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The 2010 Construction Outlook forecasts an increase in overall U.S. construction stated due to improvement for housing from extremely low levels and broader expansion for public works, the level of construction starts in 2010 is expected to climb 11 percent to $466.2 billion. Source: McGraw-Hill Construction

U.S. construction will be helped by growth for several sectors, following three straight years of decline that brought total construction activity down 39 percent from its mid-decade peak

Stimulus act benefits should broaden in scope, lifting not just highway construction but also environmental public works and several institutional structure types.

After reaching bottom earlier this year, the overall level of construction activity projected for single family housing should see moderate improvenmenet in expansion in 2010.

Highlights of the 2010 Construction Outlook:

� single family housing to advance 32 percent in dollars.
㩒 percent increase in the number of units to 560,000
• Multifamily housing to improve 16 percent in dollars and 14 percent in units
• Commercial buildings will drop 4 percent in dollars, following a steep 43 percent drop in 2009.
• Weak employment will further depress occupancies, and this makes it difficult to justify new construction.
• Institutional buildings should begin to stabilize after losing momentum in 2009.
• Square footage will retreat another 2% after sliding 23 percent in 2010. The dollar amount of construction for this sector will increase 1 percent,
• Growing amount of energy-efficiency upgrades to federal buildings and continued strength for military buildings.
• Manufacturing buildings will drop 14 percent in dollars and 3 percent in square feet.
• Public works construction is expected to rise 14 percent, given more wide-ranging strength across all project types.
• Electric utility construction will slip 3 percent, continuing to settle back after a record high in 2008.

Construction factoring can assist growing The construction industry is dependent upon economic business cycles, therefore even changes in interest rates and tax laws affect individual and business decisions related to construction. Changes in state or local regulations or budgets can result in new construction or a cancelled job.

There has been an increase in factoring among contractors during the last year, and it is helping to provide the cash flow needed to pay suppliers, meet payroll and pay for insurance, as well as workmans compensation. Construction factoring enables businesses to obtain funds based on their current accounts receivables, so they can go ahead with the next phase of a project, rather than wait till the invoices are paid.

Construction is one of several industry sectors that can benefit from construction factoring. Why? Because when factoring is used, the sub-contractor, or construction company, does not have to wait for payment before starting on the next phase of a project, or begin construction on a new project. With invoice factoring, the sub-contractor or construction firm can realize quick turnaround, from 24 to 48 hours, on accounts receivable due for completed stages of a construction project. With construction invoice factoring, the construction company, or the sub-contractor, can be paid overnight for accounts receivable invoices, which speeds up cash flow and improves the company’s ability to start immediately on the next phase of construction for each project.

The Difference Between Merchant Cash Advances and Factoring

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A low-credit merchant cash advance is typically structured as a purchase of future credit card sales for a business with a merchant account. Typically, a finance company estimates the credit card sales of a small business and projects how it will fair in the coming months. This is based on the information provided on the application.

Other factors include industry type and the details about customer transactions in deciding whether to provide a merchant cash advance. Then based on the credit card sales estimate and the risks assigned to these other factors, the business cash advance company will offer to pay cash up front to the business. This can often take as long as a week.

On the other hand, factoring is the process of purchasing commercial accounts receivable (invoices) from a business at a discount. Factoring companies like IFG will buy your invoices for less than face value and then be paid in full by your customers. The difference between the discounted rate and the face value is the factors profit or incentive for buying your invoice upon submission.

Many small business owners believe that factoring is faster and safer than cash advances from their merchant banks.

Reuters Reports NFIB Small Business Optimism Down

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Today the National Federation of Independent Business – NFIB – reported its December small business optimism index fell for the second month from 0.3 point to 88.0.

According to the Federation, weak sales through the end of the year of 2009 caused small business owners to be less optimistic about 2010. The are not hiring, or restocking, nor spending, and many are having to liquidate their inventories

Small business owners with plans to make capital expenditures over the next couple of months rose only two points to 18 percent. This is just two points above the 35-year record low. Only 7 percent of those surveyed believe this is a good time to expand facilities, which since November is down 1 point. 92 percent of those small business owners surveyed were not interested in borrowing.

The NFIB didn’t ask if anyone of these small business are using invoice factoring to make ends meet.

Invoice Factoring Mitigates Tight Credit Markets

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A Treasury report released late Friday stated the country’s largest banks cut their collective small business lending balance by another $1 billion in November. This was the seventh straight month of declines.

Twenty two banks who benefited most from the Treasury’s bailout programs have cut their small business loan balances $12.5 billion since last April. That was when the Treasury began requiring them to file monthly reports. The banks’ total lending has fallen 4.6% in that seven-month period, to $256.8 billion.

Banks say they are lending less for one main reason, and that is because small businesses are risky borrowers. Additionally, many new business owners simply do not want to borrow. When sales are slow, the last thing people want is debt.

However tighter lending standards have left most small businesses unable to access the credit they need to grow. Many small business owners say they have not been able to finance buying materials to fulfill customer orders.

According to the Federal Reserve’s most recent Senior Loan Officer Study, released in October, lending standards have been growing more restrictive over the last three years.

There is one small business strategy that a number of small business owners have started to employ – and that’s invoice factoring. Ideal for businesses with customers who pay 60 to 90 days out, factoring leverages small businesses accounts receivables, so they get paid within 24 to 48 hours.

Confidence for 2010 – Says KPMG Survey on Construction Industry

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According to the annual global construction survey by KPMG, the construction industry globally is confident about business in the year the 2010. Even after the worst recession for 60 years, most construction industry professionals believe that profits will stay the same or increase by mid-year 2010. At least two thirds of the industry’s construction companies took part in the survey.

This research covered 30 countries, finding that the sector appears to have weathered the economic storm. 64% reported that they believed business would stay the same or improve.

Experts believe that one reason may be that the long term nature of many construction industry projects may have provided protection against the recession.

Other reports have warned that commercial and residential property work has suffered because funding has dried up thanks to the global financial crisis, and although KPMG’s construction industry survey reported a fairly positive outlook, some analysts warn against believing it.

Sub-contractors are often required to wait for payment before starting on the next phase of a project, or to begin construction on a new project. With invoice factoring, the sub-contractor or construction firm can realize quick turnaround (often within 24 hours) on accounts receivable due for completed stages of a construction project.

Thanks to construction invoice factoring, the sub-contractor, can be paid almost overnight for these accounts receivable, which speeds up cash flow and improves the company’s ability to start immediately on the next phase of construction.

There are a substantial number of contractors in companies who have made good use of construction factoring, in order to keep their businesses flowing, in between invoices.

Banks Removed $1 Billion from Small Businesses in Seven Months

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Today according to a segment on CNN, the Treasury of the United States, confirmed that banks have removed about $1 billion from their small-business lending programs since last November.

What does this mean exactly? It means banks have reduced their lending to small businesses for more than seven months and the total reduced to small businesses is $12.5 billion, since April of 2009.

And now one reason unemployment is at ten percent is because when the banks reduced money loaned to small businesses, small businesses, the backbone of the U.S. economy, could no longer hire employees, causing higher unemployment.

Many small businesses have been able to weather the storm and survive, thanks to strategies like invoice factoring, ghard work, and loyal workers who worlked in many cases for less money just to keep their jobs and some income.

Banks say they are lending less primarily because small businesses are risky borrowers. This has also left small businesses unable to access the credit they need to grow. Many small business owners say they have not been able to finance buying materials to fulfill customer orders.


Invoice factoring is perfect for businesses with customers who pay 60 to 90 days out, factoring leverages small businesses accounts receivables, so they get paid within 24 to 48 hours.