Monthly Archives: August 2011

Report Indicates Hiring Slowed in August

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An independent study (July 24 to August 23) by Intuit has shown that small businesses hiring slowed in August and employers reduced hours. There is speculation that the stock market in August had its effect on job creation. The study said small businesses added 35,000 jobs, and this was just after increasing employment in the month of July by 40,000. Intuit also noted that the average work week for small business employees fell 0.3 percent to 24.9 hours. Intuit is a payroll company and their study is based on responses from apx. 66,000 employers, most of whom are with companies that have fewer than 20 employees.

In another survey by Reuters non-farm payrolls increased about 80,000 this month after a 117,000 gain in July. The same group warned that a drop in August employment should not be looked at as a sign that the economy was back in a recession. In fact, the United States economy grew at a 1 percent annual rate in the second quarter after expanding only 0.4 percent during the first quarter 2011.

Small businesses are still trying to make ends meet, with recovery delays suggesting that they are trying out new financial tactics such as invoice factoring.

Factoring enables a small business to establish cash flow when times are tough, so that they can continue paying employees, bills, and produciton towards more new business to survive.

Maintaining Your Cash Flow

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Many small businesses are often weak in the area of knowing how to maintain enough cash flow. This is an area where your financial team should think about tactics that can keep cash flow going, so that your company can continue to meet bills, purchase new equipment or supplies and pay its employees on time.

Factoring is strategy that can help. Sometimes businesses use a use it as you need it accounts receivable factoring funding option, where each invoice purchase is a separate transaction and does not form part of a portfolio lending approach. The transaction is modeled as a buy-sell transaction. The Interface Financial Group (IFG) first undertakes a due diligence that typically takes one to two business days. Once completed the client is at liberty to offer invoices to the factoring company to buy.

Once the invoices are received, the factor checks the credit of the debtor named on the invoice and makes sure that the sale represented has been satisfactorily completed. Then the debtor is advised of the purchase by IFG and the client receives their funding.

A Slow Economic Recover Means Factoring

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As the global economy slowly recovers, many large companies continue to shore up their cash by delaying payments to small businesses. At the same time, vendors to these same small suppliers continue to demand faster payment. The result is putting small companies out of business, and why SMEs are turning to alternative funding options such as invoice factoring.

Strong-arm strategies by bigger companies restricts the small supplier’s cash flow, and since small businesses have little leverage when dealing with their larger firms, they are often forced to accept very undesirable terms. What’s more, vendors are demanding prompt if not faster payments. This is creating a serious cash-flow crunch cycle from customer to supplier to vendor, pushing many small to medium-sized businesses to the brink.

Factoring Services Can Eliminate Debt Collectors

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Have you ever heard about The Fair Debt Collection Practices Act (FDCPA)? This organization helps to protects consumers who are being harassed by debt collectors, and no doubt, there is a fair amount of that going on lately thanks to our economic situation. This group can help you if the same debt collector continues to call you or has already contacted you multiple times; if a collector has ever threatened you with legal action, or any action against you, meaning legal or otherwise; or if they ever bother you at work; or have they ever contacted anyone else on the matter such as a spouse or employer?

The truth is – a debt collector can con tact you regarding a debt, and the telephone calls alone can be enough to drive you nuts. There is an alternative solution that might help, called accounts receivable factoring.

If you are in business for yourself, you could factor one or two invoices via a factoring services company, you might be able to pay off your debt so the creditors will leave you alone. Eliminate debt collectors for good. Contact a factoring company like IFG today.

Small Business Authority Tally is at 107.26 Points

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The SB Authority Index for the month of July 2011 was released by the Small Business Authority and the tally is at 107.26 points, up .96% from a year ago in June of 2011. The increase is related to approved SBA loan volumes, retail sales and the Russell microcap index. Additionally, some other components of the index include Newtek’s proprietary merchant processing volume, the ADP national employment report, plus the estimated small business default loan rate along with the prime rate.

While analysts note the small business economy has been extremely sluggish and still struggles to grow, they also see a slight availability of credit, flat job growth and slow retail spending. Many believe that keeping interest rates at zero percent creates inflation and weakens the dollar, which is not good for small businesses.

Small companies hanging on need to keep cash flowing in order to grow and sustain, and one method that appears to be helping is accounts receivable factoring. With slow business, a least being able to leverage accounts receivables can help keep a small business going.

What is Receivables Factoring?

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A receivables factoring company has enough cash to pay a business right away for credit-worthy receivables. This is why there are a growing number of commercial receivables factoring companies willing to do business. This growing need for working capital guarantees that companies will want cash as quickly as possible. The way receivables factoring companies make their money is via a rate of discount of the invoice, which gives them a margin of profit.

Receivables factoring is not a loan but rather it is the purchase of financial assets, or receivables. It differs from traditional bank loans as follows. Bank loans involve two parties, and factoring involves three parties. Factoring is based on the value of the receivables.

Bill Paying Tips for Small Businesses

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This happens to all of us when we use credit cards, and especially during tough economic times when we are scrambling for new business. We either lose or forget about paying an important bill, then end up worrying, and wasting time chasing it down, or worse, wasting money on late fees. If you need some help – here are some tips on paying your bills.

Today some people still get their bills via mail, as opposed to online. And worse yet, many of us are in between. Some bills are on auto-pay, others are digital payment programs, and still others are snail mail. When you get the mail, sort through it and separate pending bills from all of your other mail. Next immediately place your pending bills in a basket, folder or envelope marked Pending Bills or Bills to Pay. All pending bills should be together in one spot. You can open them and place the payment envelope up with the date of when the bill is due marked visibly on the back of the envelope. Just remember to periodically look at these due dates. All paid invoices or receipts can be filed in the individual categorized pocket folders in preparation of tax time. Next make sure you designate two to four regular days per month to review and pay your bills; and make sure you sit and pay them in one place. Like your desk with these items nearby: checkbook(s), stamps, pens, pencils, tape, envelopes, a stapler, return address labels and a calculator.

Use a check register or online in a spreadsheet or expense software on your computer to record payments, then put paid invoices and/or the receipts into a file folder. Once you pay your bills, mark your copy or section of the invoice with the date the bill was paid, the amount paid, and if you want, the check number. Then, file each into the appropriate pocket of your bill paying folder-with one pocket for each such as supplies, insurance, utilities, rent, credit cards, etc.

If you need a little boost for cash to pay these bills, remember to contact an invoice factoring company who can cash in your accounts receivables ever month so you will have plenty of cash on hand. Factoring is an excellent way to get out of debt.

Invoice Factoring Helps Business Owners Keep Retirement Plans

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Like it or not, many entrepreneurs who own a small business are now very worried about their ability to save money for retirement. Almost everyone knows that typical retirement plans include a 401(k) plan and a personal IRA. But today, many businesses are having to choose between paying their bills to stay in business, and cutting their retirement plans. Why? There is simply not enough to go around every month.

Invoice factoring, is an alternative financial strategy that might help ensure adequate funds for all your bills, plus retirement plans. and it could actually help you save more funds to supplement your retirement. Factoring enables you to cash in on working capital you need to meet all of your obligations every month.

Invoice factoring is a 4,000 year old business practice wherein a business sells its receivable invoices to a third party at a discount in exchange for immediate cash. Many businesses use factoring to cover short-term cash needs during periods in which these needs exceed cash flow. Factoring receivables is not a bank loan; it is not the business credit that is up for inspection but rather the debtors credit.

Making Insurance Payments and Invoice Factoring

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If you own a small business, no doubt money is still tight these days, given the slow economic recovery. However, it is still important to protect your business with the right kinds of insurance. What is hard these days is to make sure the premiums are being paid on time, regardless of the state of your cash flow.

Making timely payments on your insurance policies is important, but what if the cash simply is not available to make the payments on time? A defaulted payment could result in a canceled policy. Then your business is exposed to potential losses. This is why many small businesses are relying upon invoice factoring for an immediate influx of cash.

Factoring receivables is a practice wherein a business sells its accounts receivable invoices to a third party at a discount in exchange for immediate cash with which to finance continued business. It is a method used by businesses to cover short-term cash needs during periods in which these needs exceed cash flow. Factoring receivables is not a bank loan; it is simply a means to get cash fast.

Invoice Factoring Assists in Hiring Costs

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When your business cannot afford to hire additional workers, it can cripple you. To make sure that income is not lost, small business owners are turning to factoring as a means of creating immediate cash flow. But many people have not heard of factoring companies. What are they?

Invoice factoring companies help a business sells its accounts receivable invoices to a third party at a discount in exchange for immediate cash with which to finance continued business. It is a method used by businesses to cover short-term cash needs during periods in which these needs exceed cash flow. Factoring is not a bank loan; it is not the business credit that is up for inspection but rather the debtors (i.e., the party named on the invoice) and there is nothing to repay. Once popular in early merchant banking activities, factoring companies are experiencing a resurgence in popularity as many small businesses struggle in the current financial climate.