Monthly Archives: September 2011

Hire Employees Fast with Little Risk via Factoring

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Full-time employees these days can be a huge risk – with salary, health insurance, 401k contributions, sick leave, vacation time, and finally retirement benefits. A number of businesses are using staffing agencies for temporary employees instead.

Temporary employees are often paid less than full-time workers plus they do not get benefits. They can be fired at will, and the bad news is that a temporary agency charges the company fees from 25 and 100 percent of the salary of the contracted employee.

In order to make sure you do not lose income, if you need employees fast, know that there is a trend for some business owners to use factoring services.

Invoice factoring pays within 24 to 48 hours, so place your ads today!

Invoice Factoring Pays for New Media Marketing

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A small business today must plan ahead to spend hard earned money on their website, and sometimes marketing and social media campaigns need to be created in an instant, responding to current trends and customer needs. Waiting for customers to pay invoices these days during the downturn can sometimes take weeks or even months. This makes it especially difficult to manage fast track marketing campaigns.

But the cash received from factoring is available immediately, meaning that as the market and trends change, the small business owner can respond immediately with custom-tailored campaigns and offers. And unlike a bank loan or line of credit, you have no risk with factoring. Because there is basically nothing to repay, there is no need to feel that every penny spent on a marketing campaign needs to be recouped.

Invoice factoring services provide one of the best ways to kill two birds with one stone, so to speak, and finance your small business marketing and advertising campaigns. This is a great way to grow your client base as well as your business.

Who Can Use Factoring Services?

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Factoring is best suited for a company selling goods and services on 30 or 60-day payment schedules. If the company cannot afford to wait for payment, then invoice factoring can help.

This is a common problem for many companies because they have immediate expenses such as payroll, supplies, rent, office equipment, or quarterly taxes and other payments that just cannot be deferred. Factoring companies solve this problem by advancing you payment on your invoices, giving you access to funds almost immediately. It is a good solution if your company has a cash flow problem and the speed with which clients pay their invoices.

Factoring companies usually buy your invoices in two payments. The first is the advance, which is usually around 80 percent of the invoice. The remaining 20 percent or so is held in reserve until the customer pays their invoice in full. At that time, you will receive the remaining balance of the invoice, less any of the factoring services fees.

New Job Bill and SMEs

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Small business enterprises (SMEs) are cautious about the new job bill which touts a payroll tax cut that is supposed to create jobs. At this time the National Small Business Association (NSBA) president Scott Gerber says the plan might help SMEs but it is a temporary solution. He also notes a little-noticed provision in the bill enabling entrepreneurs to collect unemployment insurance while they start a new company.

In the meantime, many small business owners who do not see that the bill will help much at this point have resorted to old school methods such as invoice factoring.

How to Use Construction Factoring

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There may be a silver lining in the economic storm for some folks… As a result of the mortgage crisis, banks, trusts and real estate companies have foreclosed on properties and now are offer them as a short sale property. This can be an opportunity for the buyer who has money and is seeking a property at discounted prices.

The challenge is that properties acquired in a short sale often need repairs and improvements which also usually need to be made before the sale for the best return on your investment. And this is a labor and material intensive process, requiring cash that must be laid out right away. Workers need to be paid every two weeks and supplies are usually C.O.D. For companies that may not have a large reserve of cash, invoice factoring might be the solution to the problem.

Construction factoring is a practice wherein a business sells its accounts receivable invoices to a third party at a discount. This is all done in exchange for immediate cash with which to finance continued business. It is a method used by businesses to cover short-term cash needs.

By using construction factoring a remodeler who has outstanding accounts receivable invoices will not have to wait 30, 60 or even 90 days before receiving payment and moving on to the next job.

Commercial Factoring Values Invoices

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Does your accounts receivable department have a stack of unpaid open invoices? These invoices may represent an asset — they might even be collateral for commercial factoring. This practice enables a business to sell its accounts receivable invoices to a third party at a discount in exchange for immediate cash.

Commercial factoring can be used to cover short-term cash needs during periods in which these needs exceed cash flow. But for your invoices to be considered collateral two conditions must be met: 1) your customer must agree that work has been completed as promised or goods delivered and 2) your customer must be deemed credit worthy.

Note it is also important for the commercial factoring process to be a transparent for both parties.

NFIB Index is Weakest Reading in a Year

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Sadly, the National Federation of Independent Business ahttp://www.ifgnetwork.com/ifgblog/nfib-index-is-weakest-reading-in-a-year/nd the optimism index has decreased to 88.1. This is the weakest reading we have had since the month of July a year ago in 2010. It is also the sixth month with a consecutive decline. The index went from 89.9 in July. Small-business owners are saying they do not expect the economy will improve six months from now, which is the lowest level since the year 1980.

This bad news is all a business needs to know in order to take the use of factoring very seriously. With October 15th looming for small businesses to pay extensions on their taxes, many are seeking ways to either borrow or raise enough funds to cover the debt.

Invoice factoring is a method by which a company can factor outstanding invoices and get paid now for an invoice that may be due 60 or 90 days from now.

Two Small Business Lending Initiatives

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The Small Business Jobs Act enables community banks to receive funds primarily to boost small business lending — and the loans are up to $10 million to small businesses making no ore than $50 million in annual revenue. This was set up by the U.S. Treasury Department in 2010 to provide community banks with more capital to loan out to small businesses, because of a lack of participation in the Troubled Asset Relief Program (TARP) which granted funds to community banks offering loans to small businesses.

For prudent small businesses, factoring is yet one more initiative to raise cash fast, and it requires no lengthy applications or credit checks. As small businesses are getting paid by way of longer 60 to 90 day cycles, invoice factoring enables them to get their cash sooner, do more business and sustain and grow.

Unemployment Crisis Affects Small Business and Factoring Companies

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The nation is experiencing an unemployment crisis, and the public are divided on what actions the government should take, according to a Pew research and Washington Post sponsored poll. Currently the U.S. 9.1 percent unemployment rate shows that there were no jobs created with verifiable data leaving 14 million Americans without work. Around four out of 10 Americans said the job situation is the economic problem that worries them the most. Meanwhile, only 2 in 10 said the federal budget deficit was the most worrisome economic problem.

why businesses need factoring

Pew Research Center and The Washington Post poll.

The Pew data shows that none of the ideas that president Obama is suggesting are winners among those polled.

– 36 percent of Americans believe that additional infrastructure spending would help the U.S job situation
– 21 percent disagree, and do not think an infrastructure plan would help
– 31 percent say cutting taxes would do a lot to create jobs
– 27 percent think cutting taxes would not help at all.

People citing job worries has increased in recent months, as the job market has remained tight and hiring is still slow.

These concerns have definitely affected small businesses, and many factoring companies have experienced a surge in activity. A small business with receivables can factor them, and get paid by an invoice factoring services firm in as little as 24 hours.

No job Growth in August Will Keep Factoring Companies Busy

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For the first time in a year there has been zero job growth, as the economy showed no growth in August in the United States. The Labor Department reported that unemployment remained steady at 9.1 percent.

Zero job growth is bad news for small businesses, but many have remained strong thanks to financial tactics like accounts receivable factoring. As small businesses require cash flow in order to hire new employees, those in need of staff can use factoring to provide the much needed cash as their business grows and the economy continues to recover, slow as that may be. As opposed to financial institutions who provide loans factoring companies require little time to be approved, and the credit is not based on the small business but on the business’ creditors.