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We’re Sharing the biggest Secret in business funding today and why factoring of accounts receivables isn’t what you thought!

Guest post by: Stan Prokop

Article Overview: Information for Canadian business on why confidential invoice factoring and financing is the best kept business funding secret today in terms of factoring of accounts receivables and cash flow financing . Confidential invoice Financing makes it all better!

We’re Sharing the biggest Secret in business funding today and why factoring of accounts receivables isn’t what you thought!

It's kind of not a secret if everyone knows it right? but we're pretty sure when it comes to business funding that the factoring of accounts receivables on a confidential basis is one of the most powerful alternative Canadian business financing strategies that is a secret that only limited Canadian business owners and financial managers know about .

Let's put this ' secret ' in the context of some real world examples that might closely resemble your firm's situation and needs.

Working capital challenges. You have them, and they seem to pre occupy a lot, and we mean a lot of your business day. So how do those restraints on liquidity affect your firm... they manifest themselves in payroll challeges, meeting lease and loan payments, and that worst feeling of all, not being able to grow your business or take on that new customer because of cash flow challenges.

In many cases, and you are certainly not alone, you're just coming out of the recession and collections from customers is still difficult, and expense restraints seem the order of the day. If you're like many other firms there is some seasonality to your business and you occasionally have bulge needs for cash and working capital.

So... we have done a great job of giving you the problem, which you knew already! Let's turn that around and give you the solution.

Accounts receivable financing and business funding, commonly known is factoring of accounts receivables, is the potential solution. But we can hear you already... you have heard about it and you dont like how this solution works and the perceptions some suppliers and customers might have around how you are financing your business.

Well, it gets better, because we have a solution to that problem and it's called confidential factoring of accounts receivables. Under this type of financing you are in a position of selling your receivables as you generate them, at your option of course, and, here's the kicker, you receive cash for those invoices the same day - while at the same time retaining the right to bill and collect your own accounts. That ability to bill and collect your accounts receivable financing process just turned you into a confidential cash flow machine, allowing you to meet day to day obligations and, as we said, grow your business.

The whole process is seamless and it takes only a week or so to set it up. This type of financing appeals to two typical small and medium sized firms (by the way, Canada's biggest corporations use it also!). It appeals to firms who don't have access to bank credit, or more commonly, might qualify for some level of bank financing, but not enough. That is because, unlike the Canadian banks business funding in Canada via factoring focuses solely on the strength and size of your receivables. In some cases, are you ready for this..? Inventory can be combined into the same facility.

There it is then... a great secret and business financing strategy that will allow you to finance your business. Speak to a trusted, credible, and experienced business Canadian business financing advisor who can assist you in completing this finance strategy.

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Article Tags: business funding, cash flow financing, factoring of accounts receivables, invoice financing



Related Forum Posts
Re: Using factoring companies - [quote="BigJim22":3e4n6n63]I haven't used it myself but can see how it would be valuable for some entrepreneurs. It's hard when you get an order but don't get paid until 30, 60, or 90 days later. But it's also hard to give up $ to the factoring companies![/quote:3e4n6n63] ..."But it's also hard to give up $ to the factoring companies!" Great comment, Jim! However, it's not as hard as it may appear from the outside. Unfortunately, there is no free meal ticket with any financing option (other than gov. grants). The real question regarding the financial viability of factoring is this: I have 2 checks for you; one is for $100 and you can have that one in a month; the other one pays you $80 now plus another $15 in a month. Yes, you net 5 cents less on the dollar with option 2, but if you can take the first $80 now and turn them into $90 or $100 (e.g. more sales!) in a month, then you've not only off-set the loss but actually grown your top and bottom line. Factoring is really much more like running a price promotion. Just look at all the sales events that are happening daily. Companies discount their goods by 10% - 75% only to sell more volume. What are the costs of these programs? Another good example are credit cards! If you as a merchant accept credit card payments from your customer, you're already paying 2% - 5% of each sale to the credit card company. That's the same principle as factoring! Or how many businesses offer a 2% net 10 days discount to their customers, only for them to pay within 10 days? By the way, I can beat those 2% net 10 hands down with our factoring rate! And then there are traditional loans.... you always have to pay back the principal AND interest periodically, no mattter how the business is doing. With our factoring programs there is no principal or interest to be paid back, and the "cost of factoring" is tied to sales and cash flow (i.e., when an invoice actually gets paid and after you have already received the money). The objective truth is that factoring is not the right solution for everybody. Used wrongly or irresponsibly, it can do a lot of damage to a company. But used for the right reason and under the right circumstances, a good factor and factoring program will do miracles for a company's growth (or survival). And in these situations, the $ that go to the factoring company become totally moot. It will truly be the famous win-win. Best, Ralf
Suggestion for an Entrepreneur Looking for Funding - I am new to this forum but have been actively assisting my husband with his cash flow business for a number of months. One issue that I have seen that often occurs from those looking for funding is the lack of paper work that is needed when a funding request is presented. It is so vitally important for an Entrepreneur to have their paper work up to date (business plans, executive summary) before they look for funding. In addition, it is so vitally important to keep in touch with the funding source to expediate their funding project.
Opportunity Addict - No and no. He started collecting them because he thought 'in a few years' I might want to open up that kind of business. We are currently reviewing his long term business plan and realizing that this 'hobby' stuff isnt really in-line with his bigger goals. Now he is going through and getting rid of stuff....because its one of a few sections of his house that he had cornered off to tackle, 'sometime later in this life'. J
Re: Suggestion for an Entrepreneur Looking for Funding - [quote="speechlady"]I am new to this forum but have been actively assisting my husband with his cash flow business for a number of months. One issue that I have seen that often occurs from those looking for funding is the lack of paper work that is needed when a funding request is presented. It is so vitally important for an Entrepreneur to have their paper work up to date (business plans, executive summary) before they look for funding. In addition, it is so vitally important to keep in touch with the funding source to expediate their funding project.[/quote] I agree with speechlady - and would like to add the following: It's important for you and your company to be "capital ready".
Re: Twitter Members, Post Your Twitter ID Here - Hey GT good to see you found the conversation that was taking place about your accounts and took necessary action. At first I thought you got hit with a hacker or something like that. Then I figured out that you had them auto-updating from blip. They are your accounts and you can do as you wish, it doesn't matter to me, I just gave you my input from the perspective of a follower and it looked odd having all those updates that didn't seem to fit in. Talk to you soon my friend, Trent


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