Posts Tagged ‘business’
|Business Survival 101: Cut Expenses
Wednesday, February 10th, 2010
Business Survival 101: Cut Expenses
"Profits are the reward of doing a better job" D. Blakely
If your business is short on cash, losing money, and you are struggling to keep the doors open, here are your options: a reduction in expenses, an ultra-conservative approach to your cash flow and a determination to boost sales, or close the doors. Your immediate goal must be survival. The first step in doing so is to reduce expenses. And it is difficult compared to the excitement of expanding. It is like the medieval practice of bloodletting – painful, but considered at that time to be vital to the patient's survival. No business survives on sales volume. Get profitable and your problems will go away.
If you are determined to save your business, spend a few minutes on- line at any of the major investment websites viewing a few high-tech company financial statements. You will get an eyeful about "staying in business," reading the income statements of countless questionable companies with rapidly growing sales volume – but losing money. And, it seems that the more they grow, the more they lose. For example, I think you will agree that a 100 percent increase in sales with a 150 percent increase in expenses is "poor" management. An astute businessperson would ask: " What benefit is more business if it increases your losses? " A paper route would have been more profitable. Had these firms prevented expenses from outpacing sales the profits would have rolled in.
Getting back to your situation, be realistic. If you look for the miraculous "big cut" you probably will not find it. Instead, think of every dollar you can reduce in expenses as a new dollar in cash flow and the profit on sales of ten times that amount. Look everywhere for savings. Question every type of expense. Do you need all the cellular telephones? Do you need the company season tickets to the local stadium? Do you need the 800 numbers? Are all the ads and giveaways necessary? Nothing should be off limits or thought to be unchangeable. Pension plans, health plans, credit cards, even magazine subscriptions, should be on the list – nothing must be sacred. And don't place limits on your efforts; ask everyone for help. Ask for a reduction in rent. Ask your employees to take a pay cut. Ask anyone you owe or pay money to – it is in his or her best interest that you survive. Do not spend a dollar you do not have to. Do not fall for the argument, it is just a few dollars and will not matter. To use a trite expression: "They all add up." How much do you have to cut back? Enough to get rid of your losses. Most likely, the toughest part of the paring process will be letting employees go. In your haste to expand, you may have hired too many people. Now you must consolidate positions, eliminating all marginal and unnecessary tasks.
Think about it this way, if you aim for a 10 percent net profit, it requires $300,000 in sales to support a $30,000 employee. Every expense you have must be put to the test of, "Do I need it to stay in business?" You start your trip to saving your life's dream by reviewing your past three months of expenses from pay roll to paperclips and squeezing the excess out of all. Look at your losses for the last three months and determine how much you would have had to cut expenses to break even without an increase in sales volume. Hopefully, you can find enough "fat" to do so. Your miserliness must be unrelenting. Success will require sacrifice and discipline, and if you are not prepared to do so – quit now.
I find it interesting that one of the touted business models of the dot.com era, Amazon.com, just announced its first dollar of profit. Unbelievable! The company lost $3 billion from day one and is now hailed by some as a success. I suggest you not follow Amazon as a role model if your business is going to finance your children's education and your vacation home. You need profits, not public relations justifying your losses. Remember, this is a three-step process to survival: cut expenses, hold on to your cash and increase sales.
________________________________
Article © Copyright 2002 Dr. Paul E. Adams. Syndicated by Paradigm News, Inc.
Tags: business, cash, Company, dollar, expenses, increase, need, sales, survival
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Positioning Your Company for Debt Financing
Wednesday, February 10th, 2010
Positioning Your Company for Debt Financing
There was a time in the old days when going to the bank was the only way to get outside capital for your business. These days with the explosion of raising equity investment, many of the guidelines for running a company have been revolutionized. Unfortunately this new phenomenon is only true for companies with super "star power", because these companies have potential to create sky-rocket return earnings.
For everyone else, sticking to fundamentals is where it's at. Building your company incrementally, following a pre-prepared business plan, watching expenses, and increasing sales. When your company moves beyond its launch, it begins to operate much like a bank. On the financial side you will be making credit decisions
involving your customers. Some will have to pay C.O.D., some you will extend net 30 day terms. In this sense you are now becoming a banker for your customers.
Without getting into how inexpensive debt financing ultimately is compared to equity (try 20% annualized interest versus 20% ownership lock stock and barrel), in certain situations the time honored tradition of borrowing money can be the best solution for increasing growth or starting a company.
By knowing what commercial finance companies look for, you will become a much more attractive prospect.
- Concentration – This means putting all your eggs in one basket. Avoid going out and making a large sale to a customer and then not continuing your sales effort to find more customers. The risk of a problem developing with your main customer, or for whatever reason they are no longer buying from you can obviously be detrimental to your success. Finance companies look for incoming revenue to be spread evenly over a number of customers.
- Creditworthiness - Who are you lending your hard earned assets to? What kind of due diligence do you perform on new customers? The challenge here is whether to accept a lucrative sale with a company that could never get credit from any type of finance company. You are essentially telling yourself that you know better than the banker about loaning money. Finance companies will respect a business owner that has a thorough credit checking process and a number of stable credit worthy customers.
- Book keeping – While some businesses send out all their accounting to outside agencies, it is helpful to have a qualified book keeper on staff. When it comes time to seek financing, being able to produce an instant fiscal snapshot of your company will show the sophistication of your operation. Finance companies appreciate businesses that keep a close eye on their books.
- Taxes – Pay them. Using the Internal Revenue Service as your funder becomes expensive. Whenever you work with a finance company, you will be pledging assets as collateral, thus the nature of debt financing. When you fail to make tax payments, the government steps in and places a lien against those same assets essentially stepping into first position. This leaves the finance company with money outstanding to your business and no collateral to back it up. This places your entire relationship in default. When going to closing on financing expect to sign a form that allows the finance company to receive duplicate correspondence from the IRS. This is standard procedure to track tax problems. Owing taxes does not mean you cannot get financing. It is entirely possible to receive a subordinated debt agreement from the IRS which allows the finance company to work with you unencumbered.
- Bankruptcy – If you have ever entered into a bankruptcy proceeding whether personal or business, own up to it right away. It will come out, and being up front about the circumstances will enhance the necessity to overlook the past difficulties.
- Applications – Finance companies ask for a variety of information when performing their due diligence. Do not be alarmed, they are not trying to steal your secrets. They need to feel comfortable with you and your company. Each company has its own threshold for fact checking. Invariably the finance companies that do the most thorough job are the most reliable and safest to do business with. Finance companies like working with a business that takes the time to put a loan package together in advance of asking for financing. Typically you can start with; Interim Balance & Income Statement, Interim Profit & Loss Statement, Last Year End Statements, Accounts Payables Aging Report, Accounts Receivables Aging Report, and of course Tax Returns.
- Contracts – Be prepared for onerous language. Finance companies cannot sugar coat the reality that if something goes wrong they need to exercise their rights. They have to go into the relationship always thinking that the absolute worst case scenario will unfold. Once a finance company finds itself being defrauded, stolen from or payments not made without explanation, it's too late to insert stronger language for protection. By and large the language is standardized and walking from a deal to start shopping for less demanding legalisms won't produce much. Remember this, a contract is just paper in a file cabinet until you default on your agreement. Stay within what you agreed upon and all the tough language won't matter. Even if you start having financial difficulties, get in touch with your finance company immediately. You can greatly reduce the chance of default by showing that you are pro-active with your situation.
- Using the money for the right reasons – This sounds obvious but in certain cases it can be highly relevant. You hear a lot about going to the right Venture Capital Firm that would handle your type of investment. In some ways that holds true for debt finance companies. They tend to work within industries that they feel comfortable. Additionally the type of financing company will depend on your plans for the money. If you are trying to set up a new business infrastructure, then a working capital line of credit is not your best option. You will probably do better with a term style loan that will allow you to amortize the expense over a period of years.
- Management Integrity – Also like equity investment, get a good team together and hold onto them. Finance companies raise red flags when a long time Financial Officer who has been the contact person at the company since the inception of the relationship all of a sudden leaves without explanation. Again, always fearing the worst, the finance company could unjustly feel that something untoward was afoot and begin to scrutinize your account more closely. Even though finance companies are not part owners of your business, they are partners in your success just like your good customers. Keep them abreast of breaking news.
- Be Professional - Answer calls and messages expeditiously, be prepared with information, show up on time. When its crunch time and you need an extra fifty thousand dollars for a week to get a better deal from a vendor, you would be surprised how much mileage you can get by being a courteous and thoughtful customer to your finance company.
-from a speech given at SmartStart 2000 Albany Law School Science & Technology Center
Tags: business, companies, Company, credit, customers, debt, finance, financing, get, money, time
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The Factoring Solution Accounts Receivable Factoring Explained
Wednesday, February 10th, 2010
Accounts Receivable Factoring Explained
What is “Accounts Receivables Factoring”? Factoring involves the purchase of the face value of your accounts receivables or invoices by a factoring company at a small discount in exchange for an immediate cash advance, usually in the form of a wire transfer. Factoring accounts receivables, or “accounts receivables financing” as it is also known, provides billions of dollars in operational cash flow for companies each year. Once only used by a small group of industries, accounts receivable factoring is increasingly used by entrepreneurial businesses who may have trouble securing loans from a bank. As banks pull back, accounts receivable factoring is filling the financial void.
Why is “Accounts Receivables Factoring” important? Essentially, the use of a commercial finance company to factor your invoices is an off balance sheet transaction. This means that when you get beyond the need for financing you have no net term liability to be paid off. Each purchase of an invoice by the factoring company, when paid by the customer, is a completed finance transaction.
How is it done? The practice of factoring has been around for thousands of years. Whenever someone is owed money, there has always been someone else willing to take a cut of future income in exchange for providing “instant relief” to the owed party. The most common example of a modern receivable finance vehicle is the credit card. A merchant gets paid by the host bank before its customer gets around to paying the bill, and the bank takes a percentage of the customer’s payment. The factor works in similar fashion, providing capital either by purchasing the asset value of a receivable (non-recourse) or by making a loan with the invoice as collateral (full-recourse). Some factors are private individuals with huge cash bankrolls, while others are public companies accountable to shareholders. When the factor purchases the value of the receivable, it takes the credit risk that the invoice will be paid, while the client retains the performance warranty on the work done for the customer. The factor usually performs a credit check on the customer before deciding to purchase the receivable. When a factor makes a loan against an invoice – which typically occurs when customer credit is not favorable – its client continues to assume the credit risk, and will be liable for non-payment.
How common is accounts receivable factoring? Since the factor often helps provide financial discipline for its clients, it isn’t uncommon for a bank to recommend a factor to a client seeking a loan without the adequate credit record. Banks see factoring as an interim solution to inadequate credit. A few institutional banks offer accounts receivable financing directly. “Sometimes a company can’t pursue conventional financing,” says Michelle Douglas of Southern Financial Bank. “Factoring allows companies the opportunity to secure short-term working capital to get them in a better position to secure a banking relationship.” An honest – and smart — factor wants its client to eventually graduate to conventional banking relationships. A company which cannot establish an exemplary credit history can eventually become a bad risk for any financial partner. The factor’s ideal partnership is with a new or reorganized company with a bright future – one which probably won’t include depending on a factor for more than limited time.
How does the perception of factoring affect a business that uses factoring? Until recently the use of a factor was thought to indicate that a company had fallen to the bottom of the financial pecking order. The perception of the factor as the last line in a shaky financial defense has persisted largely because of the unregulated status of the factoring industry. “The general misconception is that the only time to use a factor is when your company is going out of business” says Gary Honig, President of Creative Capital Associates. “Exactly opposite is the truth: Factors want to work with companies in a growth mode. They are as unlikely as any financial institution to invest in a failing company.”
What has changed? The factoring industry is growing and has shaken out shady players through a combination of competition and the establishment of sound operating procedures. Factors watch each other closely and now provide assistance to one another much like banks do. Some factors specialize narrowly, dealing with just medical or construction receivables, for example. These factoring companies comprehensively learn their clients’ business and industry. And while they often deal with companies unable to make a deal with conventional banks, the typical factoring company doesn’t take on all comers. Far from it. Since it will operate as a de facto partner or investor by assuming the risk of a company’s receivables, it’s in the interest of the factoring company to take on clients who are growing, solvent, and ambitious. “It’s critical to work with a factoring company who understands you and your business plan,” says Gary Honig. “Most factors aren’t willing to take on just anybody, and you should be wary of any factor who gives the impression that they’re willing to do business with everybody. Normally, you shouldn’t use a factor beyond the growth spurt that initiated the need for one. You should use a factor to get to better terms.”
And terms, of course, vary greatly. The factor generally discounts the full face value of an invoice by a certain percentage. Rates are generally determined by risk and volume. High risk is more expensive; low risk less expensive. Low volume, measured in dollars per month financed, is more expensive; high volume less expensive. If a client can guarantee it will need factoring for a specific amount of either time or money, the rate is lowered. Some factors provide annual APR rates which are tied to the amount of financing outstanding, while others simply discount invoiced amounts between two to six percent.
It’s rare to find two factoring companies which operate entirely alike, partly because of the absence of regulation. Each factor has its own method to sort out credit issues, notify a client’s customers, and verify that invoices are real and collectable. Some factors will also operate as a collection agency.
So what’s the good news? Even skeptics admit that there factoring offers some unique benefits. First and foremost is retention of equity, which remains unchanged on the company balance sheet when a factoring arrangement is established. A conventional bank loan or credit line shows as an on-going liability on company books. Also, entering into a relationship with a factor – and getting capital – takes only a few days. For companies wrestling with a cash flow crunch, the immediacy of funding available through factoring is often the deal-maker. “We’ve been operational for over twelve years, and recently we got into a pinch due to some new and large accounts,” notes Doug Beaver, owner of Gaithersburg-based Amguard Security Services. “Rather than going through a total re-application of our bank line, we used a factor for short-term working money until the new accounts became self-payable. Having never used a factor before, I was surprised how quick and painless the process was.” But no aspect of the factoring business is as highly regarded as its flexibility. Compared with the usually rigid practices of both your neighborhood and downtown bank, a factor can be just the fresh opportunity a business needs to blossom. “Our business grew ten-fold in less than two years,” says Anthony Wright of Virginia-based P&W Surplus Office Movers, “And factoring allowed us to sustain that kind of growth. It gave us flexibility.”
Tags: accounts, business, companies, Company, credit, factor, Factoring, factors, financial, receivable, receivables
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The Factoring Solution
Wednesday, February 10th, 2010
The Factoring Solution
When the vice president of a Reston high-tech firm arrived at his home office after a Las Vegas trade show, he was exuberant. The three-day show had been a smashing success, and he was looking forward to developing a solid roster of new clients from the product orders he'd received. But fulfilling these new orders meant more supplies needed to be purchased, employees would be working overtime, and shipping and handling costs were about to skyrocket.
The vice president actually had a dilemma on his hands despite his Vegas success. Instead of launching into a new level of sales, he would need to spend the next few weeks looking for capitalization while holding off expectant customers. The vice president turned to a little-known capitalization vehicle for help. Unable to borrow from a bank, he went to an entrepreneurial factor for the capital he needed. Using the completed Vegas orders as collateral, he quickly secured the cash needed to fulfill customer expectations. And as it turned out, fulfilling the Vegas orders led to the high-tech company being able to establish itself with a banking institution to avoid ever being short of capitalization again.
How is it done?
But what was the "entrepreneurial factor," and how common – and safe – is it to do business with this kind of finance provider?
The practice of factoring has literally been around for thousands of years. Whenever someone is owed money, there has always been someone else willing to take a cut of future income in exchange for providing "instant relief" to the owed party. The most common example of a modern receivable finance vehicle is the credit card. A merchant gets paid by the host bank before its customer gets around to paying the bill, and the bank takes a percentage of the customer's payment.
The factor works in similar fashion, providing capital either by purchasing the asset value of a receivable (non-recourse) or by making a loan with the invoice as collateral (full-recourse). When the factor purchases the value of the receivable, it takes the credit risk that the invoice will be paid, while the client retains the performance warranty on the work done for the customer. The factor usually performs a credit check on the customer before deciding to purchase the receivable. When a factor makes a loan against an invoice – which typically occurs when customer credit is not favorable – its client continues to assume the credit risk, and will be liable for non-payment.
How common a practice is this?
Since the factor often helps provide financial discipline and for its clients, it isn't uncommon for a bank to recommend a factor to a client seeking a loan without the adequate credit record. Banks see factoring as an interim solution to inadequate credit. And even institutional banks have begun to offer the kind of lending services normally associated with factors — accounts receivable financing.
"Sometimes a company can't pursue conventional financing," says Michelle Douglas of Southern Financial Bank. "Factoring allows companies the opportunity to secure short-term working capital to get them in a better position to secure a banking relationship."
An honest – and smart — factor wants its client to eventually graduate to conventional banking relationships. A company which cannot establish an exemplary credit history can eventually become a bad risk for any financial partner. The factor's ideal partnership would be with a new or reorganized company with a bright future – one which probably won't include depending on a factor for more than limited period.
How does the perception affect a business?
"The general misconception is that the only time to use a factor is when your company is going out of business" says Gary Honig, President of Creative Capital Associates, a Maryland-based factor. "Exactly opposite is the truth: Factors want to work with companies in a growth mode. They are as unlikely as any financial institution to invest in a failing company".
The perception of the factor as the last line in a shaky financial defense has persisted largely because of the unregulated status of the factoring industry. Some factors are private individuals with huge cash bankrolls, while others are public companies accountable to shareholders. Until recently the use of a factor was thought to indicate that a company had fallen to the bottom of the financial pecking order.
What has changed?
But the factoring industry itself is in a growth mode, and the marketplace is shaking out the shady players through a combination of competition and sound operating procedures. The factors watch each other closely – they interact constantly, providing assistance to one another as banks do – and they aren't shy about comprehensively learning their clients' business and industry. Some factors often specialize narrowly, dealing with just medical or construction receivables, for example. And while they often deal with companies unable to make a deal with conventional bankers, the typical factoring company doesn't take on all comers. Far from it. Since it will operate as a de facto partner or investor by assuming the risk of a company's receivables, it's in the interest of the factor to take on clients who are growing, solvent, and ambitious.
"It's critical to work with a factor who understands you and your business plan," says Honig. "Most factors aren't willing to take on just anybody, and you should be wary of any factor who gives the impression that they're willing to business with everybody. Normally, you shouldn't use a factor beyond the growth spurt that initiated the need for one. You use a factor to get to better terms."
And terms, of course, vary greatly.
The factor generally discounts the full face value of an invoice by a certain percentage. Rates are generally determined by risk and volume. High risk is more expensive, low risk less expensive. Low volume, measured in dollars per month financed, is more expensive, high volume less expensive. If a client can guarantee it will need factoring for a specific amount of either time or money, the rate can also be lowered. Some factors provide annual APR rates which are tied to the amount of financing outstanding, while others simply discount invoiced amounts between two to six percent.
Partly because of its unregulated nature, it is rare to find two factoring companies which operate entirely alike. Each factor has its own method to sort out credit issues, notify a client's customers, and verify that invoices are real and collectable. Some factors will also operate as a collection agency.
So what's the good news
Even hardcore skeptics of factoring admit there are some unique benefits to the practice. First and foremost is equity, which remains unchanged on the company balance sheet even when deals with a factor are struck. A conventional bank loan or credit line shows as an on-going liability on company books. Also, entering into a relationship with a factor – and getting capital — takes only a few days. For companies wrestling cash flow crunch, the immediacy of potential capital is often the deal-maker.
"We've been operational for over twelve years, and recently we got into a pinch due to some new and large accounts," notes Doug Beaver, owner of Gaithersburg-based Amguard Security Services. "Rather than going through a total re-application of our bank line, we used a factor for short-term working money until the new accounts became self-payable. Having never used a factor before, I was surprised how quick and painless the process was."
But no aspect of the factoring business is as highly regarded as its flexibility. Compared with the usually rigid practices of both your neighborhood and downtown bank, a factor can be just the fresh opportunity a business needs to blossom.
"Our business grew ten-fold in less than two years," says Anthony Wright of Virginia-based P&W Surplus Office Movers, "And factoring allowed us to sustain that kind of growth. It gave us flexibility."
By Sean Harris
Mr. Harris has been widely published in newspapers worldwide (Washington Post, Baltimore Sun, Seattle Times, Montreal Gazette, Toronto Globe & Mail, London Times, Houston Post, etc.), and has written about information technology and DVD for a variety of national trade magazines (Information World, the SIGCAT Discourse. Etc.). He is the Creative Director for the PR and marketing company Pink Piglets Ltd., based in Washington D.C.
Tags: bank, business, capital, Company, credit, factor, Factoring, factors, financial, risk
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Financing Using Equity vs Debt
Wednesday, February 10th, 2010
Financing Using Equity vs. Debt
At various times in the life of a company there will be requirements for outside assistance in order to grow the business. One requirement will be the need for additional capital. Choosing which financing vehicle is best for your company is very important. It’s choosing the right tool to fix the problem.
Deciding whether to seek equity capital or debt financing is the first step. Usually companies trying to get equity capital are very early stage with little or no real assets. While companies on their way to a steady growth curve use debt financing.
The equity route
As the owner of a business idea, plan, or company – you hold ownership to a subjective value called equity. The equity of any type of property whether intellectual or physical is the value someone is willing to pay for it minus any liability attached to it. In business that could mean the value of an entity today measured in time and money invested versus the value in the future measured by comparable growth.
Once the owner and investor determine the “valuation” of the equity, the owner can then sell parts of the equity in order to raise capital. There are a variety of methods you can raise equity capital (Seed, Angel, Venture) and you should learn the pluses and minuses for each. An equity capitalist is interested in picking a company that shows great potential. They are expecting that there will be significant growth due to their involvement. That could mean that the company will grow tenfold within five years.
Without a doubt, first and foremost on any equity capitalist’s due diligence list will be the management team. Even before the idea itself, it is commonly stated, great idea’s with a bad team will get nowhere, whereas, bad idea’s with a good team still have a chance to make it big. You should also realize, that once invested, the equity capitalist will be having an active role in the decision making of the company. Because they have “bought in” to your company they are now your partners, how active they become needs to be sorted out up front.
On the debt side
Conversely, raising capital through debt financing does not entail “selling” your equity, but instead works by “borrowing” against it. Debt financing is only available to business owners who have something of value that the lender can instantly liquidate. The debt finance company is not interested in becoming a partner in your endeavor, instead they are in business to make money from their money, letting you use it for periods of time.
Like equity financing there are a variety of methods available to raise debt financing. Traditional banking will always be the least costly source for your financing, but remember bankers are not in business to take on risk. When they ask for three years of company tax returns its because they want to see a steady reliable set of profitable growth numbers. Borrowing from the bank relies on two variables, the collateral that secures the loan, and your ability to repay the loan. You might have enough collateral, but if your business is losing money, the bank can’t expect you to handle the added expense of loan payments.
Many early stage companies turn to private commercial financing which is better suited to deal with riskier issues. Factoring companies use the loans you make to customers (invoices for finished work) as the collateral for their funding. Here the emphasis will be the creditworthiness of your customers rather than the credit of your company. Equipment leasing companies will allow you to purchase new equipment and pay for it over time, usually three to five years.
Finally,
When seeking outside capital, whether equity or debt, remember that certain sources are familiar and like to work with particular industries. Take the time to look around and be sure that the source you are considering is well-aquatinted with your type of business.
- article appeared in the Business to Business Newspaper of Howard County & Columbia MD.
Tags: business, capital, companies, Company, debt, equity, Factoring, financing, growth, money, value
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Reducing the Cash Gap by Factoring
Wednesday, February 10th, 2010
Reducing the Cash Gap by Factoring
By: Daniel J. Borgia, Ph.D. Deanna O. Burgess, Ph.D.
Abstract
Growing firms often find themselves strapped for money. A gap in cash is created when bills are paid weeks before cash comes in from customers. The cash gap can be shortened by concentrating efforts on fast moving inventory, implementing a just-in-time inventory model, negotiating extended credit terms to suppliers, and getting cash out of customers through discount programs and credit card transactions. Only after exhausting these alternatives does factoring typically make sense.
Factoring provides quick access to cash through sales of receivables. The cash gap is shortened to the extent factoring brings in money earlier than receivables normally would. In general, firms that sell receivables immediately receive a percentage of the outstanding accounts sold. Once the receivables are paid, the factor forwards the balance of these collected accounts to the firm less a factoring fee. This article describes typical factoring arrangements and the costs/benefits of this form of financing. Fees can be high but may outweigh the costs of lost sales, ventures, opportunities, or at the extreme, going out of business.
A survey of small to medium sized businesses that use factoring provides a consumer profile of typical factoring arrangements. A majority of those surveyed are young, rapidly expanding organizations using factoring to support short-term entrepreneurial expansion efforts. Firms report that factoring typically provides access to seventy to ninety percent of cash tied up in receivables, with the balance provided within sixty to ninety days less a ten to twelve percent fee. In all, those that use factoring report high satisfaction, and often use the same factor on a repeat basis.
Spending Money to Make Money
It’s not uncommon to hear about emerging companies that grow themselves right out of business. Cash demands often stall expansion efforts when bills are paid weeks before cash comes in from customers. Spending money to make money can be costly. The cash gap between payments deserves careful consideration. Rapidly expanding companies with excellent products and booming sales are hamstrung if receivables tie up cash needed to fund operations and growth. Understanding the factors that affect the time between payments affords a closer look at managing the cash gap and alternative financing options.
The Cash Gap
Managing the cash gap1 is illustrated in Exhibit 1. When a company pays its suppliers before it collects from its customers, the cash drain presents a financing need. The gap between payments is managed by getting cash out of inventory quickly all-the-while avoiding payment to suppliers as long as possible. Concentrating purchasing efforts on fast moving inventory, giving discounts to customers who pay early, and negotiating extended credit terms with suppliers all help to reduce the cash gap.
Robbing Peter to Pay Paul
Small cash gaps are best. When inventory is purchased, sold, and collected in the same amount of time it takes to pay for the goods the cash gap closes to zero. Even better, a negative cash gap is a modern day version of robbing Peter to pay Paul. Customer Peter advances payment before the inventory is paid to Paul supplier. For example, customers of E-commerce companies like amazon.com forward credit card payments for books brought in on a just-in-time basis and paid for under thirty-day credit terms following the sale. Under this scenario, amazon.com maintains a negative thirty-day cash gap. Likewise, in the specialty cement business, customers pay for goods six to eight weeks before they are manufactured and shipped. In this case, the negative cash gap of forty to sixty days provides an internal source of financing.
To illustrate how the cash gap works refer to Exhibit Two. If a company spends an average of $10,000 per day on its operations, and it takes 100 days to convert its investment in the production process into cash (a 100day cash gap), then this firm will require roughly $1,000,000 in funding (on average) to support its operations ($10,000/day x 100 days). However, if this company can find a way to reduce its cash gap to say 50 days, then only $500,000 in funding is required. Finally, if we assume the cost of financing is 10% annually, this company could reduce its annual financing costs from $100,000 to $50,000 per year.
Small Business Constraints
Unlike large, publicly traded firms, small businesses face a variety of operating and financial constraints that limit the extent to which they can close the cash gap. Many small firms face technological and managerial constraints that limit the ability to closely monitor (and hence reduce) inventory levels. Furthermore, small firms are more likely to lack the power that large corporations have in negotiating terms from suppliers. Finally, small businesses do not possess the same resources to devote toward the collection of accounts receivable. These small firms typically have limited access to short term financing alternatives to help short-term working capital needs. Obtaining working capital from banks can be difficult, time-consuming, and paper-intensive. Willing lenders are often hard to find.
Reducing the Cash Gap in Small Businesses
What options remain for small businesses interested in reducing the cash gap? One alternative is to turn the inventory/sales cycle upside down. Replicate the e-commerce model. Provide incentives for customers to pay cash upfront. Implement a just-in-time inventory system that affords the option of paying for inventory after the cash sale. In this way, the cash gap becomes negative.
A close second option that shortens the cash gap is to provide incentives for customers to charge their purchases using VISA or MasterCard. Credit card companies buy receivables for a one to five percent fee. If the customer factors (sells) the receivable by charging the purchase, little cost is involved, cash is obtained within days, and the cash gap shortens considerably. Cash discounts given to customers who pay early achieve a similar result.
Only when trade and industry expectations hamper efforts to accelerate customer payments should consideration be given to factoring existing receivables. Factoring receivables involves selling customer invoices to a third party at a discounted amount. Instant money is obtained without collateral or extensive corporate credit. The factor becomes the bill collector, assuming the majority of the risk of collecting payment.
The fee charged by the factor may be as high as five percent in the first month due to the lack of collateral or extensive credit review. Alternatively, if the receivables are sold with recourse, accomplished by a “validity guarantee,” the factor may charge a smaller fee in exchange for the right to hold the corporation liable for uncollected receivables. Limited time is spent underwriting the credit of the business and its customers, examining the track record of the business’ collection ability and the payment history of its customers. Audited financial statements are not obtained and the risk of fraudulent misrepresentation can amount to one-half to one percent of those factored. Understandably, many receivables are factored with recourse to mitigate the factor’s risk and the resulting fees imposed.
Factoring Industry
The basic need for factoring originated from the practice of merchants extending beneficial “trade credit” to purchasers of their product or service — a concept that has been around for over 3,000 years. More specifically, the extension of credit occurs when a business sells merchandise to a purchaser, usually another business, but allows the purchaser time — usually 30, 60, or 90 days — in which to pay the bill. Unless the seller has sufficient funds in reserve during the “credit period,” continued production efforts are hampered.
Although factors have existed for thousands of years, the impact of high interest rates on businesses in the 1970’s generated renewed interest in factoring. Even after interest rates fell significantly, factoring continued to fill an ever-widening gap in the financial structure of our economy, especially with restricted bank financing. Because of the savings and loan debacle, lending institution loan portfolios are subject to greater scrutiny and stricter standards. As a result, the factoring industry has experienced rapid growth -increasing from $46 billion in factored receivables in 1993 to over $100 billion in 1995.
The factoring industry can be divided into two broad groups that serve two distinctively different market segments. The first group consists of the factoring divisions of banks and other financial institutions such as Morgan Guarantee Trust Company, American Express, Citicorp, and Citibank, which provide receivables financing to their large corporate customers. These financial institutions will usually limit their purchases to $1,000,000 or more per invoice and charge relatively low fees — usually around 1 to 3 discount points. Numerous large Fortune 500 companies such as Western Digital, Honeywell, Georgia Pacific, and Scott Paper factor receivables through the factoring divisions of large financial institutions.
The second group of factors consists of small, privately owned financial services companies. These smaller factors generally fund new, rapidly growing companies that have exhausted their lines of credit and borrowing capacity at banks, and have few other working capital financing alternatives available to them. For these growth companies, factoring is an attractive means of raising capital. Small factors will purchase invoices as little as $1,000 or as much as $500,000.
Realistically, only those companies experiencing cash drains from growing sales typically utilize this type of financing strategy. However, struggling companies with cash flow problems also use factors in an attempt to increase cash flow. If a struggling company needs cash to begin turning its business around then this financing strategy may be effective. However, companies that are financially weak may have to sell their receivables at a greater discount than strong companies. Therefore, struggling companies often experience difficulty factoring in the long run. Also, factors will purchase only those receivables that they consider collectable. This means that companies with poorly managed receivables may find that factoring is not an option.
Factoring
In a typical factoring arrangement, a business sells its accounts receivable to a factor at a discount, receives between 60% and 90% of the face amount of the invoice up front, and pays the factor between one percent and five percent of the face value of the invoice per 30 days. The balance of the receivable is remitted when the factor recovers its cash outlay. For example if ABC company sells a $10,000 receivable to a factor, ABC Company might receive $7,000 cash immediately (70%). At the end of thirty days, assuming ABC’s customer remits the balance to the factor, ABC will receive the remaining $2,500 less a 5% ($500) discount, which represents profit to the factor.
Factoring is a financing tool. The money can be used to purchase inventory needed for growing sales or perhaps to take advantage of supplier discounts by reducing payables early. Factoring also allows a company to increase its capital without taking on additional debt or selling more stock. Other benefits include improved credit ratings resulting from prompt debt repayment, internal cost savings by reducing the time and money committed to managing receivables which provides managers with more time to focus on growing the business. Companies that factor are often growing rapidly and have exhausted lines of credit and borrowing capacity at banks.
However, factoring has its drawbacks. Fees increase as the risk of noncollection escalates. Depending on the quality of the receivables, fees may reach five percent in the first month and higher in the weeks that follow. State usury laws regulating interest rate caps on borrowings, such as 18% in Florida or 24% in New York, do not apply. Factoring is considered a sale, not a loan. Factoring fees typically amount to ten to twelve percent on receivables paid within sixty to ninety days.
Despite the high fees, factoring benefits may outweigh the costs. For instance, losing out on 12% of the receivables to gain 88% immediately may be wise if cash is needed to accept a new contract promising repeat business or expansion into a new market that otherwise would have been forgone. For companies with strong receivables, losing out on 3% of receivables that typically take sixty days to collect may make sense if those receivables cost the company more than 3% in fees (interest, billing and collection) during the collection period.
Exhibit Three illustrates the benefits of factoring. For a company with $1,800,000 in sales and $1,620,000 in operating costs, receivables that are collected every two months carry an average balance of $300,000. A moderate factoring fee may be assumed if the receivables are assumed to be high quality (i.e. government contracts) and take little time to be paid in full. Using factoring rates advertised by 21st Capital (www.21stcapital.com), the factoring fee is $27,000 or nine percent of the $300,000 receivables. Annualized, this fee amounts to $162,000, or nine percent of the $1,800,000 sales.
Factoring fees may be offset by the interest saved by shortening the cash gap. The portion of the cash gap related to receivable collection, sixty days, is shortened to the extent that cash is received early. The annual interest saved is $21,600. The interest savings taken together with the savings in accounts receivable collection and billing functions estimated at $30,000 provides a net annual cash outflow from factoring of $110,400 or 6.13% of sales. In this example, the benefits of factoring may outweigh the costs to the extent factoring brings in cash needed to fund additional projects or growth in excess of 6.13% of sales.
If the company is in desperate need of cash and factoring is ignored, a business may be forced to employ its last alternative — selling part of the business to outsiders. For many small business owners, selling part of a business may be difficult and an unacceptable alternative.
The Cost and Characteristics of Non-Bank Factoring Arrangements
A survey of smaller businesses utilizing accounts receivable factoring as a source of financing was conducted to assess the nature, costs, and characteristics of non-bank factoring arrangements. The survey was mailed in October 1999 to small businesses that used the services of factors within the past three years. The list and mailing addresses of businesses using factoring services was obtained from the client-lists of three Florida-based non-bank factors. The survey was designed to assist in creating a profile of businesses that utilize factoring. In addition, the survey explored the level of satisfaction businesses have with their factoring companies as well as the costs relative to other sources of short-term working capital financing. A total of 633 surveys were mailed and 59 were returned resulting in a response rate of 7.9%.
Sample Firm Characteristics
Most of the respondents to this factoring survey (58%) have been in business for five years or less (see Exhibit Four). This appears to be consistent with the notion that startup firms with short track records and operating histories have difficulty getting bank financing and turn to factoring. When asked directly whether they had problems obtaining traditional bank financing, Exhibit Five shows that 64% of respondents reported they had approached three or more banks for lines of credit and 54% reported being rejected for bank financing three or more times. Only 9% of those surveyed reported they had not been turned down for a loan or line of credit at least once. In general, the responses suggest many small, young businesses that factor receivables are considered risky candidates for traditional financing sources.
Sample firms reported average sales levels of approximately $800,000 in 1996, $1,000,000 in 1997 and an $1,800,000 projection for 1998. A majority of these firms (64%) operate in a main facility that is less than 5,000 square feet, while thirty percent are housed in facilities 5,000-10,000 square feet and only six percent occupy spaces in excess of 10,000 sq. ft. Small businesses that factor have small facilities and are experiencing sales growth.
Consistent with an increasing sales trend, respondents report high expectations of growth (Exhibit Six). Nearly sixty percent of the respondents plan to add new products or services, forty eight percent expect to enter new markets, and thirty nine percent anticipate adding operating space to their facility. These businesses that factor fit a startup entrepreneurial profile.
The Factoring Relationship
Given the drains on cash from sales growth, the respondents were asked how frequently they factor. The responses indicate factoring is used almost equally as a short term or long term financing alternative. One third of the firms reported using factoring less than six months, thirty-eight percent factored for six months to a year, and twenty-nine percent factored for more than a year. Most firms (83%) use one factor. Respondents in need of a factoring arrangement often do so repeatedly with the same financing source. As anticipated, Exhibit Seven illustrates that factoring serves a strong need for growing companies. A large number of firms report factoring kept them from bankruptcy (31%) or from turning down sales (39%).
The benefits of factoring are evidenced in the survey results that indicate 60% of firms received an up front cash advance ranging from 70% to 90% of the value of the receivables factored (see Exhibit Eight). Less than five percent received over 90%. Surprisingly, nearly twenty percent of firms received less than 50% against the value of receivables.
Factoring fees experienced by the respondents are provided in Exhibit Nine. While the largest percentage of surveyed firms paid two to two-and-one-half discount points per 30 days, this is still an expensive source of capital. While there might be a tendency to view this fee on an annualized basis (2.5% for 30 days amounts to nearly 35% on a compound annualized basis), recall that typical fees are paid over two to three months on decreasing receivable balances. A compounded fee for the year at 35% would be incurred only in the unlikely scenario that the same receivable remains uncollected for twelve months with imposition of the 2.5% rate compounded monthly throughout that time.
Despite the cost, a majority of firms appear to be quite satisfied with their factoring relationship. Seventy percent of the firms reported they were satisfied with their factoring relationship, while only 14% found this relationship to be unsatisfactory.
Summary and Conclusions
Growing firms often find themselves strapped for cash. When bills are paid weeks before cash comes in from customers, the cash gap between payments represents a financing need. The cash gap can be shortened by concentrating efforts on fast moving inventory, implementing a just-in-time inventory model, negotiating extended credit terms to suppliers, and getting cash out of customers through discount programs and credit card transactions. Only after exhausting these alternatives does factoring typically make sense. Factoring provides quick access to cash through sales of receivables. The cash gap is shortened to the extent factoring brings in cash earlier than receivables normally would. This article describes typical factoring arrangements and the costs/benefits of this form of financing. Fees can be high but may outweigh the costs of lost sales, ventures, opportunities, or at the extreme, going out of business.
A survey of businesses that use factoring reports many are young, rapidly expanding companies using factoring as a short-term financing alternative. Factoring typically affords companies access to seventy to ninety percent of cash tied up in their receivables, with the balance provided within sixty to ninety days less a ten to twelve percent fee. In all, those that use factoring report high satisfaction, and often use the same factor on a repeat basis.
Daniel J. Borgia, Ph.D. Assistant Professor of Finance College of Business Florida Gulf Coast University 10501 FGCU Blvd. South Fort Myers, Florida 33965-6565 (941) 590-7371 dborgia@fgcu.edu
Deanna O. Burgess, Ph.D. Assistant Professor of Accounting College of Business Florida Gulf Coast University 10501 FGCU Blvd. South Fort Myers, Florida 33965-6565
Tags: business, cash, companies, credit, factor, Factoring, financing, firms, gap, percent, receivables
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Glossary of Accounts Receivable Factoring Terms
Wednesday, February 10th, 2010
Glossary of Accounts Receivable Factoring Terms
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account: also known as the account debtor
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accounts payable: The amount of money a company owes for goods and services it has received; any accounts due and owing.
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account receivable: a balance due from a debtor on a current account.
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| accounts receivable: A collection of a company's outstanding invoices (invoices which have not yet been paid by the company's customers). |
| accounts receivable financing: the purchase of the face value of a companies accounts receivables or invoices by a factoring company at a discount in exchange for an immediate cash advance usually in the form of a wire transfer. Same as "financing accounts receivables". |
| accounts receivable aging report: a financial report showing how long invoices from each customer have been outstanding. |
| advance rate: the percentage of the face value amount of an invoice that a funding source will advance to a client. |
| articles of incorporation: a document filed with a U.S. state by the founders of a corporation. After approving the articles, the state issues a Certificate of Incorporation; the two documents together become the Charter of Incorporation. |
| asset: anything having commercial or exchange value that is owned by a business, institution or individual. A business' assets might include its real estate, equipment inventory, intellectual assets such as copyrights or trademarks, and accounts receivable. |
| assignability: the ability to assign (or sell) an income stream to another individual or business. |
| assignee: the person or business entity who is given, obtains, or buys the right to an asset. |
| assignment: the transfer of the rights, title or interest of any debt instrument that is properly owned by another party. |
| assignor: the person giving or selling an asset, and subsequently, forfeiting rights to that asset. |
| bad debt: any debt that is delinquent and has been written off as uncollectible. |
| balance and income statement: an accounting statement of financial condition that reports the company's assets, liabilities, and equity at a given point in time. |
| balance sheet: a financial statement that shows a business's current financial condition, with assets on the left side and liabilities and net worth on the right side. |
| bankruptcy: a state of insolvency of an individual or organization. The inability to pay debts. |
| beneficiary: The person or party entitled to receive the benefits, or proceeds, of the life insurance policy upon the death of the insured person. |
| bill of lading: A shipping document which gives instructions to the company transporting the goods. |
| bill of sale: A document used to transfer the title of certain goods from seller to buyer. |
| creditworthiness: the process of determining the credit limit assigned to each account debtor for the purposes of advancing funds against invoice(s) which they owe. |
| invoice: an itemized statement furnished to a purchaser by a seller and usually specifying the price of goods or services and the terms of sale. |
| cash flow: the flow of cash through a business. In business terms, cash flow involves the flow of cash into a company in the form of revenues, and out of the company in the form of expenses. |
| cash flow instrument: future payment or series of payments. Also called a debt instrument or income stream. |
| cash flow transaction: occurs whenever a funding source pays cash to an individual or business in exchange for an income stream. |
| chattel: any article of tangible property other than land, buildings, equipment, inventory, or other items annexed to such. |
| client: the business having the financing relationship with the lender. |
| collateral: something of value that is pledged as security to ensure the payment of a debt. Collateral is promised to a lender until a loan is repaid. If the borrower defaults, the lender has the right, by law, to seize the collateral. |
| collateral-based income streams: cash flow instruments that are secured by collateral. |
| collectible: refers to the funding source's ability to collect future income stream payments once they are purchased. |
| corporation: a legal entity, chartered by a U.S. state or the federal government, and separate and distinct from the persons who own it. It is regarded by the courts as an artificial person; it may own property, incur debts, sue or be sued. |
| credit insurance: third party insurance companies that underwrite the value of the outstanding invoice. Under the specific terms of the policy, unpaid invoices will be covered and proceeds will be given to the policy holder. |
| creditor: one who is owed payments on a debt by a debtor. |
| customer: the account debtor (end user) who does business with the client (vendor) |
| debt instrument: future payment or series of payments, or a debt that one party owes to another party. Also known as income streams or cash flow instruments. |
| debtor: one who owes something and makes payments to a creditor. |
| default: the omission or failure to perform or fulfill a legal duty, obligation, or promise (i.e. to pay a debt). |
| discount fee: the percentage of the face value of the invoice taken in exchange for making an advance on an invoice. |
| doing business as (dba): a legal statement filed when a person uses a name other than his or her own to operate a business. |
| due diligence: exhaustive research on a transaction, income stream, client, and/or payor; may involve credit checks, appraisals, UCC searches, lien searches, or on-site visits with clients. |
| equity: the value or interest an owner has in property over and above any indebtedness owed on the property. |
| escrow: the system by which money documents, personal property, or real property is held in trust for another party by a disinterested third party until the terms and conditions of the escrow instructions are completed or terminated. |
| face value: the total current principal balance on an invoice |
| factor: a funding source that specializes in funding accounts receivable. |
| factoring: the purchasing of accounts receivable from a business by a factor who assumes the risk of loss in return for some agreed discount. |
| factoring rate: same as discount fee; percentage of invoice amount a factor charges for funding an invoice. |
| financing: the act or process or an instance of raising or providing funds; also: the funds thus raised or provided. |
| financing accounts receivables: the purchase of the face value of a company's accounts receivables or invoices by a factoring company at a discount in exchange for an immediate cash advance usually in the form of a wire transfer. Same as "accounts receivable financing". |
| financing statement: the UCC document filed with local state authorities to designate the owner of rights to stated collateral. |
| foreclosure: a legal proceeding in court to seize property given as security for a debt that is in default. |
| government-based income: cash flows paid by a government entity, either directly or through a sub-contractor. |
| income stream: a future payment or series of payments, or a debt that one party owes to another party. Also known as a debt instrument or cash flow instrument. |
| institutional lenders: savings and loan associations, local and regional banks, mortgage companies, finance companies, and commercial lenders. |
| intangible personal property: something that has value but is not a tangible asset, for example, a trademark, copyright, patent, or trade secret. |
| investment-to-value ratio: a measure of how secure a creditor's position is and how likely the creditor is to recoup all of his or her money in the event of a foreclosure. |
| joint venture: a business entity established for a specific task, operation, or goal. |
| leverage: the ratio of debt to total assets. |
| limited liability company: a form of business structure designed to combine the best of corporate and partnership attributes into one entity. |
| loan-to-value ratio: a measure of how heavily mortgaged a property is and how likely the owner is to default on his or her debts. |
| notification: the process by which the factor notifies the account debtor that all proceeds due and owning must be paid directly to the factor by law. |
| partnership: a common form of joint ownership of a business. |
| payee: person or business that has the right to receive a payment or series of payments and is interested in selling that income stream for cash. Also called the seller or client. |
| payor: the person, company, or government responsible for making payments on an income stream. |
| partial: any part of a payment stream that is less than the full amount due. |
| personal guaranty: a contractual agreement between a funding source and a seller, whereby the seller assumes personal responsibility and liability for the obligations of the income stream. |
| portfolio: a group or package of income streams of the same type. |
| privately held: stock owned in the company by the business owners rather than shares sold in the public markets. |
| profit and loss statement: a financial statement that shows a historical record of a business's income and expenses. |
| promissory note: a written promise to pay a specified amount to a specified party over a certain period of time. |
| purchase and sale agreement: the actual contract between factor and client that legally sets out the terms and conditions for the financing relationship |
| replevin: a legal proceeding in court to seize property (other than real estate) given as security for a debt that is in default. |
| reserve: an amount a funding source holds in its account to cover potential payment defaults. It is tied to the advance and the discount fee. After the advance, the reserve is held until the debt is covered. The fee is deducted and the remainder of the reserve is refunded. |
| satisfaction: the discharge of an obligation by paying a party what is due, i.e., the satisfaction of an IRS lien or the satisfaction of a mortgage. |
| seasoning: the length of time payments have been made on a note or other debt instrument. |
| securitization: the bundling and resale of debt instruments to investors; permitted only for parties licensed and regulated by the SEC. |
| security interest: an interest in property, other than real estate, which is given as security for a debt or other obligation. A security interest is created by execution of a security agreement and one or more financing statements under the Uniform Commercial Code. |
| seller: the person or company that is holding a debt instrument and wants to sell it. |
| sign off: a legal acknowledgment from the account debtor on a bill as due and owing. |
| sole proprietorship: a business owned and operated by an individual. |
| subordination: the act of a creditor acknowledging in writing that a debt due him or her by a debtor shall be inferior to the debt due another creditor by the same debtor. |
| tangible property: property other than real estate, such as cars, boats, or other assets. |
| trial balance: a debit and credit worksheet in accounting showing the financial condition of the business at the period stated. |
| Uniform Commercial Code (UCC): rules of law that delineate the structure of obtaining security on collateral. The UCC determines who has rights to collateral that has been pledged in return for credit. |
| verification: the process of verifying the veracity (or truthfulness) of the invoice value from the customer. |
Tags: accounts, business, cash, Company, debt, income, party, property, receivable, stream, value
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Factoring e-Learning Center
Monday, February 8th, 2010
Welcome to the CCA Factoring & Financing e-Learning Center
A valuable collection of articles designed to help you better understand accounts receivable factoring and cash flow management. Click each headline to read the article
Invoice Factoring Explained
This will help explain accounts receivable factoring, if you are unfamiliar with the service.
Glossary of Accounts Receivable Factoring Terms
A list of many commercial finance terms explained
Reducing the Cash Gap by Factoring
Growing firms often find themselves strapped for money. A gap in cash is created when bills are paid weeks before cash comes in from customers. The cash gap can be shortened by concentrating efforts on fast moving inventory, implementing a just-in-time inventory model, negotiating extended credit terms to suppliers, and getting cash out of customers through discount programs and credit card transactions.
Debt vs. Equity
What is the difference between these two types of financing and which would be better suited for your particular business needs?
The Factoring Solution
Guest article on the basic’s of the factoring industry. An overview of the who, what, why, & where’s.
Positioning Your Company
What qualifies you for collateral based loans? How can you strategically set your company up for competitive business financing?
Banks and Factoring
In the past ten years, numerous banks have gotten in and out of the factoring industry in one form or another. This articles looks at both sides of the bank factoring issue.
BusinessSurvival 101: Cut Expenses
Cutting expenses to increase profits.
Eight Ways To Improve Your Company’s Cash-Flow – TODAY!
Cash is the lifeblood of any business. As humans need air to breath and food to eat, your business requires customers that provides the primary substance that keeps a business in business: cash.
How to Finance Your Start-Up
The process of obtaining money to fund a new idea or start-up company, can be frustrating and sometimes fatal for the new enterprise.
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Money, Money Everywhere – and not a Business Plan in Sight
A strong business plan is the single most important item in your financial planning portfolio.
Business Survival: The Proper Price Is Truly A Magic Number
So, how do we charge for that new product or service?
7 Cash Flow Secrets Your Accountant Never Told You
Looking for ways to boost your cash flow?
Small Business Financing: VC’s and Banks
Looking for money to start or support your small business?
Transaction Financing – Instant Cash Flow From Invoices
This financing provides your firm with the money in order for you to perform an invoice or contract requirement
What do lenders & investors look for?
What is it that a lender or investor is looking for in your business plan?
The UCC-1
What is it? Why is it so important? Learn about the In’s and Out’s of the Financing Statement.
Tags: accounts, business, cash, Company, Factoring, financing, flow, gap, href, looking, money, new
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