How Accounts Receivable Factoring Helps Small Business

Hello I am Phyllis Rector and I would like to tell you a story regarding a business owner that we have assisted. So, the Interface Financial Group, we pride ourselves on how quickly we can get people funded. Here in Arizona, I am doing business with a staffing organization. He actually provides electricians to electrical contractors. So, he is in the construction area although he does not work under a sub-contract agreement.

So, this guy who had been doing 8 million dollars last year, in 2008, his business fell went downhill just like the rest of the construction industry and he was, you know, kind of limping along. I'd talked to him. He liked our service. He is especially happy about the use-it-as-you-need-it element of our product. No minimums, no maximums, no commitments regarding time.

But, he didn't want to tell his customer that they need to sign on our notification of sale and that his customer need to pay us directly. He thought that it demonstrated that you know, he was telling his customers he was in trouble.

Well, you know the fact is, accounts receivable factoring has been around for 4000 long years. Okay. It's not a new type of financing and in fact the larger your customer is, the more familiar he is likely to be with factoring. Boeing - the airplane manufacturer - for example, had their suppliers factor their invoices; I know this because one of their suppliers approached us for a spot factoring for a really big order.

This guy called me on a Wednesday afternoon, because he does weekly payroll on Fridays. So on Thursday morning, we met up and had the paperwork done. I got his notification signed and I was able to wire him money by 1pm of Friday so that he could make his payroll and since we wire money, it's good as the same day and he was very pleased. Waited about 45 days, got paid, rebated him back the difference between the discount and our fee. So, I do want to remind you that we do have a few minimum requirements.

We have no minimums as far as the size of the invoice that you sell us but we do have minimums on the size of the companies that we will finance. You need to be at a $20,000 a month run rate in revenues. Okay. You need to have at least 2 customers and so if you started growing out of this recession and you're starting to see your business pick up, give me a call .....

How Accounts Receivable Factoring Helps Businesses

Hi Phyllis Rector. Yes, you have at least 1 other video of me so far. But, I'd like to tell you an anecdote about a customer that we have, a client of ours that we helped out through accounts receivable factoring. So, typically, we had actually, up until recently target customers, companies with about 250,000 in sales up to about 5 million.

But, let me tell you, this recession has opened up more opportunities for us and last fall, actually last December, we financed a windows installer, distributor and installer, who in 2008, for the first six months, had done 8 million dollars worth of business. He had contracts and orders but sometimes, especially in the field of construction, these do not mobilize. It did not mobilize. His competitors went bankrupt. As a last resort, he put up for sale his show and building. And then actually, somewhat out-of-the-blue, he had a major general contractor come to him wanting him to do provide the windows and install them for a mixed use commercial and residential project.

Well, what is this guy going to say? He says, of course I'll do that. So, time came when you know, the buildings up and they got to install the windows. They'd been on order and his supplier says, yeah, I will ship you the windows, COD. What is the guy going to do? Great thing that he contacted one of my colleagues, who in turn called me; I met with him and we came up with a mutually beneficial agreement so that the windows get shipped and the supplier was paid COD. Our client, the windows installer, finished the installation, billed his general contractor, took that over. We waited for like fifty days, got paid, rebated it back to him, the difference between the discount and our fee, kept him in business.

So just as a simple note, we do have a few minimum requirements and they are pretty basic. Okay. We need our clients to have 2 customers and we need them to be at a $20,000 a month run rate in revenues. Thus, if your business has fallen off, but you are starting to grow out of it, and you need some financing or you even think you're going to need some financing, give me a call. Nothing beats the early bird, they say; this way, you'll be able to take on that big order as soon as it comes. So call me, email me, whatever way, do contact me. We at the Interface Financial Group would love to try to assist you.

Building a Small Enterprise with Accounts Receivable Factoring

Jay Abraham likes a dismal economy, as he says in his excellent book, "The Sticking Point Solution", because more possibilities for growth open up than in times of plenty.

Many entrepreneurs become paralyzed, retreat and get stuck during a bad economy, so it is sensible that as competitors are fighting to survive, all you want to do is plan to grow. By taking on a growth-minded system, you could be able to capture fifteen to 20 p.c of your competitors' business.

Some small business owners have discovered that during tough times, accounts receivable factoring is a great way to grow, by staying current with bills, providers, and employees. You can also pay for advertising and promoting using this plan.

While you are brooding about techniques to keep ahead of the game during a tight economy, you also might wish to reconsider your product offerings, and include both a less expensive and a premium version of your products and or services. By offering a stripped down version of your product, you can avoid losing sales to those customers who are not ready to pay the asking cost.

However, not all customers are on the lookout for the cheapest price. Many are ready to pay a higher price to get a premium product or service. You can boost your average size sale and your total income by offering a more definite product or service ...or by combining many products in a special premium offer.

Those customers who already trust you must also be re-marketed. Getting enterprises from new buyers isn't as simple as acquiring repeat business from them. Remember to develop a motivation for these existing clients to tell their family and friends about your company, as well as some special deal particularly for them.

These are only some cheap ways you can use to win more sales and find more customers. But remember it all begins with using a good business plan such as factoring. Why wait for invoices to get paid when you may use a factoring company and begin marketing immediately?

Accounts receivable factoring is not a loan but rather a discounted purchase price for existing accounts receivable (or fulfilled invoices) available to B2B companies.

The Government and Small Business Funding Vs Accounts Receivable Factoring

A tip of the hat to the piece "Stimulus Presents Chances for Small Business" by Hanna Heineman, staff reporter for the Santa Monica Mirror, a piece that talked about a workshop built to aid small entrepreneurs in knowing how they can compete for the stimulus funds from the govt held at the LA Airport Renaissance Marriott on Sept. two. Why? Because understanding the best way to use these government opportunities can be hard, especially for tiny businesses.

Accounts receivable factoring is not a loan but rather a discounted purchase price for existing accounts receivable (or fulfilled invoices) available to B2B companies.

The US growing businesses Administration's representative, Lorenzo Flores, was present, stating that there's "no doubt that growing business is the spine of the economy" so it's important to let them take part in stimulus projects and programs.

Small businesses are outlined as having 100 workers or less. Although the federal government has made it less complicated for home businesses to obtain loans because they are now pledging loans at ninety percent so banks only have a 10 percent risk, the process can be challenging.

Why not look at accounts receivable factoring and other successful techniques? This strategy can be achieved with cash in hand long before a small enterprise can get Small Business Association (SBA) loans, although they don't have any fees.