Bernard Linney & The Benefits of Factoring

Jul31
2011 Written by admin

Bernard Linney on the Benefits of Invoice Factoring

In any recession, there are bound to be companies that extend their terms by maxing out their credit lines with one vendor, before moving to the next. This not only extends their terms, but provides these companies with what amounts to an expensive form of business credit. Companies must be able to protect themselves and ensure that they are never a victim of this practice. This involves being cognizant of the customer’s order patterns, keeping abreast of their credit rating and taking additional steps to protect the company’s interests. One of these steps includes pursuing invoice factoring. What is invoice factoring and how can it help protect against customers who take too long to pay, and may simply be trying to extend their credit?

Invoice factoring is the practice of selling a company’s receivables, or better put, the customer’s invoices, to a financing company. This sale allows the company to generate the working capital needed to finance their daily expenses, pay their own obligations and put plans in motion to finance the company’s future growth. Factoring works by allowing the finance company to collect directly on the invoice from the company’s customer. In return, the company is advanced its much needed cash. When the customer pays, the company is reimbursed the difference and is charged a fee by the financing company.

Factoring addresses that aforementioned issue of customers who may simply be extending their credit & terms. If companies are concerned that a customer is pursuing this practice, they can then use the non-recourse factoring option. This means a lower upfront payment to the company, but does mean the financing company assumes the risk on the receivable. For companies that are confident their customers will pay the invoice, they can choose the recourse factoring option. This means they’ll receive a higher upfront payment. However, it does mean the company must assume liability for the unpaid invoice.done

Factoring is not the end-all-be-all solution. Companies can’t merely rely upon factoring to lessen the impact of a customer who won’t pay their invoices. However, when factoring is coupled with common sense and sound business practices, it affords companies a position of strength by protecting their interests and easing their cash flow concerns.

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Bernard Linney – Small Business Financing with Factoring

May25
2011 Leave a Comment Written by admin

Business credit is such a vital aspect of business growth. Companies need affordable credit in order to finance their payroll, inventory, daily operating expenses and to put plans in motion to grow their business. Whether it’s making that purchase for extra material to lower production costs, or needing a fresh infusion of cash to make that capital expenditure, companies need access to immediate financing. To alleviate this pressure a number of businesses have turned to invoice factoring as means to raise funds. Looking forward through 2011, a number of companies have decided to make invoice factoring their primary means of business financing. So, what makes invoice factoring such a safe haven for today’s businesses? More importantly, why has invoice factoring become such a mainstay for companies, and why is it so successful in addressing their financing needs?

When discussing business financing, what’s the most important aspect of success? Well, some might say that it’s essential that it be affordable, while others would point to the need to have sufficient credit and yet others might say that financing must be consistently available. Invoice factoring is all these things and more. It allows companies to access affordable business credit without breaking the bank. It’s an impactful and powerful form of business financing that’s inexpensive and has no credit limit. It works by allowing companies to use the liquidity within their customer’s unpaid invoices. A financing company will advance the company credit based on the invoice’s value, the customer’s ability to pay that invoice and the age of the invoice itself. In essence, the financing company is purchasing the right to collect on the invoice. Once that invoice is paid, the financing company reimburses the difference between what was originally advanced and the invoice’s value. Companies pay a small fee for the financing company’s services and in return, they secure a consistent supply of affordable business credit.

Invoice factoring is simple, straightforward and most importantly, an endless source of business financing that isn’t tied in any way to the company’s credit rating, credit history or its finances. This makes invoice factoring an extremely flexible financing source and one that all businesses can benefit from, regardless of their credit standing.

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Cash Flow Management Strengthens A Business

May11
2011 Leave a Comment Written by admin

One concern that most business owners have is cash flow management. Companies must meet payroll, pay their operating expenses, pay vendors and creditors and still try to produce a profit. It’s not easy, and it’s becoming increasingly difficult amid the backdrop of an economy slowly coming out of a painful recession. Cash flow determines many of the previously mentioned concerns and is often the most difficult concept to grasp for business owners. Because so many customers are taking longer and longer to pay their invoices, businesses are left with little resources to meet their debt obligations. In turn, they become late themselves and take their overall credit rating can be negatively affected. However, there is a solution to all this and it involves receivables factoring. What is receivables factoring and what role does it play in helping a business better manage its cash flow?

Receivables factoring is a business financing practice that has been in existence for many years. It’s one predicated on using a company’s existing assets to finance its day to day operations. More importantly, it provides companies with access to immediate working capital in order to do what they want, when they want. It’s about empowering the business and allowing them to fund their plans for growth. Receivables factoring works by allowing companies to use their customer’s unpaid invoices as a form of business credit with a financing company. Unlike conventional bank loans, the financing company bases their decision purchase the invoice on the customer’s ability to pay the invoice, and not the company’s finances or credit rating. This affords businesses a tremendous amount of flexibility. They can secure the working capital they need to better manage their business and reduce their daily cost of money. They are not left to finance their account debtor’s business and aren’t hit with late payment fines from vendors and creditors. This improves cash flow and allows companies to become more proactive in managing their finances.

Receivables factoring works because it advances a portion of the invoice’s value to the company. In return, the financing company collects directly from the customer, reimburses the company the difference and then deducts a fee for their services. Companies no longer wait for customers to pay, are able to better manage their business, and no longer have to concern themselves with an uneven cash flow stream. It’s about finally doing away with cash flow concerns and relying upon receivables factoring to make that happen.

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Bernard Linney – Purchase Order Financing vs Venture Capital Investments

May02
2011 1 Comment Written by admin

Businesses today have a vast number of financing options available. They can pursue banks or credit unions for business loans and credit lines, or they can try and secure capital investments from private investors and venture capitalists. However, there is one option that has quickly established itself as a viable alternative to all these methods. Purchase order financing allows businesses of all sizes to use their existing purchase order as leverage or collateral to secure the working capital required to fund their growth. This allows companies to pursue every possible opportunity and not be burdened by the size or scope of those opportunities. So, what is purchase order financing and how does it compare with capital investments from private firms?

Purchase order financing is simply taking a company’s existing purchase orders from credit worthy companies and using them to secure capital from a financing company. In return, the financing company will advance the needed funds to purchase the required raw materials and parts to complete the order. As mentioned, this allows companies to pursue the biggest and most lucrative contracts without concern about how and when they’ll be able to pay their vendors. Once those orders are invoiced, the financing company will proceed to collect on the invoice directly from the customer and reimburse the company the difference between the invoice’s total value, and what was initially provided as credit. How does this compare to venture capital investments? For one thing, the company is able to keep its business financing requirements within its own doors. They avoid the pressure of outside influences and instead rely upon their own assets to secure the working capital needed to fund their operations. This affords them a certain level of autonomy not typically found with private investors.  Another advantage of purchase order financing is that the company can retain its ownership as opposed to selling a portion to a venture capital firm.

Purchase order financing is a viable alternative for today’s businesses looking for a relatively simple borrowing method. The best part of this approach is that the financing company bases the decision to advance money on the value of the order itself and the customer’s ability to pay the invoice. There are no credit checks and no need to expose the company to a review of its financial statements. This allows companies to maintain control over their financing and empowers them to manage their own assets accordingly.

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Bernard Linney – The Benefits of Factoring Companies

Feb10
2011 Leave a Comment Written by admin

Managing a business is never easy, but it’s made more difficult when confronted with an uneven cash flow stream. Managing cash flow is a going concern for all businesses, regardless of size. Financing customer receivables is not only a cost in itself, but a tremendous drain on a company’s resources when they must meet their day to day operating expenses. So, what’s the solution? Well, business loans and credit lines are becoming less and less of an option as banks and lending institutions tighten credit limits and lending practices in response to the global recession. However, there is a solution and it comes in the form of receivables factoring. What is receivables factoring and how can it help businesses manage cash flow?

Receivables factoring simply involves a company selling its outstanding customer invoices, or receivables, to a finance company in return for the right to draw upon the receivables outstanding amount. In a sense, it’s a short term business loan without the added headache of high interest rates. In return, the finance company will proceed to collect on the invoice from the customer. Once the full amount is collected, the finance company will reimburse the company the difference and deduct a small fee for the transaction.

Payouts for receivables factoring depends upon the credit worthiness of the customer, their market or industry and the general likelihood that the finance company will be able to collect. Typically, initial payouts are anywhere from 75% to 85% of the receivables value. Aside from the fact that there are little to no interest rates charged, the overall benefit for business owners is ease of use. Factoring has been adopted by a number of industries in response to customers who have typically benefited from extended payment terms. Companies that use factoring have excellent bottom lines, are well managed and market leaders, but suffer from issues with customer payments. A perfect example would be the housing construction industry where construction requires a significant financial outlay with little opportunity to recoup that investment until the property itself is sold.

Companies that have significant assets tied up in their receivables can turn those receivables into immediate cash. Finance companies are flexible in options and provide their customers with the benefits of using recourse & non-recourse factoring. Recourse factoring allows the company selling the receivables to secure a higher initial payout provided they guarantee the finance company is paid on the invoice. Non-recourse has a lower initial payout but allows the company to avoid any guarantees relating to invoice payout. Overall, factoring is becoming a more viable option for business owners looking to avoid the high costs of business credit lines and loans. It is not an indication of a company’s overall health, but merely a solution to short term cash flow issues.

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Business and Corporate Financing – Bernard Linney

Feb03
2011 Leave a Comment Written by admin

Regardless of the continuing credit crunch there are many commercial financing choices out there in 2011. Not from the banks which require stellar credit score historical past and consistent and enormous business standing to be able to lend, however from asset based mostly lenders who, based mostly in your property, could be happy to lend you money. It’s a great option for small- sized or rising companies who find it onerous to get financing from different financiers.

You would get financing primarily based on bill factoring or based mostly in your other assets resembling stock, tools, plant, or property. In the case of invoice factoring, you can be getting money primarily based on your accounts receivables. You’ll be sending your invoices to the lender who would liberate credit score for you primarily based on the invoices. The invoices would then be sent to your prospects who can pay your lender directly. Primarily based on individual lender insurance policies, you will get roughly ninety to ninety five% of your accounts receivable as money this way.

An instantaneous advantage of the bill factoring course of is that you’ll be getting the cash your prospects owe you virtually instantly (albeit not from the customers). If in case you have prospects who take a long time to pay, then this is the right option. The lenders will even do customer credit checks and share this data with you. This allows you to provide credit to new prospects so as to develop what you are promoting without compromising your cash requirements.

If you happen to do not have receivables then asset based lending could also be for you. The cash stream on this case may be a decrease proportion of the collateral than what you would get based mostly on accounts receivable, but the outcomes can be as quick and the opposite advantages would also apply. Property are sometimes valued by a third celebration to receive credit. This can be a good option in case you are in quick need of working capital and cannot find financing from banks.

In actual fact, asset based lending is a good business financing choice even when you are able to get financial institution accredited loans since you will have much more flexibility with one of these lending. You’ll be able to take the cash while you need it as an alternative of in a lump sum as financial institution financing works. You should not have to submit your information for regulatory critiques as banks need you to, and therefore, you have got extra freedom to work.

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Accounts Receivable Financing on Youtube – Bernard Linney

Feb02
2011 Leave a Comment Written by admin

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Asset Based Lending For Small Businesses – Bernard Linney

Feb01
2011 Leave a Comment Written by admin

There’s an option for small companies who can not discover financing wherever else ? asset  primarily based lending. You can use your liquid or fastened assets as collateral to get loans based mostly on their equity. There are various asset based lenders who will give you totally different choices based on what you may have and what you need. Within the present economic atmosphere the place getting credit score from banks has turn into extraordinarily difficult, asset based mostly lending is the absolute best solution for businesses.

There are 3 ways by which the asset primarily based lenders usually present loans. You will get loans on your accounts receivable (the amount that your customers owe you), your stock, or your fixed properties corresponding to crops or equipment. In the first case, you need to present your listing of accounts receivable to the lender, and they will approve the list and then open up their credit score as much as a sure percentage (85% of what you may get or comparable terms). You will then send clients the invoices, and they’ll pay the cash to an account from which the lender can directly take the payments. These payments shall be taken as payments towards your personal excellent stability with the lenders.

Within the case of stock or tools you may have them valued by an expert or a third celebration, and the lender would lend you a percentage of the worth of the inventory or the equipment. You might be more likely to get more on your tools than your inventory. As you make funds in the direction of your credit score balance, extra cash will likely be made accessible to you which ones you can use to fund different enterprise activities.

If your small enterprise is showing speedy progress and therefore will not match the tight criteria that banks search for, then asset primarily based lending is for you. You will get asset primarily based financing even should you don?t have a stellar personal credit rating for the reason that lenders solely have a look at your assets and never your credit score history. The lending is low danger for them because of the collateral. A further bonus is that the lenders will not be reviewing your financials like banks would and hence you will have a bit extra freedom. Additionally, you’ve gotten the liberty to handle your money stream rather than getting a lump sum as within the case of banks.

For those who wouldn’t have working capital to take on a project or in case you are attempting to shortly purchase financing to pay your payments, you no longer have to worry. You might get asset based lending.

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Accounts Receivable Financing Options

Jan31
2011 Leave a Comment Written by admin

Account receivable financing, which is often known as Factoring, is an efficient choice for any enterprise that requires enough cash availability as working capital that can not attain financing from conventional or standard money lenders. Firms need additional cash circulation of their business to satisfy growth, seasonal demands, enterprise opportunities as well as money requirement for short time period need. Accounts receivable financing is a superb answer for any enterprise as it provides immediate and flexible cash. This not only opens avenues for the business to grow, but in addition helps in restructuring, hiring further employees, profiting from provider reductions and even funding payroll.

With the assistance of accounts receivable financing options, you might be in a better position to have entry to cash without giving up company equities. Moreover, account receivable financing choices are less expensive and restrictive in comparison with fairness financing. Accounts receivable financing lets you decrease or improve the financed amount based mostly in your firm?s needs and the current dimension of your business. It also provides administrative support to assist handle all of the receivables without using further workers and lets you have entry to cash on request, but this is based on your account receivable eligibility criteria.

Numerous firms who provide accounts receivable financing provide their purchasers with buyer credit score opinions for each existing and new prospects, collection services, invoice processing, and customized reports. There are various benefits of accounts receivable financing: it’s flexible, it may be elevated when your online business grows and it may be decreased accordingly; it allows the business to get again to traditional banking; it helps repay enterprise loans and make payroll; it helps to meet up seasonal calls for; it gives you the power to reinvest in enterprise and fund advertising to make your enterprise grow;  it helps you to focus on your firm?s core business; and it helps to take early reductions on cost purchase.

Accounts receivable financing saves time and permits you to generate new business and service your customers. Receivables management will provide help to to shorten the turnaround time of funds which not only ensures excellent cash flow but in addition minimizes curiosity expenses. Thus, accounts receivable financing will assist your business grow and give you sufficient money to fulfill expenses.

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Understanding Invoice Factoring – Bernard Linney

Jan30
2011 Leave a Comment Written by admin

Bill factoring is a crucial a part of many enterprise, and it supplies speedy money towards the invoices. Your business can be profitable if you can make all of your clients pay you in a single day. This might sound challenging , but it may be made attainable by bill factoring. You may ask whether or not it is potential to bring in extra gross sales from huge firms that pay in 30 to 60 day s. Your financial institution could not be able to offer you adequate working capital because of enterprise issues or profitability points, but with bill factoring all of those problems could be solved.

There have been corporations which have revolutionized the concept of invoice factoring to an extent that enterprise owners can now easily get the most effective rates by bill factoring to meet the business requirements and needs. Quotes for bill factoring may be obtained on-line, and in order to get the best quotes, you will have to complete the onl ine quote application. It is at all times higher to contact the companies offering invoice factoring companies straight and get all the mandatory information and also obtain a factoring quote for accounts receivable. It used to take several days to determine what sort of data or service could be useful and finest suited for your business , but now the method of invoice factoring has been streamlined and purchasers  can easily understand the process.

Bill factoring is a course of which makes it possible for corporations to promote their credit score- worthy account receivables in opposition to cash. It is a frequent monetary instrument utilized by companies to make sure there’s adequate  money stream in the business. P er the recent market developments, most small companies want to work with bigger companies because of sales growth opportunity, and this has result in a market growth . Creative enterprise entrepreneurs are actually discovering ways to get further gross sales without compromising cash flow.

There are numerous advantages of bill factoring. It allows rapid cash entry, expands gross sales opportunity, will increase your customer base to incorporate those that have high credit score worthiness, and facilitates consulting for credit score choice and getting assist from courteous professionals, if necessary. Aside from these benefits there’s additionally similar day funding benefit as the process of bill submission can be made through fax, mail, in addition to scanned images. After processing of the bill, the amount is transferred to  the  businesses bank account. The process is sort of easy and easy.

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