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We look forward to working with you!

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Fred and Tracy Rewey, FactoringInvestor.com

Handling Customer Questions About Factoring Invoices

Many companies that start using factoring often have questions regarding their customers.

How will they be treated? What if they pay me directly? What do I tell them? Here are some common questions and helpful answers. Read more

Bank Factoring or a Factoring Company?

A common question among companies is whether they should pursue bank factoring or deal with a company that specializes in factoring when deciding to sell account receivables. Read more

Factoring FAQs

Ok, you are considering factoring and you are busy. You are not looking to read volumes of factoring manuals or sit through a weekend seminar. You just want the 60 second big picture overview.

Well, this article is for you! Read more

How To Make Money and Earn Fees in the Cash Flow Business!

Many people have heard about the cash flow industry but don’t really know how the average person can profit from it. There are basically three methods for handling the fees paid to cash flow brokers or consultants, as follows:

1. Referral Fee
2. Establish Your Own Fee
3. Set Commission Fee

1. Referral Fee

Pros: Very Little Paperwork/Time.
Cons: Typically smaller commissions.
Cash Flows: Just about any cash flow can be “referred.”

The Referral Fee structure is the easiest, particularly if you already have a full time job and you have limited extra hours in the day.

With the Referral Fee structure you simply find a deal and refer it on to a Funder or Master Consultant that accepts referrals.

For the most part, you have no or very limited paperwork. You fill out a worksheet stating the person’s name and info about the cash flow. Once that information is sent, you are pretty much done. The funder will do all the work and if the deal closes send you a referral fee.

2. Establish Your Own Fee

Pros: Greater control, greater fees
Cons: More Paperwork (but not overwhelming).
Cash Flows: Mortgage Notes, Lottery Winnings, and Structured Settlements

The Establish Your Own Fee method takes a bit more work than the Referral Fee method but may double or triple your income.

With the Establish Your Own Fee method you will still fill out the worksheet but you will work with a couple funders to get the best “net” price from them. Once you have a “buy” number from a funder you simply subtract how much you would like to make and offer the seller something less.

How much less is up to you. On some deals you may only make $500, while on other deals you may make several thousand. It really depends on how much the seller needs and your negotiation skills. In the end, you are trying to find a fair price for your time and the seller.

Once the seller has agreed on a price, you will need to send the seller a contract agreeing to the terms. Typically the seller will not know your fee but that information will certainly need to be shared with the Funder (how else can they mail you check?!).

Depending on the type of cash flow deal, you may need to handle and/or pay for some of the due diligence, like an appraisal or title work for a real estate note.

3. Set Commission Fee

Pro: Potential Residual Income, Funder Does Most of the Work.
Con: Some ongoing follow up may be needed.
Cash Flows Include: Factoring Receivables, Delinquent Debt, and Pre-Settlement Lawsuits

A favorite among cash flow consultants is the ability to create residual income. Some cash flows, such as Factoring, do not allow the consultant to determine his or her own fee.

The cash flow consultant gets a “percentage” of what the Funder makes on a monthly basis. This percentage is established in advance.

Not all Set Commission Fees are ongoing. Some insurance based or delinquent debt fees are set and not reoccurring (a one-time purchase) – but the commissions can be very attractive.

There are also ways to create ongoing income on some cash flows such as mortgage notes using methods such as the “Buy Full, Sell Short” strategy using the partial purchase.

For the most part, which fee structure you use will be determined by the type of cash flow or the Funder. Given enough time in the industry you will realize the benefit of each of the ways to earn income!

Can a Company Use Accounts Receivable Funding If It Already Has a Bank Line of Credit or Tax Liens?

Many times a company thinks if they have an existing bank loan or line of credit they will not qualify to sell their receivables.

In some cases a company may still be eligible to work with a full-service factor and realize the benefits of factoring. Read more

Level the Playing Field by Learning How to Use a Financial Calculator

You may have walked out of meetings with bankers, accountants, and CPA’s thinking you were at a “financial disadvantage” as they danced their fingers across a financial calculator and reported their results.

You may have even wished you could “crunch the numbers” yourself for peace of mind or to make sure no one was taking advantage of you.

If either of those situations sounds familiar, then you need to learn how to use a financial calculator. Read more

Don’t Factor Your Receivables When…

Small business owners are no strangers to watching every dollar. When a customer is late to pay an invoice the business feels it.

This leaves many owners losing sleep and making Read more

How Can Small Business Turn to Factoring?

It seems wherever you turn it is difficult for the small business owner to get the same financial flexibility afforded larger companies.

More and more small businesses are realizing that the process of factoring is not out of their reach. Read more

Single Invoice Factoring Provides Cash Flow for Small Businesses

FROM MARKETWIRE

May 13, 2009 BETHESDA, MD 

The Interface Financial Group (IFG), North America’s largest alternative funding source for small business, reports instances where invoice factoring, when a business sells its accounts receivable invoices at a discount, has helped a company stay in business in the midst of the current global economic downturn.

A recent report by BizBuySell.com, which tracks the health of small business, indicates that there has been a decline in business-for-sale transactions and valuations. Additionally, the number of closed transactions reported in the first quarter decreased by 36 percent as compared to the same 2008 time period. As many small business owners across the country are struggling, many looking for answers on how tough times are affecting the value of their businesses. Read more

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