Factoring Training for Small Business Funding

Working with small businesses receivables is a specialized segment of the factoring industry.  It’s also lucrative!

Less competition from the large factoring companies can equal more opportunity.

Just ask Jeff Callender, founder of Dash Point Financial Services.  He went from start-up cash flow broker to small business factoring funder in just a few short years.

Jeff generously shares his tips for success gained from real life experience.  In addition to his acclaimed Small Factors Book series, he provides workshop instruction at factoring trainings and association meetings.

Here’s a look at an upcoming workshop designed especially for small business factoring.

International Factoring Association Presents:

Small Factors Workshop

Thursday & Friday, October 14th & 15th, 2010

Rio All-Suite Hotel & Casino Las Vegas, NV

Small Factors have unique needs. This workshop is designed to give small factors a forum to discuss and learn. Emphasis will be on round table discussion, networking and education.

We will be discussing specific topics that are of concern to Small Factors. Some of the topics that we will concentrate on are:

* Locating working capital

* New and innovative technologies

* Risk mitigation in the present economy

* Legal issues

* Marketing

* Making your business mobile

* New products to offer

* Outsourcing

* Working with attorneys

* New due dilligence techniques

* Case Studies

The second component of our meeting will concentrate on networking. We will begin on Wednesday evening with a Welcome Reception. Breakfast and lunches will be held together to give you a chance to network with the other attendees. Dinner on Thursday evening will also be included.

Moderators: Jeff Callender of Dash Point Financial and Ryan Jaskiewicz of K & L Finance Company with legal council provided by David Jencks, Esq.

The workshop cost is $645 for IFA Members (or $695 for Non-Members) with registration available online at factoring.org

Source: International Factoring Association

We can’t promise you’ll walk away from the Vegas casinos with money but we do know you’ll take  home valuable factoring training!  If you aren’t able to attend the workshop you might want to check out these affordable eBooks authored by Jeff Callender:

How I Run My One Person Factoring Business – $10.95

Marketing Tools (also included in the Small Factor Series) – $13.95

Small Factor Series – 6 Essential eBooks for Factors and Consultants – $95.00

Could You Tell a Client They Don’t Need Factoring Help?

I witnessed an odd exchange of dialogue the other day on the Internet. It would have been humorous except neither of the cash flow consultants came to the right decision – over a long period of opportunity.

The “Dilemma”

The exchange started with a simple post from a factoring broker that had a “dilemma” with a new soon-to-be client.

In going over the client’s information, the consultant discovered that the client really did not need factoring help. He had two other alternatives that were clearly better choices for the client , with no additional risk.

The consultant was concerned how he was going to keep is his client focused on factoring so he could get the deal. “Any feedback would be helpful.”

Enter the “Expert”

The post was almost immediately replied to by a so-called “industry expert” that had been involved with similar negotiations (all going his way of course).

His advice bordered between “bait and switch” and “smoke and mirrors.”

Seriously?

In the ongoing posts back and forth neither of them ever considered actually telling the client that there were better options available.

What? Risk losing the deal in exchange for taking the professional higher ground?

Yes, and here is why…

1. The client is going to find out anyway. When they do, you are going to look like either an idiot or a thief. Ok, maybe those sound a bit harsh, but you will probably be viewed somewhere in the not so favorable middle.

2. They have friends to send you. Your “missed opportunity” with this client could come back ten-fold if you actually help your client. Trust me, he is going to tell every one of his colleagues about you. You saved the day, even if it didn’t involve invoice factoring. Who do you think his friends are going to call?

3. They have friends to steer away from you. Same as the last point, but in a bad turn of reversal. Remember, he will find out what happened, and will be sure to tell his friends if he thinks you purposely didn’t help him in order to make a few bucks.

Look, the rule of thumb is simple…

Always do the right thing.

Help your client in any way, shape, or form that you can. If it involves factoring receivables and you get a commission on the deal – that’s great!

If it doesn’t, but you are still able to help, just consider that you put some future business on lay away – maybe it will show up just in time for the holidays!

Are You Linked In with Factoring Groups?

If you are looking to network with other factoring professionals then it’s time to get active with LinkedIn.

This online networking platform is doing for business what Facebook did for friends and family.

LinkedIn offers free membership for networking with over 70 million members in 200 countries.  But even better, you can specify the type of professional groups you want to actively follow.

The factoring industry alone has over 50 Groups focused on this specialized segment of commercial financing.

If you are a factoring broker be sure to check out these most active groups:

• Commercial Finance Association
• Factoring Professionals (FP Americas and FP Europe)
• Trade Finance, Factoring and Forfaiting Professionals
• The Global Commercial Finance Network
• FactorNet Lead Referral and Networking Group
• International Factoring Association
• De Lage Landen Member Community
• Asset Based Finance Association LTD
• International Factors Group
• National Funding Association
• Commercial Finance Today
• Factoring Brokers

Recent discussions ranged from where to find accounts receivable funders for dentists to the potential impact of the Wall Street Reform Act on the factoring business.

So what are you waiting for?

Leave the embarrassing photos and weekend updates to Facebook and start using LinkedIn to network with factoring professionals that can help grow your business.

Construction Factoring Dips Along With the Construction Industry

Very few companies are financing businesses in the construction industry today as the industry risk is still too great. Many general contractors and subcontractors are reeling from the effects of the building bubble.

And to add insult to injury, many construction companies who obtained a business loan will probably, or already have found themselves out of covenant. This is due to falling sales. Simply put, banks won’t let them tap into their lines of credit until their sales are back on track.

What’s more, even in the factoring industry, few companies dare to offer construction factoring since the risks of default are still high. However, in many cases a factoring company will be able to help. There are quite a number of firms specializing in construction factoring. Read more

Haitian Amputees and Small Businesses Get A Leg Up From AAA Factoring Group

Utah based factoring company AAA Factoring, which is owned by 71 year old amputee, helps small businesses get the financing they need to operate while pledging 5% of company profits to help Haitian amputees.

MAY 4, 2010 — CENTERVILLE, Utah — AAA Factoring announced today that beginning June 1, 2010,  5% of the company profits will be donated to charities that help Haitian amputees that lost their limbs in the recent earthquake.

The company is owned and operated by Duane H. Marchant who is an amputee himself.  Duane lost his right leg after a fluke accident and several failed surgical attempts to save his leg. Read more

Factoring News: Two New Slow Paying Customers

Your biggest and best customers might just now be your slow paying customers.

This disturbing trend in accounts receivable financing is affecting both business owners and factoring companies. Here’s an enlightening update: Read more

Medical Coding Factoring Terms

When a medical coding service is considering selling their receivables to a factoring firm, it’s important to familiarize themselves with some common factoring terminology. This is a quick reference guide outlining some of the more commonly-used factoring terms to help medical coding business owners navigate seamlessly throughout the entire factoring process.

ACH (Automatic Clearing House) – One method factoring companies use to electronically transfer funds into an Account Creditor’s account. When an ACH is initiated, the funds are made available electronically in the Account Creditor’s account on the next business day.

Account Creditor – You, the client and provider of medical coding services.

Accounts Receivable – The money that is owed to an Account Creditor for the services it has provided to customers on credit. The amount indicated on an issued invoice.

Advance Rate – Money provided immediately to the Account Creditor-expressed as a percentage of the total invoice amount. Frequently, factoring firms advance between 70-90% of the invoices it buys.

Account Debtor – The purchaser of medical coding services who is responsible for paying the invoice, (a.k.a. your customer.)

Cash Flow – The measurement of cash coming into a company via accounts receivables and cash going out of a company via accounts payable and payroll.

Collateral – An asset that is promised or given to a funder to guarantee the discharge of an obligation by the Account Debtor.

Discount Fee – A fee assessed by a factor that purchases accounts receivable. Traditionally, the discount fee is determined by the size of the invoice, the length of time it takes to collect the funds and the creditworthiness of the customer.

Face Amount or Face Value – The total amount of an invoice.

Medical Coding Factor – A company that provides operating capital to businesses through the purchase of their invoices.

Medical Coding Factoring – An alternative financing arrangement, in which a factor purchases the accounts receivables of a company, advances a specific percentage of the invoice immediately and then collects on those invoices.

Medical Coding Invoice – A legal debt instrument which indicates the amount due from a customer to pay for delivered medical coding services.

Non-Recourse - The period of time in which the accounts purchased by the factor remain the factor’s accounts and do not revert to the Account Creditor if unpaid due to an insolvency event. The factor accepts full credit risk for any and all accounts that it purchases during this period.

Notification – The process whereby the factoring company communicates to an Account Debtor that an invoice has been purchased from the Account Creditor and that the Account Debtor is to pay the factoring company directly.

Recourse – The period of time in which accounts purchased by the factor are able to revert to the account creditor if unpaid due to an insolvency event. The client accepts full credit risk for any and all accounts that it sells to the factor during this period.

Reserve – Amount of money that is not immediately provided to the company factoring its accounts receivable when the account is purchased by the factor, expressed as a percentage of the total invoice amount. (Advance Rate + Reserve = 100% of Total Invoice)

Reserve Release – The Reserve, minus the discount fee, is transferred by the factor to the client after payment is received.

UCC (Universal Commercial Code) – The laws dealing with commercial business.

UCC-1 – The financing statement (Form UCC1) filed to perfect a security interest in named collateral.

Keeping this medical coding factoring terminology guide close by during conversations with factoring firms will help medical coding business owners better be able to speak and understand the “factoring language.” Using this article as a reference also allows medical coding business owners to save time by focusing on asking the right kinds of questions to locate the best medical coding factoring firm for their company.

Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the medical coding invoice funding market place. Through a process known as factoring, PRN Funding provides business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding provides medical coding agencies with flexible and immediate access to capital. We give you the freedom to factor what you want, when you want, whom you want, for as long as you want. Prior to founding PRN Funding, Mr. Cohen was an executive officer of The MRC Group, a national provider of Medical Transcription Services. Contact Philip Cohen at toll-free 866.776.5407 or via email at pcohen@prnfunding.com. Please visit PRN Funding, LLC on the web at http://www.prnfunding.com/

Article Source: Ezine Articles – Medical Coding Factoring Terminology

Why Use Spot Factoring?

Spot factoring lets a business raise working capital by receiving an advance on just a single outstanding invoice. Here are 3 reasons it is effective to offer spot factoring to clients, as shared by Steve Ontiveros of Resource Business Partners, Inc. Read more

Factoring Conference and Workshop Schedule

Searching for training and networking in the accounts receivable factoring industry?  The International Factoring Association (IFA) has announced their conference and training courses for 2010.

These training courses provide factoring brokers, funders, and investors opportunities for ongoing education and networking in the world of invoice factoring. Mark your calendars for these upcoming events: 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!

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