A freight factoring company is interested in factoring invoices on freight bills. That is, goods that have been delivered.

One advantage is that the freight company itself is unlikely to get any “offsets” that the creator of the goods might. The freight company delivers the goods and their compensation, like most transactions, is in the form of invoice.

Like traditional underwriting methods, the factor will look at the customer or debtor for the strength of the deal, not the trucking company itself. This can be a big help to start up companies or companies with a less than perfect track record wanting to finance their business.

Also called “Transportation Financing,” this industry has cash flow challenges like any other business. Operational expenses include fuel, truck repairs, and rentals. Although profits can be great, it can be challenging if you are still waiting to get paid and your expenses are immediate.

Once the account has been set up, funding occurs at the same speed as tradition factoring transactions, usually within 24-48 hours.

If you are interested in freight bill factoring you will typically need to deal with a factoring company that specializes in this area.

Although you may get the attention of a diverse factoring company, one that specializes in transportation funding can provide the quickest service and the best price.

There are a lot companies that buy invoices, but even less that are actually funders themselves. Oftentimes, especially on the Internet, there are many companies that simply refer the deal on to a factoring company – taking a fee in the process.

Although working with a consultant or factoring broker certainly has its advantages, at the very least make sure you are dealing with someone that is professional and credible.

Anyone can have an impressive web site that would leave you to believe they are more than capable to handle your factoring needs. The best factoring companies provide you solid information so that you can make an intelligent decision going forward.

What are their fees?

Do they have references?

Do they fund the deal themselves or is the deal sent on to another company?

Will the invoices be recourse or non-recourse?

How long have they been in business?

Are they interviewed by any of the reputable web sites?

Factoring companies in America and around the world offer great services for small and large businesses alike. It is helpful to take time to determine that you are dealing with a professional consultant or funder to ensure your transactions go smoothly.

Factoring Investor (FI) caught up with Gina Frame, Assistant Manager Sales &  Marketing, to fill us in on how Monterey is helping businesses and cash flow brokers turn receivables into cash.

FI: What transactions will your company consider funding?

Gina Frame: Monterey specializes in purchasing consumer retail installment contracts. These could be contracts where consumers are making tangible purchases such as furniture, pets, jewelry, etc.

While real estate and auto fall outside of our parameters in most cases, we will consider just about anything that a consumer can purchase and finance. Intagible purchases qualify as well. Those could be vacation memberships, golf club memberships, and services such as wealth management, seminar/boot camps, and others.

Many of Monterey’s clients are nationally and internationally known as they may be advertising their products via television, satellite, magazines, radio, and news print. We have found some niche markets over the years where we are still one of very few funding sources will participate, such as the flex pay programs promoted in the direct response and infomercial industry.

FI: How did you get your start in the business?

Monterey Financial started over 20 years ago as a delinquent debt collection company. Our source of business at the time was in collecting delinquent timeshare mortgage and maintenance fee accounts, but we quickly added our loan servicing and consumer finance division which have grown exponentially since our inception.

FI: What unique benefits does your company provide?

We offer complimenting services under one roof including consumer finance, loan servicing, and delinquent debt collections. Many of our clients use all three services so that their receivables funding and management needs are completely satisfied, but note our loan servicing and delinquent debt program have the ability to service and collection notes which either consumer or commercial receivables.

FI: Can you please highlight a business you were able to help recently with your services?

Without disclosing too much, Monterey has recently purchased two large multi-million dollar portfolios from another finance company who needed to free up their capital. In less than 2 months we were able to add $10 million in receivables to our books because we are not only still in business, but well capitalized.

FI: Will your company work with cash flow brokers or consultants and how do you handle the commission structure?

We rely on consultants and brokers to bring new business leads to the table. We have been paying broker commissions since the beginning. We offer commissions to be earned in all three services and those commissions will last for the life of the client. It is not uncommon that brokers will earn commissions for years after one introduction.

FI: What do you consider the best methods for finding leads to make money in the cash flow business?

For consultants we see that the most successful brokers are those who have a strong Internet presence and who have made the rounds the hard way, knocking on doors and making calls.

Unless a broker starts out well connected, getting into regular networking circles, sending updates to everyone they meet, and attending networking events will all forge beneficial relationships as long as brokers follow up. A broker who sits back and waits for the phone to ring is likely to starve for new business.

FI: What advice would you give to new professionals just starting out in the cash flow industry?

Hit the pavement and use your daily hours as means to find local businesses who will meet personally with you and exhausted Internet search engines. When searching for new leads, plug in the types of businesses which are listed with each of your funding sources. Businesses who already use a funding source may not be happy and may be very open to exploring the possibility of getting a new deal, or finding a new company with better services.

Monterey works with many clients who are working with other consumer finance lenders. We could be splitting the business for very high volume clients or we may be reviewing and purchasing contracts which traditional lenders will not consider for approval. Either way, a successful consultant doesn’t immediately hang up the phone when a business says that they are already working with someone.

FI: What is the most common business mistake you see people make?

Trying to force a fit is by far the biggest mistake. Brokers are either not listening to the clients or their funding sources, or both. There are brokers who think that they can force a deal through, but it ends up being a waste of time for all involved.

FI: Given the current economy, have you made any changes in the way you transact business?

Monterey has made several changes in our financing parameters. For clients we have tightened up requirements, especially clients who deliver services over a long period of time. Those are high risk client and Monterey stands to lose a significant amount of money if they go out of business.

FI: Where can people contact you to obtain more information?

Our toll free number is 800.456.2225 and anyone can ask for the sales department. If a broker wants to revisit our program, or if one has never spoken with us, we are happy to provide a comprehensive broker package and answer any questions. Brokers may also contact us through our website, www.montereyfinancial.com, or by sending an email to sales@montereyfinancial.com.

FI: Is there anything else you would like to share with our readers?

If you haven’t read through our broker package in a while, request a new one and take a glance at our rates, industry list, and commission structure. The newest revision includes a jump on our max finance amount (per contract) from $15,000 to $25,000. This will open up new opportunities in many industries!

It’s a competitive business and some factoring companies advertise super low discount rates to lure in accounts receivable funding clients and hit them with hidden fees later.

Want to know the true factoring charges before signing on the dotted line? Use this chart for an accurate factoring fees comparison.

Factoring Company Comparison Chart

Factoring Services

• Funding Amount Available
• Advance Rate
• Discount fee (Percentage charged per number of days)
• Minimum Discount per invoice
• Recourse or Non-recourse Factoring
• Personal Guarantee
• Validity Guarantee

Setup Fees:

• Application Fee
• Origination Fee
• Due Diligence Fees
• UCC / Filing Fees
• Documentation Fees
• Attorney Fees

Ongoing Charges and Minimums:

• Minimum monthly invoice volume
• Minimum monthly funding fee
• Administrative Fees
• Facility Fee
• Monthly Lockbox Fee
• Credit Check Fee
• Monthly lien searches

Funds Transfer Charges:

• ACH fee (electronic funds transfer) – 2nd day
• Wire transfer fee – same day
• Overnight check fee

Other Charges:

• Same day funding
• Minimum factor fees (over life of account)
• Inactivity fee (if no activity for certain number of days)
• Early termination fee
• Forwarding fee to send money to a new factor
• Missing notation fee (factor notation on invoice)
• Check conversion penalty
• Processing Fee for invoices not factored
• Other Fees (What, there’s more?)

General Practices:

• Time for new account setup
• Time for new customer credit approval
• Frequency of rebate payments
• Float (number of days for customer checks to clear)
• Spot factoring availability
• Length of contract
• Automatically renewing contract

Copy this chart into a spreadsheet and use it to compare quotes for factoring services and charges. A few simple questions today could save thousands in dollars and surprises!

If you’re searching for reputable factoring services be sure to grab a copy of the 2010 Factoring Company Directory in the bookstore.

Source: Chart adapted from comment posted by Jeff Callender of Dash Point Financial sharing how his company spells out costs.

As an industry, construction has always been difficult to finance. This is in part because each contract carries a lot of risk since many things can go wrong. Also, each contract has many players – the project owner; the general contractor; the subcontractors; the financing institutions; which increases financing complexity.

Although demolition companies are considered to be in the construction trade, they are not always as affected by their issues and can be easier to finance. Demolition work tends to be done at the start of the project and is not subject to the usual overruns of other subcontractors.

Most demolition companies tend to get paid 30 to 60 days after invoicing. This is a common business practice but it can create serious cash flow problems. Few companies can wait that long to get paid and still cover their own payroll, rent and business expenses. Unless the company has substantial cash reserves, it will run into problems.

Most company managers will try to cover the cash flow gap with a business loan. However, few companies can qualify for business loans in this environment. Institutions will only provide business loans to companies that are well collateralized, have strong management and have impeccable financial statements. Few demolition companies will meet this criteria.

There is an alternative that is available to most construction subcontractors. It’s called construction factoring. Construction factoring solves the cash flow problem by advancing funds against construction invoices. Instead of waiting 30 to 60 days to get paid, you get an advance from the factoring company. The transaction is settled once the GC or commercial client pays.

One major difference between factoring and a business loan is that the factoring company considers your invoice to be strong collateral, provided it’s from a good commercial client or GC. Factoring is dynamically tied to your sales, and grows as your company does.

Factoring can provide predictable cash flow to companies who cannot afford to wait up to 60 days to get paid by clients.

About Commercial Capital LLC

Looking for construction factoring? We can provide a competitive construction factoring quote. For information on our invoice factoring program, please call (877) 300 3258.

Article Source: Ezine Articles – How to Finance a Demolition Company With Construction Factoring by Marco Terry

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

Improve your chances for approval by keeping four qualifiers in mind when courting receivable financing:

1) What’s Your Type?

Factoring firms tend to specialize in certain types of invoices. They have fine-tuned their systems to fit a particular niche of the industry. If their specialty is medical factoring then they might not be into transportation factoring.

That’s why the first round of qualifying questions will include:

“What industry does the business work in? What are the goods or services they provide?”

While some companies offer funding on a variety of invoice types it pays to know any preferences upfront to avoid turndowns.

2) Size Matters

The size of a transaction matters to the factoring company. Make sure you know,

“What is the average monthly invoice volume and desired credit facility?”

Larger companies might require a minimum volume of $50,000 per month. If that’s the case then it’s better to send the smaller deals to a small business factoring specialist.

3) The Company They Keep

Good news! The credit worthiness of the business is not the primary concern. With invoice funding new businesses and other companies deemed “unbankable” are able to access working capital.

That means the main focus is shifted to the quality of the customer paying on the invoice, leading funders to ask:

“Who are the customers and how long do they take to pay?”

A factoring company generally likes to see customers or debtors paying on invoices in 30 days, although some will accept 60 to 90 days. They will look to the credit of the customer and ask for an accounts receivable aging report. If the risk of timely payment seems too great they could decline funding invoices owed by a particular customer or altogether.

4) Let’s Be Exclusive

Factors provide working capital with an advance on invoices. They need to know they are first in line to receive payment on the account receivables purchased. They’ll want to know,

“Has the business obtained prior financing with another company?”

They are trying to determine if existing claims have been filed against the receivables, making a lien search a standard part of underwriting. If it reveals there is already a UCC-1 Financing Statement of record the factoring company will want it terminated or subordinated by the creditor.

It pays to be prepared. Whether business owner or factoring broker be sure to know the answers to these questions. Then do your homework so the funding request goes to an investor that fits the deal. It will save you and the factoring company time, frustration, and rejection!

Oil Spill Workers © BP p.l.c

As a staffing company hires, trains, and pays workers they create invoices in need of payment. That can mean more cash going out than coming in, creating a cash flow crunch during a credit crisis.

Staffing companies in need of payroll funding have historically benefited from factoring invoices. The people they hire to send out on jobs are usually paid every week. On the flip side, it can take their business clients an average of 3-8 weeks to remit payment on the staffing invoices.

It’s easy to see how this creates a cash flow deficit, especially when the staffing company grows quickly to meet market demand. One solution is an immediate advance on the invoices, ranging from 80-90% depending on the staffing factoring company.

When the invoices are paid the factor deducts their fee and remits the balance to the staffing company.

Payroll funding is often available with or without the back office services related to payroll processing, taxes, and invoice creation.

One company meeting the payroll funding demand is Sterling National Bank. Earlier this month they announced making $100 million available to help fund Gulf Coast staffing companies providing workers for the clean-up efforts.

“We know the staffing industry inside and out and are fully prepared to help these companies and communities at a time of extraordinary distress,” said Allen Gershlak, Senior Vice President. (Source: Sterling Press Release – July 1, 2010 – http://www.sterlingresourcefunding.com/gulfcoast.html)

With headquarters in New York City, funding is provided through payroll financing group Sterling Resource Funding. Dale Busbee, Southeast Regional Representative, is based in Slidell, Louisiana and can be reached at 985-640-2782.

Busbee commented, “The response to this catastrophe by people in the Gulf region communities has been swift and truly inspiring. The staffing firms that are being called upon to provide an important part of the clean-up efforts are determined to not let credit limitations deter them from what needs to be done.”

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!

Knowing the right contacts not only makes things easier, it can make you more money.

Gain access to our personal Rolodex of experienced factoring funders that took years to develop. Work direct with knowledgeable investors, educators, and mentors.

Grab your copy of the 2010 Factoring Directory today!

Order Now for only $29.96 (25% Off the $39.95 Retail Price)

Business owners and factoring brokers will gain instant access to:

• Factoring Funding Sources (cut out the middle man)
• Invoice Buyers
• Medical Factoring Specialists
• Construction Factoring Companies
• Staffing Factoring
• Freight and Transportation Factoring
• Small Business Factoring
• Non recourse Factoring
• Preferred Transaction Types and Invoice sizes
• Broker Friendly Factoring Companies
• Master Consultants Willing to Mentor New Brokers
• Updated listings for over 60 factoring companies including  email, phone numbers, and websites (with easy one click access).

This directory alone could save you hundreds, even thousands of dollars when you go to sell an invoice or broker an accounts receivable funding deal.

Grab your copy today. Instant Download Only $29.96 (a 25% Savings off the Regular $39.95 Price)