The factoring industry is unique. If we had to write a mission statement for what we do it would read something like – “To provide cash flow to businesses to sustain and expand their operations”. The cash flow that factoring companies provide is through the purchase of clients receivables at a discount which allows the client to utilize the capital for expansion, take advantage of vendor discounts or any other reason they may have to keep their business an on-going concern. Over the past several years many new factors have entered into the asset based industry, as traditional lenders constricted credit to new and existing businesses. The aftershocks of the great recession had a rippling effect that was felt from Wall Street all the … [Read more...]
Finding Some Luck In The Factoring Business
How many times have you read about a new startup and kicked yourself because you had the same idea? I remember when I was in college there really weren’t any big name coffee shops on every corner but there sure were a lot of students hanging out at the cafeteria sipping on coffee while studying. Fast forward a few years later and the idea of Starbucks seems like such a no brainer. When we started our factoring company a few years ago the concept of financing accounts receivable was anything but new. There were many competitors with vast amounts of experience in the asset based lending arena. Prior to jumping into the ring we had diligently written our business plan, thoroughly studied our niche and built a marketing plan with the … [Read more...]
Four Terrific Productivity Tricks for Factoring Broker
We all know how amazing it feels to be productive. How come sometimes it feels like we’re the most productive on Saturday mornings when we don’t necessarily have to be? Being productive at the office can be a challenge, but it’s not impossible. Setting yourself up for success is crucial to getting the most out of your time. The following tips include small changes that factoring business owners can make in their day-to-day activities to maximize their productivity. Turn on an alarm clock Most of us only use our alarm clock once a day (or more if you’re a repeat snooze-offender): when we wake up. However, most of us have different periods of ‘peak productivity’ throughout the day. Ask yourself: when do you feel like you’re consistently … [Read more...]
4 Online Marketing Predictions for Factoring Business Owners in 2015
A strong online presence is vital to marketing your factoring business in 2015. With ever-increasing competition for shrinking Google real estate, slapping up a website and establishing accounts on Facebook, Twitter and LinkedIn simply won’t cut it anymore. The cash flow industry is competitive and online marketing can prove challenging to any factoring business. Change is the only constant in digital marketing, but here are four predictions that should hold true for online marketing in 2015. 1. Mobile matters more than ever Think about the last time you performed a Google search at home. Did you start up your desktop or pull out a phone or tablet? Even if you did the former, it’s likely a huge chunk of your prospects did the latter. If … [Read more...]
Looking Ahead To 2015 For Factoring and Asset Based Lenders
The winds of change are a blowing. As of the writing of this article, the Republican Party will have a majority in both the House and Senate as the country moves into the New Year. No matter which side of the political spectrum you reside, the overall approval rating of Congress was an abysmal 14% prior to the November elections which tells us they can’t do much worse in the eyes of their constituents. Will the new Congress once again try to repeal Obamacare? Will we finally see some meaningful legislation on immigration, tax reform, and fair trade deals with Europe and Asia? Only time will tell, but doing nothing surely is not a recipe for success. As for global events, the Middle East unrest continues. The situation in Syria is … [Read more...]
When Factoring Won’t Fit: A Look at Alternative Cash Flow Lenders
OnDeck. Rapid Advance. BlueVine. You can hardly turn on a television or radio or conduct an Internet search for factoring without these and other cash flow lending sites popping up. Alternative lending has become a highly publicized and, dare we say it, popular funding option for businesses to pursue. Great, you say. Why should I care? Over the last two months we covered a variety of situations that make a traditional factoring arrangement difficult, if not impossible, to close. Cash flow lenders can fund those deals that factoring companies are unable or unwilling to touch, adding another arrow to your quiver of resources to benefit your prospects. Alternative lenders can work with nearly any deal, including small medical deals; … [Read more...]
Factoring Concentrations – The Good And The Bad
Risk Management. Every factoring company in our industry knows the importance of properly evaluating their portfolios. Whether it’s factoring, insurance, mortgages or any other type of lending, mitigating losses is vital for every company’s survival. Just a few years ago we saw firsthand how the mortgage meltdown crippled the entire global economy due to lack of controls and poor risk management. In the factoring community the same holds true. Every factor conducts their due diligence using a specific set of guidelines that allows them to protect their security interest in the receivables of their clients while allowing enough room to generate new sales. In many ways it is a balancing act between sales and underwriting. The sales … [Read more...]
Prospect Yellow Flags: Factoring Deals to Approach with Caution
Last month, we covered a number of red flags for factoring brokers to avoid when working with a prospect. Besides those “back away now” situations, there are other things that can complicate your efforts to find a factoring company to work with the lead. While these are circumstances that may be resolved favorably, it is still worth your time to gather all of the information you can before investing your efforts in placing the deal. If you encounter the following situations, proceed with caution: Bad personal credit (with or without liens) To place a deal where the prospect has poor personal credit, you have to know which of your funders is willing to work with those deals. Tax liens fall into this category as well: because the … [Read more...]
Projecting Your Success In The Factoring Industry
By reading the headline of this article one would assume that I will be expressing pearls of wisdom about how to become an instant success in the factoring industry. It’s really easy, right? All you need to do is to acquire some capital either through a bank or investor, fund some invoices and walk your way to fame and fortune. Whether it’s a new factoring company or any startup, one of the easiest things to do is to create an excel spreadsheet with some basic assumptions and just double and triple income for the next few years. We recently had a recent startup visit our office looking for capital. Although they had been in business for less than a year I requested a set of projected financial statements including a profit and … [Read more...]
Red Flags of Factoring: When to Walk (or Run) Away From a Deal
“Time is money” is a cliché, but also a reality of the factoring industry. Unfortunately, all too often we waste time – and money – chasing prospects and shopping deals to any number of funders without identifying the fundamental issues that will doom a deal before you make the first pitch. Before you invest in any deal you must ask: will any rational funder make this work? Without delving into funder preferences and gray areas, there are five red flags you should look for in any factoring lead you come across: Medical deals with very low dollar amounts Medical factoring in particular is very time and effort intensive. While some medical factoring companies will at least take a look at very small deals, the majority will determine that … [Read more...]