New clients, we all want them and we try everything in our power to find them. The internet along with social media has made it possible for almost anyone to get their message out to the masses at an extremely low cost. With an internet connection and a very small marketing budget you can create a web page, post content on Facebook, LinkedIn, YouTube and a variety of other outlets depending on your specific need or preference. Our position in the factoring business has always been to keep a lot of irons in the fire when it comes to marketing on the internet. As important it is to have a great website, it is just as important to create useful content to educate our audience about what we do and how our services can benefit their … [Read more...]
Peel Some Layers Back Before Funding Invoices
You’ve read the books, attended the training classes and finally have landed your first real prospect. They are eager to get started factoring their invoices and you can’t wait to get this deal closed. Whether you are working as a broker, business development officer or direct funder, this is the starting point where you will need to connect the dots to see if the deal will move forward or be declined. What Is The Business Trying To Achieve By Funding Invoices? Before the credit reports are generated, UCC-1(s) filed, or any other piece of due diligence is started, it is really important for you to understand what the prospect is trying to achieve by obtaining your services. Sure, we all know the easy answer is that the applicant is … [Read more...]
The Straight Truth About Invoice Factoring
Whenever you hear someone say they are going to give you the straight truth about a person or particular subject it usually isn’t good news. In a world where we are inundated with posts, tweets and instantaneous information it’s very easy to only get the information people want you to hear. When it comes to the factoring industry it’s very easy to get roped into thinking that it’s just about getting some capital, advance on receivables and make huge returns. What is the actual truth about the factoring industry? Anyone who works in this industry is entitled to their own opinion therefore, I will go on record and say that the views below are only mine based on my experiences as a broker, funder and due diligence coordinator. Truth #1 – … [Read more...]
Is This The Golden Age of Invoice Factoring?
It’s usually during this time of year where you will find a bunch of business articles that reflect upon the events of the past year or take a stab at making predictions for the next earnings period whether it be quarterly or annually. Instead of following suit and subjecting you to the same old topic I would rather take a look at... The present state of the factoring industry. When you hear the term “Golden Age” of something it typically represents a period of great peace, prosperity and happiness. Usually we think of periods of history in Greek and Roman mythology when civilizations thrived in the arts, literature and science. Obviously it sounds like a stretch to associate invoice factoring with the historic cultural periods of the … [Read more...]
The Blurred Lines of Factoring
Factoring is one of the oldest known business practices that date as far back as the Ancient Roman Empire when merchants would enlist the help of collectors to settle trade debts. The Definition of Invoice Factoring Factoring is generally defined as an arrangement whereby a factor purchases an account(s) receivable from a business at a discount to the face value of that receivable. The factor earns a fee based on the number of days that receivable remains unpaid. Effectively the business is no longer dependent on the conversion of the accounts receivable to cash from the actual payment from their customers which takes place on typical 30 to 90 day terms. Today, factoring is used more than all other types of business financing combined. … [Read more...]
The Sales vs. Underwriting Factoring Dilemma
I’ve written a bunch of articles about what to look for when funding a new client. Whether it’s proper notification or having an ironclad factoring agreement, you should always have a consistent set of due diligence procedures that adequately protects your company in every factoring transaction. With any new deal there will regularly be nuances that are unique and test the funder. In many cases getting past these roadblocks can make or break a deal. With any factoring company, one the biggest challenges is to scale the company for growth while keeping the proper safeguards in place. The friction caused by this dilemma is usually felt by the sales and underwriting divisions within a company. Salespeople complain that the underwriters … [Read more...]
The Factoring Company Waiting Game
Whether you’re in line at your local grocery store, sitting in a doctor’s office or just looking to grab a bite at your favorite restaurant, we all have to wait. In our modern world of instant text messaging, mega fast downloads and next day deliveries we’ve become a society that expects everything when we want it and the faster the better. The same is true in the factoring industry. How many websites (including yours truly) boast phrases like “Same Day Funding” or “Approvals in 24 Hours or Less”? Let’s face it, with almost any service provider, speed is king. The first question we usually get from new prospects is how long will it take for them to get funded. In most cases they expect to be funded in a few days or less. Brokers … [Read more...]
Relationships Matter to Success in the Factoring Industry
The famous French philosopher Voltaire once said, “The ladder of success must be set upon something solid before you can start to climb”. You can interpret this quote in a variety of ways and for me it really hits home when I look at our success in the factoring industry. We’ll get to that in a moment. The first question that always comes to mind when talking about success is how do you measure it? Talk to most folks and the answer is usually associated with the bottom line. Anyone that follows the financial markets knows what happens to a company’s stock price when they either beat or miss analysts’ expectations for a given period. Let’s face it, without profits companies cannot sustain their operations and continue to be a going … [Read more...]
Why Factoring Works
Working capital - Every business needs it but at what cost? One of the main reasons why I enjoy working in the factoring business is that the concept is simple and easy to understand. Factoring companies provide businesses with working capital by purchasing their client’s outstanding receivables. Typically a factoring transaction is an arrangement between three parties (client, factor and vendor) all of whom are businesses. The business owner understands his profit margins and the expense associated with factoring while the factor evaluates the risk. In most cases the increase in cash flow will not only justify the cost but actually lower operating margins by increasing sales for the business. But why is factoring so popular … [Read more...]
Is Invoice Factoring Right for All Businesses?
So many authors, including myself, have written about the benefits of invoice factoring explaining how we help businesses in need of working capital. Just type something like, “benefits of invoice factoring” into your favorite search engine and you will find pages of articles telling you how factoring works and why it is the best solution for your business. As the owner of a factoring company I can definitely say that factoring is an extremely useful tool to help businesses grow by unlocking cash in the form of an account receivable. But is factoring a one fit all tool for all businesses to achieve growth? As a featured speaker and panelist at small business workshops over the last several years, I’m fortunate to be given the … [Read more...]