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...]

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...]

Fighting An Uphill Battle In The Factoring Industry

Have you ever heard the saying that perception is reality? Although I’ve written tons of articles, spoken at numerous SBA and financing workshops while preaching the benefits of invoice factoring, I’m still amazed about how our industry is perceived in the finance industry. Those of you in the factoring industry know what I’m talking about. It’s the negative stigma associated with invoice factoring. So often I’ll be attending a networking event where a CPA will tell me that he consistently advises his clients to stay away from factoring and that they should only use it as a last resort if they need cash. Then there are the small business owners who don’t even know what invoice factoring is or how it can benefit their cash flow. Invoice … [Read more...]

Invoice Factors and Banks

One of the most common slogans you’ll see on any factoring company’s website is how they are better than most banks in getting businesses working capital. Conventional thinking is that banks qualify prospective clients based on the financial stability of the company whereas invoice factoring companies focus more on the credit worthiness of client’s customers. Therefore a prospect with little or no credit or one that has been in business for a short period of time can qualify for a factoring line assuming they have strong customers. For example, many banks will ask for several years of tax returns, financial statements and sufficient collateral to offset the loan. When dealing with the SBA, new companies will have to submit a business … [Read more...]

Should Your Factoring Company Also Offer Purchase Order Financing?

Recently, I have been writing articles about brokers who want to start factoring companies. As I have mentioned previously, the factoring field is very competitive, so you have to be highly selective when you choose your market niche. Some new factoring companies have taken this strategy a step further and differentiate themselves by adding niche products such as purchase order (PO) financing. This article discusses whether this is a good strategy. A brief purchase order financing tutorial Basically, purchase order financing helps companies that have a purchase order and need funding to fulfill it. In principle, the product sounds great. However, it has a number of restrictions. Specifically, it can be used only for transactions … [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...]

PayPal Offering Working Capital To Business Account Holders

Well-known for its online payment processing, PayPal™ is now venturing into the world of working capital funding for businesses. The new financing program is geared towards small business owners and publicized as an alternative to traditional bank loans. We have been using PayPal™ here at Factoring Investor to accept payments online in the Bookstore since we first started publishing our newsletter online in 2008. We are familiar with its ease of use and secure processing. The part that came as a surprise was their recent marketing email touting similar benefits to factoring invoices. Here is a quick excerpt: If you’ve been thinking about growing your business with PayPal™ Working Capital, we’re here to help. It’s easier funding for … [Read more...]

Five Reasons to Consider Factoring Your Invoices

Anyone that runs a business on a day-to-day basis understands the need for continual cash flow. It is the lifeblood of business. The natural ebb and flow of business income can make some weeks a [financial] breeze while others may have you questioning whether you can make payroll the following week. With banks continually tightening the belt, many savvy business owners are turning to alternative means when it comes to generating a consistent cash flow. Here are five reasons to consider Invoice Factoring as your legitimate solution: … [Read more...]

Common Objections Encountered From Invoice Factoring Prospects

Although invoice factoring has become a bit more apparent in business finance today, misunderstandings, fears and objections are still quite common. Being prepared to hear and address objections or questions is the most professional approach to these encounters. Fortunately, the issues discussed herein are the most common concerns expressed by prospects and from my experience in both commercial and healthcare factoring will arise in almost all presentations or conference calls. … [Read more...]