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...]
Working Capital During the Credit Crunch
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There's no secret banks are putting the squeeze on business lending and credit lines. In fact 55% of small to midsize businesses surveyed by the National Small Business Association reported difficulty in obtaining credit last year. And that was in early 2008 before the credit crunch really hit. So where can business owners turn for working capital as banks say no to business financing? Here are three places to consider during the 2009 credit crunch: … [Read more...]