Every business needs capital to operate. There are a lot of small business bootstrapping it with personal savings, credit cards and loans from friends and family members. There’s nothing wrong with any of that, but at some point you will hit a limit. The problem is many businesses hit this limit and get stuck. They’ve tapped all of their resources and aren’t able to get a bank loan for one reason or another.
When a business owner considers the need for a loan, many times the initial thought process begins something like this: “I need money for ____. How much do I need? How fast do I need it? Can I qualify for the amount I need? Do I want to go through the process of finding out if I’m even approved, little less the time it takes to actually get the money? How much is it going to cost me?”
Small Business Factoring is an excellent tool for business owners, especially ones that are not yet qualifying for traditional bank financing. Small Business Factoring helps maintain cash flow for the general expenses of a start-up, funding for growth, and can also function as receivable management support for a company with a small staff.
Securing working capital can be a challenge for any size business, especially if the business is new or doesn’t have the cash or credit history to support a traditional bank loan or line of credit.
One of the first things to come to a business owners mind when hearing the word Factoring is cost and way too much of it. However, this isn’t necessarily the case. As a matter of fact, depending on how one views the situation, it may actually not be a cost at all. It is easy to always focus on cost and this is often the first question that is asked from a business owner to a Factor, “how much will this cost me?” When in reality this should not be the first question to ask; but “how can it benefit my business?”
It is important to look at the benefits of Factoring and how it can improve cash flow. Can the availability of cash actually allow for other cost savings? The overall scenario needs to be analyzed and a full understanding of why Factoring should be used needs to be thought over. There is not one single answer for all business owners as to why the cost of using a Factor is justified and actually beneficial. Just as companies have their own unique products and services, they also each have their own specific needs for cash and reasons for managing it in a particular way.
Factoring is used by large and small businesses across practically all industries today.The transportation industry is no exception to this. Trucking companies across the country use factoring to improve their cash flow and keep their trucks on the road.
“Cash is king.” You’ve heard this saying before because it’s true. While it may be overly simplistic, it has real practical implications, especially for small-to medium-size businesses. But what about expedience and convenience? Often it’s the combination of a cash injection and expedience that’s necessary to meet your business objectives. Waiting weeks for credit isn’t an option, and, spending significant time away from the business puts an additional strain on resources. Perhaps you’ve seen the Ford commercials in which Ford owners envision choosing between two good things, such as having a safe vehicle or a reliable vehicle but not both. At the end of the commercial, the actors determine that “and is better.” Obviously, they’re implying that you don’t have to choose between two good things if you buy their product and that you may very well not get everything if you purchase a competitor’s product. All humor aside, traditional business financing methods are often slow and tedious to secure, and factoring companies which don’t offer a full online solution simply aren’t providing the same convenience and expediency that you desire. Online factoring combines a great financial product with the speed and convenience afforded by online processing. Fast AR Funding’s online factoring doesn’t just provide cash, it also provides additional benefits that can make your business more productive and secure. If you’re concerned with the speed at which you can gain funding, then online factoring should be a serious consideration. If you’re not sure if it’s right for your business, then keep reading for some common business scenarios that may be applicable to your situation.
Receivables Factoring: Five Ways to Help your Business
When you’re running short on cash, what do you do? Sell hard, slash costs and run to the bank for a loan? Have you ever considered receivables factoring? Receivables factoring provides the same benefits as a traditional bank loan, plus so much more.