Did you glance twice at this title? Yes, we are actually going to give you three and a half reasons for why you should consider invoice funding to garner additional cash flow for your business. Most tip sheets available on the internet give you five, seven or even 10 great reasons why you should do something. When
it comes to factoring online there are so many reasons why it makes sense, but if you want the top few, make sure you skim through the ones below, especially the “third and a half” reason. This reason alone drives home the importance of accounts receivable factoring.

You’ve determined you’re going to use accounts receivable finance to unlock cash available in a business invoice or pool of invoices. So now, how do you ensure you choose the right factoring program for your company? Here are three simple steps to remove much of the hassle associated with making the wrong choice and going with the wrong firm.

You’ve decided you want to research the best factoring companies in order to improve cash flow in your business. The internet is a powerful research tool to gather information about any subject, but without some general guidelines it is very easy to get lost in the massive amount of information out there. At this point, if you’re looking for different types of factoring for your accounts receivable, you probably already know the basics about invoice factoring. So let’s turn to some critical points you need to dig into.

There are many reasons why it is important to have a stable capital base for operating your business. Stability offers safety in today’s volatile markets. Whether the source of your stable capital is equity investment by the owners/shareholders or whether you have some sort of commercial finance loan, the benefits of knowing you have money available at a moment’s notice gives you the flexibility you need as a business owner. 

The Situation

I’ve directly or indirectly participated in the financing of over 35 startup companies in the past dozen or so years and have provided cash flow advice to all of the CEOs of these businesses. Currently, there is a lot of focus on business formation and the need for the first $50,000 to $250,000 in seed funding, or angel financing, as it is commonly referred to in the investment world.

Have you found yourself in a pickle and just realized that you need cash today for a business operating expense such as payroll or an inventory purchase?  Or, is there a great deal to be made with a vendor to save your company money, if you are able to pay the vendor in the next week or so?  

Business owners often ask me to define factoring for them. I quickly explain it to them, but after doing so, I usually ask them why they need the cash. There is a lot to be gleaned from the responses I hear back. These responses determine if the company in question has a short-term cash flow need, or if a long-term gap in working capital is likely. 

It’s hard to believe we’re already almost through 2012! This year has flown by and thus far, 2012 seems to have been a year where small businesses have been stabilizing a bit. I say “a bit” because all the business owners I talk to still want and need additional capital to manage or grow their businesses. Many of them talk to me about alternatives to banks and financing a business because they know it is the field in which I work every day. Lucky me?!?!