Why the Future of Business Funding Lives Online

Posted by John Mauldin on Thu, Apr 25, 2013

Online Factoring Company

Wow…………………it seems like everything is being done online.  You can shop, play video games, pay bills, deposit checks, and even obtain loans.

It really seems like over the past ten years with advances in technology, everything is going more automated and web based.

This is great……especially if you own a small business and you’re constantly on the go.  At any given time you can access your bank account or if you need to take an advance say on your factoring line you can do it.

I mention that last piece, because that’s really the overall direction of my article is being able to handle your business funding online.  Yes believe it or not there are companies out there that have a complete online system.  Right down to the application process to the submitting of invoices, to the advancing of funds.  Online receivables financing could end up being the wave of the future. 

Small Business Factoring………… Online…....Yes it can be done!

If I’ve gone over your head a little bit, it certainly wasn’t intentional.  I just get a little excited when I think about easy and efficient business funding can be when it’s all automated online.

To start, if you’re wondering what factoring is, it is just simply where you sell your receivables relating to credit worthy customers to a third party known as a factoring company.

Advance rates vary, but are typically around 80%.  Once the invoice is paid, you get the remaining portion back less any applicable fees.

I bet your thinking…..wow……I have customers that pay in 30, 60, or even 90 days.  That really does put a cramp in my cash flow. 

Factoring is great because it bridges the gap between when you bill an invoice and collect the cash.  It’s really nice when it’s all done online.

Depending on the company you work with…………….you enter the invoice information in the system, maybe upload back and supporting documents (purchase orders, bills of lading……) and you’re done.

When you want an advance you just log into the website and enter how much you need.

If you constantly on the road, out in the field, or out in the warehouse, you have access to your account 24/7.

Why you Should Consider and Online Factoring Company………………

I know there are some of you business owners out there, that are always traveling, working early in the morning, way into the day and into the evening. 

Like I said, depending on the industry you’re either out in the warehouse or out in the field.  There are always all sorts of things to worry about when running business and trying to conduct your day-to-day operations:

  • Business development
  • Personnel
  • The product or service your business provides
  • Ensuring that you books and records are properly managed
  • Cash flow

At the end of the day, in order to successfully achieve a lot of what’s on that list, your company has to have adequate cash flow. 

With everything that has to get accomplished, this makes it difficult to get with your lender during regular business hours to set up your funding request.

Some Helpful Tips……..

There are a few things too that you can do to make the whole process even easier.  Here are some helpful tips for factoring invoices:

  • Factor all of your credit worthy receivables.  Yes….this may cost a little bit, but it’s a small price to pay to improve cash flow
  • When you need a little cash flow help, you may only look at factoring some of your receivables relating to your more credit worthy customers.  There’s a chance the more credit worthy customers pay faster.  That’s okay, because in the long run you’re minimizing your factoring costs while improving your cash flow.
  • Consider ending quick pay discounts.  Factoring gets the cash you need in hand. 

I’ve said before…..and I’ll say it again.  Cash is king.  You can’t successfully run your business without cash.  Now that you have access to working capital financing online, you have no excuse.

Tags: Cash Flow, Online Factoring, Factoring Company