In our tenure in the commercial finance industry, we’ve come across two types of business owners:

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.

When it comes to commercial finance, you typically have limited options. One option is to tap your own finances and inject equity into the business. You could also look for an outside investor. This works well in the startup phase, but is often difficult as your business grows. This is where a loan from a bank or finance company comes into play.

Wow … I can’t believe that 2012 has almost come and gone. The thing that has stood out the most to me from a business perspective is how many companies continue to seek out small business funding. While it seems there’s some economic recovery, the one thing I can tell you is that banks are still holding a tight rein on small business funding. 

If you’re a small business that has struggled with cash flow because of slow collections on your invoices, you need to consider a factoring program. Factoring is a form of commercial cash flow funding or financing where you sell your company’s accounts receivables to a third party known as a factor.

The initial question in this blog asks, “Is cash flow financing the way to operate?” I really don’t know that there’s a right or wrong answer. Now before you skip over this blog thinking, “my business is in good shape, I really don’t need any sort of financing,” read on a little further.

As a business owner, you’re like the quarterback of a football team. The key to being a great business quarterback is the ability to be nimble and make the best play available. To do that, a business owner always needs access to cash. You have to constantly look down the field and make assessments of what you need to do to achieve your goals before you take action. You always strive to execute the action or play you believe has the highest probability of success. Scan the field constantly looking at your offense, look at your competition’s defense, play after play. In business it’s the same thing. You constantly need to evaluate:

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.

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?!?!

One of the biggest struggles that any business faces is managing cash flow. Even businesses that are profitable on paper can have difficulties finding the cash to pay a critical vendor or make payroll on Friday.