New to Factoring?

For those who aren't familiar with factoring, it is basically a fast way to get cash to run your business.

Factoring is Not a Loan

When you send your customers an invoice, they usually have 30 days to pay you back. Factoring companies will give you the bulk of the cash up front, sometimes within 24 hours, and collect the payments from your customers themselves. Once the invoices are paid in full, you’ll get the balance left over, minus a small fee.


Factoring Doesn't Require Debt

Sounds simple enough – fast cash for your business – no loans, no debt.

So how do you go about choosing the best factoring company?

Not all of them are created equal. Not all of them will give you the same level of service you need to help grow your business.

Everyone claims they have the simplest rate structure in the industry, no long-term contracts, same day funding, no up-front fees, no monthly minimums or maximums, etc., etc., etc.

We also offer these same benefits, but we GO THE EXTRA MILE FOR YOU that other factoring companies don’t.

Here’s Why We Are The Factoring Company You Need For Your Business

No other factoring company matches our level of superior service and offerings.


As you can see, we simply have more to offer you.

Other factoring companies don’t even compare.
Dallas

And Not All Factoring Companies Can Say This:

More than half of our new business comes through client referrals.

Some of the benefits you receive with factoring are:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information for the city of Dallas

In its beginnings, Dallas relied on farming, neighboring Fort Worth's Stockyards, and its prime location on Native American trade routes to sustain itself. Dallas' key to growth came in 1873 with the building of multiple rail lines through the city. As Dallas grew and technology developed, cotton became its boon and by 1900 Dallas was the largest inland cotton market in the world, becoming a leader in cotton gin machinery manufacturing. By the early 1900s Dallas was a hub for economic activity all over the Southern United States and was selected in 1914 as the seat of the Eleventh Federal Reserve District. By 1925 Texas churned out more than ? of the nation's cotton crop, with 31% of Texas cotton produced within a 100 mile (160 km) radius of Dallas. In the 1930s petroleum was discovered east of Dallas near Kilgore, Texas.

 

Dallas' proximity to the discovery put it immediately at the center of the nation's petroleum market. Petroleum discoveries in the Permian Basin, the Panhandle, the Gulf Coast, and Oklahoma in the following years further solidified Dallas' position as the hub of the market.The end of World War II left Dallas seeded with a nexus of communications, engineering, and production talent by companies. Decades later, the telecommunications and information revolutions still drive a large portion of the local economy. The city is sometimes referred to as the heart of "Silicon Prairie" because of a high concentration of telecommunications companies in the region, the epicenter of which lies along the Telecom Corridor located in Richardson, a northern suburb of Dallas. The Corridor is home to more than 5,700 companies including.In the 1980s Dallas was a real estate hotbed, with the increasing metropolitan population bringing with it a demand for new housing and office space. Several of Downtown Dallas' largest buildings are the fruit of this boom, but over speculation and the savings and loan crisis prevented any further additions to Dallas' skyline.

 

Between the late 1980s and the early 2000s, central Dallas went through a slow period of growth and has only recently recovered. Since 2000, the real estate market in the Dallas Fort Worth metroplex has been relatively resilient. However, Dallas is among the largest cities in the U.S. where rent declined significantly. Whereas the national decline in rent is approximately 4%, Dallas rent declined an average of 8% in early 2010.Texas Instruments, a major manufacturer, employs 10,400 people at its corporate headquarters and chip plants in Dallas. Defense and aircraft manufacturing dominates the economy of nearby Fort Worth.The Dallas Fort Worth Metroplex has one of the largest concentrations of corporate headquarters for publicly traded companies in the United States. The city of Dallas has 12 Fortune 500 companies, and the DFW region as a whole has 20. In 2007 08, the world's largest breast cancer organization was founded and is headquartered in Dallas.In addition to its large number of businesses, Dallas has more shopping centers per capita than any other city in the United States and is also home to the second shopping center ever built in the United States, Highland Park Village, which opened in 1931.

 

Dallas is home of the two other major malls in North Texas, the Dallas Galleria and NorthPark Center, which is the 2nd largest mall in Texas. Both malls feature high end stores and are major tourist draws for the region.[]According to magazine's annual list of "The Richest People in America" published September 21, 2011, the city itself is now home to 17 billionaires, up from 14 in 2009. In 2009 (with 14 billionaires) the city placed 6th worldwide among cities with the most billionaires. The ranking does not even take into account the 8 billionaires who live in the neighboring city of Fort Worth. In 2013, also ranked Dallas No. 13 on its list of the Best Places for Business and Careers.Dallas is currently the third most popular destination for business travel in the United States, and the Dallas Convention Center is one of the largest and busiest convention centers in the country, at over 1,000,000 square feet (93,000 m2), and the world's single largest column free exhibit hall

 

 

Information for the state of Texas

Mineral resources compete with industry for primary economic importance in Texas. The state is the leading U.S. producer of oil, natural gas, and natural-gas liquids, despite recent production declines. It is also a major producer of helium, salt, sulfur, sodium sulfate, clays, gypsum, cement, and talc. Texas manufactures an enormous variety of products, including chemicals and chemical products, petroleum, food and food products, transportation equipment, machinery, and primary and fabricated metals. The development and manufacture of electronic equipment, such as computers, has in recent decades become one of the state's leading industries; the area around Dallas and Fort Worth has become known as "Silicon Prairie," a name now also extended to Austin and its suburbs.

 

Agriculturally, Texas is one of the most important states in the country. It easily leads the nation in producing cattle, cotton, and cottonseed. Texas also has more farms, farmland, sheep, and lambs than any other state. Principal crops are cotton lint, grains, sorghum, vegetables, citrus and other fruits, and rice; the greatest farm income is derived from cattle, cotton, dairy products, and greenhouse products. Hogs, wool, and mohair are also significant. Among other important Texas crops are melons, wheat, pecans, oats, and celery. Texas also has an important commercial fishing industry. Principal catches are shrimp, oysters, and menhaden

 

You are about to be relieved of the stress and time consuming process of collecting on your accounts receivable.  

Factoring is also known as Accounts Receivable Financing because factoring occurs when a business needs to access cash quickly, quicker than if it had to wait the 30 to 60 days (or longer) to receive payment from a customer. -Dallas Factoring Companies

 

 

CREATE YOUR VERY OWN FACTORING PROGRAM  

Dallas Factoring Companies Articles

"How a Factoring Company Saved This Owner of a Trucking Company Business"

 

Transportation industry plays a vital role in the economic scene. As people's lives become more and more sophisticated as time goes by, making the most out of the limited resources is the concern of all. Say for example the proper use of land to get optimum profit and convenience or what is known as the zoning. It is defined as the process of planning for land use to allocate certain kinds of structures in certain areas. This method separates the manufacturing sites from the sources of its raw materials, the employees and employers to their respective offices. This made the transportation industry play a vital role in the economic scene. It is a primary necessity for businesses of any size and of any type. It does not just transport raw materials to the manufacturers but also bring finished products into our every door.

 

Investing in a business which plays a vital role in the current economic scene is a thing that every investor should not think twice about. But business does not work that easy. The big question is, how you are going to survive the most challenging phase of establishing a business - the start. Starting a business requires a capital. If you now have enough money for capital, you can now start your business and since you are investing in a very promising type of business, finding customers is not a problem. The problem is, what if you found bad ones. Even if your customers are also managing a business and expecting cashflow, which does not guarantee that they would pay you up to date because some businesses are just ill-managed. For the business to survive, the most important thing that you would be doing is funding your operational cost - make payrolls, fuel, maintenance - it should rely on cashflow, but since things like mentioned above is very common, some business owners would resort for a loan. But that does not solve the problem of getting your receivables paid on time. As a business owner, you cannot afford the time it takes to collect the receivables, while trying to make your business grow.

 

Mr. Paul, an owner of a small trucking company experienced the same kinds of problems and shared how he managed to survive. "I just released my head from the stress of how am I going to get my receivables, and focused on making the business grow"¦"

 

Mr. Paul just got his retirement fee from a big trucking company for almost forty years and was thinking on how to double his money in the shortest time possible. Seeing a small trucking company as a business of great potential and is a business that he knows. When he was still driving a truck, he was fascinated by how much money the company is making. He has also never experienced a delay in his salary. When he decided to invest his retirement fee in establishing a small trucking company, everything was just according to what he expected. He started with a single truck from his home. He started with just a few clients, the ones he knew already and never missed one deadline and kept freight damage as minimal as possible. Because of his outstanding services he started to get referrals and had more work than he can handle. From then, he started to expand, bought more trucks, hired more personnel. Using the knowledge he acquired from the company that he had served for a very long time, and dedication to his work, his little business grew in a rate that he had never imagined. The business is now requiring a more strategic plan and when Mr. Paul thought that everything was going very well, he encountered problems that he failed to foresee.

 

He had customers that made him wait for weeks or even months before paying. Since his little business is rapidly growing, his operational cost is also growing . This is a problem that he never knew and never observed in his entire career as a driver of a trucking company since he was never in an administration role. He was at the verge of breaking down, his business is losing money, growing too fast, not big enough has to rely cashflow to keep up to his fast growing business. He had to make his payroll, pay his suppliers, maintenance and fill his orders. Mr. Paul thought of going to bank and apply for a loan but was denied. "Maybe because I had a bad personal credit...haha"

 

Mr. Paul thought of declaring bankruptcy because of the stress that he never imagined he will be handling. He had to think of how to manage his business and at the same time, how will he keep the business alive by thinking of a solution on how is he going to deal with his receivables.

 

"You know that time, I, I, I just don't know what to do... I felt that as the business kept growing and growing, I become more and more incompetent. Then suddenly, a hero came along... Just at the nick of time. "

 

Then a close friend of his introduced him to a factoring company and everything turned out just fine. So what is this factoring company then? What does it do? How did it save Mr. Paul's business?

 

Well, this is how it works, Mr. Paul sells his invoices or receivables to a factoring company at a discount and not in an amount where he can no longer make a profit. The factoring company will then be the one collecting the invoices of Mr. Paul's business from his customers. Say for example, Paul still has 100 dollars to collect from one of his customers. He then sells it to the factoring company at a lesser price, say 90 dollars. The factoring company will now be the one who is going to get the 100 dollars collectible from Paul's customer.

 

The factoring company immediately gave Mr. Paul the cashflow he needed. He now has instant customer credit checks. He can rest well and likes doing business with companies that pay their bills on time. Save him from the stress of thinking how to deal with his collectibles, thus saving time and money. He can now focus on growing his business and keeping his customers happy. Increase his sales and cashflow.

 

The Factoring Company not just saved Mr. Paul's start-up business but made it a big company now. It has helped Mr. Paul's business, why don't you let it help yours?

 

 

 

You are about to be relieved of the stress and time consuming process of collecting on your accounts receivable.

 

 

Dallas Factoring Companies Articles

Invoice Factoring: Helping Temp Staffing Agencies Grow

 

When a temp agency is experiencing a cash flow problem, they generally have two options: the first option is to apply to a bank or other lender for a business loan, and the second is to use Invoice Factoring. In this article we'll take a look at why Invoice Factoring may be the best option.

 

Many companies who bill their clients have discovered that Invoice Factoring is a very effective way of addressing cash flow issues, and this is also true for temp staffing agencies. Typically, temp agencies don't get paid by their clients until such time as their job vacancy has been filled and the employee hired has actually commenced work, which means that it's very common for temp agencies to experience cash flow problems.

 

Any advertising required to successfully place job candidates is paid for by the temp staffing agency, meaning that they're not able to invoice their client until they've found a suitable candidate and the candidate has actually started work. So, the temp staffing agency must wait to get paid.

 

Why Invoice Factoring Works Well for Temp Staffing Agencies

 

Temp staffing agencies are typically paid per hour, with the amount due being based on the number of hours their placement has worked. Of course, during this time they still have to pay their own bills, and these might include rent, payroll, advertising costs, utilities, and so on. So, it's easy to see that this can put a big strain on a temp agency's cash flow.

 

Many expenses incurred by a temp staffing agency can't be put off, so the agency must be able to access cash straight away: their employees need to be paid on time, as do their rent and utility bills. All businesses require office supplies, so money must be available to keep the business running smoothly. In addition, temp agencies must have money on hand for advertising job openings. For all of these reasons, it's not either feasible or practical for a temp staffing agency to apply for a business loan, then sit, wait, and hope to be approved.

 

These businesses need money and they need it now; and that's why Invoice Factoring may be the perfect solution to their cash flow problem.

 

Explaining Invoice Factoring

 

When a business makes the decision to use Invoice Factoring in order to generate cash, their cash-flow problem can be resolved almost immediately. In many cases, the business can secure up to 92% of the value of their invoice within 24 hours! A word of caution though: if this is the first time the temp agency has worked with a factor it could take longer - somewhere between four and seven days.

 

Any temp staffing agency that's experiencing a cash flow crisis, or even agencies that only occasionally experience cash flow problems, should do as much research as they can to learn about factoring and how it might help their business grow. With this knowledge they can then consider Invoice Factoring as and when the need arises. Factoring really is the perfect way for a business to access cash money when it's most needed. In many cases, once a relationship has been established with the factor, the money will be delivered within 24 hours.

 

Cash When You Need It!

 

Of course one of the major bonuses of invoice factoring is that temp staffing agencies no longer need to worry about whether they will or won't qualify for a bank loan, because factoring will take care of their cash flow crisis. All they need to do is provide their chosen factor with the invoices they wish to sell, complete with the time-sheets for each employee, and the cash that's due and payable to them can be deposited into their bank account within 24 hours. Now, temp agencies will have no problems meeting their monthly obligations, and best of all, there'll be no need to take on new debt.

 

 

 

 

 

 

Dallas Factoring Companies Articles

Business Is Great, but Our Company's Cash-Strapped!

 

There comes a time in the life of most businesses when cash flow becomes a problem, and it's not just during difficult times that this occurs. There are so many different reasons why businesses may need an injection of cash, like sudden growth, or perhaps wanting to purchase new equipment or service bigger clients. Every business at one time or another will require urgent funding to sustain or grow their business.According to research, many small and medium-sized businesses are failing, certainly not due to lack of sales, but solely because they're unable to meet their short-term financial obligations. Considering the time, money, and personal investment that goes into the creation of every business, the failure of a business to thrive has become a heartbreaking reality for many people. Why would a profitable and growing business find itself in financial trouble? The answer is very simple. When just one or more of your larger accounts hold off on paying their accounts for perhaps an additional 60 or 90 days, you've now got a cash flow problem.

 

Running Out of Funding Options?

 

When experiencing cash flow problems, business people typically depend on conventional lending sources for a corporate line-of-credit, and many find themselves applying for short-term bridging finance. And how many business owners admit to using their personal credit card to pay for business-related expenses? However, there are times when traditional methods of funding are no longer available, leaving the acquisition of extended financing a frustrating and sometimes impossible task.

 

Fortunately, there's a viable alternative today, one which has been around for a long time but one that many businesses are not fully aware of. There's now a way for businesses to avoid cash flow problems and continue growing their business from strength to strength, even during difficult times. Factoring, also known as Accounts Receivable Financing, Asset Based Lending (and various other terms) is an alternative form of financing, designed to help businesses through periods of expansion and business growth. Factoring has quickly become a very practical and workable financial solution for many businesses, and more and more we're seeing businesses from different industries look towards factoring to resolve their cash flow problems.

 

How Does Freight Factoring Work for Trucking Companies?

 

Basically, a business with creditworthy accounts receivables can use factoring to receive an immediate injection of cash on those receivables. Factoring companies will typically say yes when a bank says no, thus providing a business with a much-needed cash injection. The process of factoring is actually quite simple. Your trucking company needs cash, and because you have quality accounts receivables your chosen factoring company will purchase any number of those receivables and immediately provide you with cash - anywhere up to 90% of the value of your invoices. Once your customer has paid the factoring company the total amount of your invoice, the remaining balance will be forwarded to you - less the agreed-upon fees.

 

A good factoring company will respond quickly to its trucking company clients and provide them with personalized and professional attention. With freight bill factoring, a trucking company will always have its cash needs satisfied with cash flow. It may be true that, when compared to other means of lending, factoring is more expensive, but borrowers report that the benefits they receive far outweigh the cost.

 

Freight Bill Factoring Is Not A Loan

 

Perhaps the greatest advantage of invoice factoring is the fast turnaround time because, unlike banks, there's no loan approval process with factoring. This means that business owners of trucking companies can receive cash in-hand on the same working day! In order to be approved for freight factoring a trucking company must have creditworthy customers and have a good reputation; however, once approved for freight factoring the process of receiving funding is quite automatic. Cash advances will be made on the same day, and it's important to note here that future financing is only limited by the value and number of receivables involved.

 

Freight Bill Factoring Is Very Popular with Trucking Companies

 

In the last decade many trucking companies have taking advantage of freight factoring, mostly because it's a great alternative to bank financing. In fact, freight factoring is often recommended by trucking companies financial advisers or accountants. We know of many cases where freight bill factoring is solely responsible for trucking companies being able to accept and process orders from customers that otherwise would have declined due to a lack of financing. Freight bill factoring has saved many companies from severe financial crisis, and even bankruptcy.

 

It's now very clear that freight bill factoring is playing a very important role in today's business environment. This type of financing allows trucking companies to increase loads, expand their customer base, and even survive a seasonal slump. The truth is that freight bill factoring works, and it works well!

 

 

 

 

Dallas Factoring Companies Articles

Everything You Need to Know about Invoice Factoring

 

You've probably heard about invoice factoring, but like many business owners you may not be entirely sure how it works or whether it could help your own business. In this article we'll try to answer all your questions about what invoice factoring is, how it works, and whether it could help you grow your business.The following definition of invoice factoring may sound too good to be true, but let's look anyway! "Invoice factoring is a viable alternative to bank financing and other traditional types of financing, but it's not a debt, and there are no strings attached." For anyone who's approached traditional lending sources for financing and been refused or left hanging for weeks or months, yes, this probably does sound too good to be true, but it's actually not! Invoice factoring can provide the working capital you need to help your business grow and prosper, so read on then decide for yourself.

 

How Invoice Factoring Works

 

With invoice factoring you no longer need to wait 60, 90, or even 120 days to receive payment from your customers, because invoice factoring converts these invoices into immediate cash in-hand. It's up to you to determine which invoices, and how many invoices, you wish to factor, following this simple process -

 

- Once you've been accepted for invoice factoring by your factoring company, you can begin submitting your unpaid invoices. These invoices must be for products that have been delivered or work that's been completed. The process to follow is to fax or email a copy of the invoice directly to the factor, while at the same time invoicing your customer as usual.- Within 24 hours you'll receive a cash advance from your factoring company. Your invoices will be verified by the factor and you'll receive a cash advance of up to 95% of the invoice, which will be paid directly into your bank account.- Now that you've received this cash advance, you continue on with your work while the factoring company works to collect on the invoice on your behalf. Your factor will be highly experienced in collecting on invoices, thus allowing you to do what you do best, which is to continue providing excellent customer service and focusing on other important aspects of growing your business.- It's entirely up to you how many invoices you factor and how many clients you choose for the factoring process. You may decide to factor all your invoices, or it may be that you have one client that's always late in paying and you'd prefer the factoring company to only collect on that one invoice. It's your decision!

 

The Benefits of Invoice Factoring

 

The major benefit of invoice factoring is that, as the business owner, you're controlling your cash flow. Of course, there are other advantages of using a factoring company which can help your business grow and prosper.

 

No. 1: Your Factoring Company Will Provide Background and Credit Verification

 

It's very important to the viability of your business that you work with reliable customers in fact, it's the only way to turn your sales into revenues and to develop a solid payment history. But, we all know just how expensive it can be to run background and credit checks, and this simple exercise can dig deep into your working capital.

 

No problem! These checks will be provided to you by your invoice factoring company at no additional charge to you, which will provide reassurance that you are in fact working with quality customers. It also means that any issues that may arise can be addressed before they negatively affect your company.

 

No. 2: Your Factoring Company Can Assist with Credit Building and Repair

 

Perhaps your business credit is not ideal, but the good news is that you could still qualify for an invoice factoring program. The benefit of invoice factoring for a business with less-than-perfect credit is that, not only will you have available cash to meet your daily operating costs, you'll also be able to rebuild your credit rating by paying down current debt. Factoring companies are also well-equipped to assist start-ups, so if you're just getting your business up-and-running, invoice factoring is the perfect way to maintain regular cash flow.

 

No. 3: Invoice Factoring Opens Your Business to Great Money-Saving Opportunities

 

With invoice factoring, your business can utilize this rejuvenated cash flow to not only save money by offering competitive rates, but you'll now be able to negotiate early pay discounts and other incentives with your suppliers. And, depending on how many invoices you decide to factor, you could eventually qualify for a reduction in rates by receiving a volume discount.

 

No. 4: Invoice Factoring Provides Steady Cash Flow

 

In order for any business to grow and prosper it's vitally important to have a steady cash flow. And that's the beauty of invoice factoring: instead of late-paying customers controlling cash flow, the business owner regains control of the working capital. Perhaps you're simply tired of waiting for invoices to be paid, or maybe you're in an industry with seasonal fluctuations; whatever the reason you're struggling with cash flow, invoice factoring can help you regulate and take control of your business once again.

 

No. 5: Invoice Factoring Allows You to Dream Big Again!

 

Having a steady business is one thing, but having a growing business is what every business owner dreams of. Now that you've been accepted for invoice factoring and you have a steady cash flow, there are many ways you can use this cash to grow your business.

 

- You can increase your marketing efforts and get your name out there;

 

- You can negotiate bigger and better contracts with bigger clients;

 

- You can invest in technology upgrades;

 

- You can employ experienced personnel, or provide training programs for existing staff;

 

- You can upgrade or replace outdated equipment; and

 

- You can relocate your business or invest in expansion.

 

No. 6: Invoice Factoring Is Not a Debt to Your Business

 

It's very important to note that invoice factoring is not a debt, so there will be no more debt added to your balance sheet. In fact, it's exactly the opposite, because invoice factoring provides cash in-hand, so you can pay off old debts. The money is already yours, so there's no money to pay back or interest to add on. All invoice factoring does is get money that's owed to you into your bank account - faster.

 

I've Never Heard of Invoice Factoring

 

 

Many businesses know very little, or nothing at all, about invoice factoring, which is strange because invoice factoring is certainly not new. Perhaps it's because we typically think of bank loans and other traditional types of lending when looking to grow our business; however, factoring goes right back to the Roman Empire. Back then, businessmen, particularly farmers, used factors to grow their business, and in more modern times factoring was used to finance transactions in the clothing and textile industry, helping businesses accept larger purchase orders and pay for raw materials. Today, invoice factoring is used by almost every industry you can think of, like -- Construction

 

- Transportation

 

- Medical

 

- Staffing, HR

 

- Consulting

 

- Engineering

 

- Media and Marketing.

 

Understanding the Language of Invoice Factoring

 

Invoice factoring does appear to have its own language, so let's clarify some of the terminology -

 

- Your customers are known as Account Debtors.

 

- The report showing the total amount of unpaid receivables in addition to the amount of time they've remained unpaid is known as an Accounts Receivable Ageing Report.

 

- The two terms Invoice Factoring and Accounts Receivable Factoring can be used interchangeably because they mean the same thing.

 

- The percentage of the invoice charged by the factor as a fee for advancing funds is known as the Discount Rate.

 

- When your factor conducts background research to assess potential customers this is known as Due Diligence.

 

- The cash that's advanced to the business, typically within 24 hours and usually ranging between 80% and 95% of the total invoice amount, is known as the Factoring Advance Rate.

 

- The third party who connects a business with the right factoring company, to meet their business goals and needs is known as a Factoring Broker.

 

- The right to maintain possession of property until such time as a debt has been discharged is known as a Lien.

 

- It can occur that a customer fails to pay their invoice on time, or they may never pay their invoice. Non-Recourse Funding is where the factor assumes full responsibility for funds lost. Because the factoring company accepts this responsibility, non-recourse funding is therefore more expensive.- With Recourse Funding, your business will be required to buy back the receivables if your client fails to pay within the agreed-upon terms.

 

- The amount of money withheld by the factor until full payment has been received from your customer is known as the Reserve.

 

- Staffing companies may choose to enter a one-time agreement in order to factor a single invoice. This is known as Spot Factoring.

 

How Does Invoice Factoring Affect Your Customers?

 

It's important to point out here that your factoring company is not a collection agency and that factoring is not a bad thing. The aim of your factoring company is to maintain a good working relationship with both you and your customers, which means that your customers will receive great customer service. Both you and your factoring company have one common goal, and that is to ensure the payment process of your invoices is as seamless as possible. See below for how factoring typically works -

 

- You've decided to start factoring, so the first step is for your Account Manager to verify with your debtors that they are indeed your customers and to inform them of a change of address for remittances.

 

- Your customers must pay their invoices anyway, so a change of remittance address should not affect them in any way.

 

- Your account manager is a professional when it comes to collecting on invoices, so they will simply advise your clients that they will be managing your invoices in future and taking over your accounts receivable.

 

- And that's all there is to it! Nothing should change between you and your customers. They'll still receive an invoice from you; but their payment will now be sent to a new Post Office box. Your Account Manager will always be on hand to resolve any issues that may arise.

 

How Do I Choose the Right Invoice Factoring Company for My Business?

 

When you start looking for factoring companies you'll discover that there are many different companies out there, but they're certainly not all the same.

 

When making comparisons we suggest you consider the following points -

 

1: Factoring Fees

 

It's true that factoring fees can be more expensive than traditional bank loans, but sometimes the decision businesses are faced with is to simply have access to some working capital or have no working capital at all. What should you be aware of? You need to know the overall factoring cost, in addition to any smaller (or hidden) fees your factor may charge. These fees might include -

 

- Account Setup Fees

 

- Application Costs

 

- Credit Reports

 

- Costs to Research Liens

 

- Money Transfer Fees, or

 

- Last-Minute Funding.

 

Choose a factor that you believe you can trust and one that you feel completely comfortable with; because you're also looking for great customer service. Remember also that factors may charge for different things, and there may be hidden fees.

 

2: You Need Flexibility, so Carefully Check Your Proposed Contract

 

It's very important that you carefully read the fine print of your contract, prior to signing on the dotted line. It would be so disappointing to sign a factoring contract only to realize that you didn't completely understand the terms and now you're locked into a contract that's not clear on how the factoring company charges or how many invoices you can factor per month - or even worse - that you're now legally bound to this factoring company for the long term. Yes, long-term factoring contracts do exist, but be prepared to pay a lot of money if you try and break the contract. Make sure you know exactly how long you're signing up for, which of your clients are eligible for factoring, and how much per month you can factor.

 

3: With Invoice Factoring, Communication Is Key

 

Great customer service is very important with any business, and the most important part of great customer service is good and easy communication. And now we're talking about dealing with a company that's handling your money, so you can see how important good communication is! The last thing you need from a factoring company who's handling your money is being forced to wait for days for someone to respond to your phone call or email communication. Any factoring company you talk to is going to say their communication and customer service is really great - but be very cautious. How well did your potential factoring company respond to your initial queries? Then ask yourself: is that how you'd want them to deal with your customers? Remember there are plenty of factoring companies out there, so if the answer to these questions is not an unequivocal ‘yes', then find someone else.

 

4: Look for a Factoring Company That Has Industry Expertise

 

Yes, there are factoring companies out there that cover general factoring, but ideally, you'll choose someone who specializes in your own industry; someone who has a good working knowledge of the type of business you're running. Once you start looking for the right factoring company for your business you'll see that there are many factoring companies that specialize in specific industries, which means they already know a lot about your business model. And, if they have a lot of expertise, they'll probably be able to offer specific programs that relate to your industry, like fuel cards, or back-office support. These little extras can be just what you need when deciding whether or not to factor your invoices.

 

 

 

 

 

Dallas Factoring Companies Articles

Important Points to Remember When Choosing Your Factoring Company

 

Now that you've decided that factoring would be a solid business decision for your company, the next step is to find the perfect factoring company for you. Once you start looking you'll discover that there are many factoring companies (or 'factors') in the marketplace, and this is the perfect situation for you as a potential factoring client.

 

But it can also be confusing, because now you have to find the right factoring company to suit your business's needs. To assist you in making the right decision we've listed below the main issues that should be considered when choosing a factoring company.

 

Factoring Fees and Terms

 

Before making your final decision and entering into a factoring agreement, check out the fees applicable and the terms of the contract. Both of these can vary a lot, depending on the factoring company and the industry it's serving. When you start your research you'll discover that some factoring companies charge a flat fee: this fee is, in effect, a certain percentage of the total value of the customer invoices you sell to them; whilst others have additional charges to cover the general costs of doing business - such as, money transfers, shipping, collateral, and so on.

 

Ensure that the factoring company you're considering working with is transparent and upfront with you about its fee structure. In addition, you may want to consider a long term contract with your factoring company if it includes flexible rates or a price break. If you're receiving competitive offers from other factoring companies or you have increased factoring volume, you'll discover that many factoring companies will be prepared to adjust their rates. A one year contract is the industry standard for most factoring agreements. Generally, unless you give your factor a 60 or 90 day notice, your factoring contract will automatically renew.

 

What's the Difference between Recourse and Non Recourse Factoring?

 

It's important that you understand the difference between recourse and non recourse factoring prior to choosing your factoring company, because you need to know what the best fit would be for your company and your customers. So, with non recourse factoring, all of the credit risks for the collection of the invoice belong to the factoring company; while recourse factoring means that, with you being the client, you'll ultimately be responsible if the factoring company is unable to collect payment on your customers' invoices.

 

There are benefits to recourse factoring, and perhaps the main benefit is that it's less expensive than non recourse factoring. If you have a recourse agreement and the customer defaults on payment, it doesn't automatically mean that you'll be asked to settle the debt out of pocket. Generally, what happens is that the factor will hold back a portion of either future cash advances or payments being held in reserve, with the money being placed in an escrow account awaiting settlement of the debt.

 

Our suggestion is that you find a factoring company that offers both recourse and non recourse factoring, because not all of your customers will be good candidates for recourse factoring. An experienced factoring company working with a strong credit team can also behelpful in ensuring you're working with good customers: this will relieve some of the pressure of being stuck with bad debt.

 

Experience and Capital: The Two PreRequisites

 

Your company should be looking for a factoring company with experience in your industry, including the capital structure to fund your business as it continues to grow. Once you start researching factoring companies you'll discover that there are a lot to choose from; however, many of these are recent start ups with limited experience. Prior to signing any factoring agreement, do your research and look into the history and background of the factoring company concerned, especially its ability to provide financial services in your area of expertise.

 

The idea with factoring is that, as your company grows, the funding of your customer invoices will grow with you.Research the factoring company's client base and their capital structure. What's a typical account size? What's the factoring volume of their largest client? Is the factoring company limited to how many debtors it can handle? In general, factoring companies that have been serving your industry for many years will usually be able to offer your business the best deal.

 

Additional Factoring Services

 

There are many more benefits to factoring than simply increasing your company's cash flow. Because the factoring company will be handling the collection of your customer's invoices, your company will be saving time and resources. A good factoring company will also be able to evaluate companies in your industry and provide credit information. In short, your factor will ensure that you experience excellent customer service. You'll be matched with your own representative who'll be able to address any questions or concerns you may have about your factoring account.

 

So, when researching factoring companies, look for a factor who not only offers additional products but provides a high level of customer service that will help your business grow by assisting you in making smart business decisions.

 

 

 

 

 

Dallas Factoring Companies Articles

Growing Your Trucking Company Just Got a Whole Lot Easier

 

There's a lot of hard work and dedication involved in growing a successful trucking business, but perhaps above everything else a disciplined approach to making the right decisions and taking the right actions is required. The aim of this post is to help both small fleet owners and owner-operators accomplish these goals.

 

The three key steps to building your trucking business are to grow your fleet, find profitable shippers and loads, and the successful day-to-day running of your trucking company.

 

The 1st Step: Growing Your Fleet

 

You won't be able to grow your trucking company unless you have the right equipment. But, securing finance to purchase this equipment can be very difficult, and this is where many truckers run into trouble. Today, there are several financing options for owner operators of trucking companies, and even those with less-than-stellar credit are typically able to achieve some sort of financing.

 

There are two more-commonly used financing options - the trucking company either leases a truck or it gets a loan to purchase a truck. There are various ways of structuring leases and loans, and each option has its disadvantages and advantages. Your final decision will be determined by its merits, your objectives, and your available resources.

 

We strongly urge you to consult with a CPA with expertise in trucking when considering financing. It's true that a visit to a CPA could cost around $150, but not only will they help you determine your best option, they could also save you a lot of money in taxes. In fact, it's critical that you seek a CPA's advice if you're planning on growing your fleet. This is not an expense you should try to avoid.

 

The 2nd Step: Finding Profitable Shippers and Loads

 

Possibly the hardest part of running a trucking company is finding quality shippers and loads. Many owner-operators use a loadboard to find loads, and this approach does have its advantages. Perhaps the main advantage is that the loadboard allows you to match your equipment and preferred routes with loads. Unfortunately, though, loadboards are not financially worthwhile for truckers in the long term. To start with, loadboards are highly competitive, particularly for the most popular routes, which means you'll be forced to charge low per-mile rates. Now the trucking company must become very vigilant and ensure the load they're pulling will end up being profitable. The second reason using a loadboard is not viable in the long term is that your company doesn't get to grow relationships with shippers. This means you'll always be working with new customers, which can be a time-consuming process.

 

The best strategy for owner operators is to only use a loadboard as a starting point, but persist with making sales calls so that eventually you'll start building relationships with direct shippers. Statistics show that trucking companies with shipping relationships are earning approximately $20,000 per truck/per month; whereas trucking companies who rely on loadboards are earning approximately $10,000 per truck/per month. That's a big difference! As you can see from these figures, building good and lasting relationships with shippers can double your revenue. Therefore, the best way to grow your trucking business is to develop solid relationships with shippers.

 

The 3rd Step: The Day-To-Day Running of Your Trucking Company

 

All too often we see small fleet owners and owner-operators struggling with the day-to-day running of their trucking company. There's a lot of paperwork and related coordination that's involved in moving loads and running a trucking office can be very exacting and tedious. But, it's a necessary task and it's an important one.

 

If you're determined to grow your trucking company, it's critical that you employ both time-saving and money-saving processes. Managing a small trucking fleet is entirely different to managing a single truck operation. We strongly suggest you approach experienced truckers for advice and, providing you're not in competition with them, you'll generally find that small fleet owners are more than happy to share their expertise with you.

 

Managing Cash Flow

 

Managing cash flow can be a serious issue for trucking companies. It's fairly common for new truckers to experience cash flow problems when they first get into the trucking business, and the reason for this is very simple. Cash flow problems occur because most shippers settle their accounts in 30 days, 60 days, and some even wait 90 days. In the meantime, however, you've got your drivers to pay, fuel to purchase, machinery to repair, payroll to meet, and other necessities to take care of. The delay in receiving payments due to you can cause serious problems for any business that doesn't have a large cash reserve. Simply speaking, you run out of money, and without money your company will be stuck. Until such time as your shippers pay your invoices there'll be no more loads, no mechanical repairs, no meeting payroll, and so on.

 

How to Resolve Your Cash Flow Problems

 

Fortunately, there's a very simple answer to the question of cash flow problems. Today, many trucking companies are resolving their cash flow issues by factoring their freight bills. Freight factoring has become a popular way of financing new trucking companies because factoring provides trucking companies with an advance on their slow paying invoices. The result - no more cash flow problems! Now, instead of having to wait 30, 60, even 90 days to get paid, you'll be paid by the factoring company once the load has been delivered.

 

Receiving upfront payment on invoices gives trucking companies the money they so desperately need to cover the day-to-day running costs of their business, with money left over to grow their business. You'll also find that fuel advances are often offered by many factoring companies. This is an add-on feature which provides the trucking company with funding when they collect a load. These funds come in very handy for paying fuel costs and other delivery expenses.

 

 

 

 

 

Dallas Factoring Companies Articles

Invoice Factoring; The Best Way to Grow a Temp Staffing Agency

 

When temp agencies are struggling with cash flow problems they typically have two options; the first option is to apply for a business loan from a bank or other lender and hope they achieve a favorable result. Their second option is to use invoice factoring, so in this post we're going to discuss why invoice factoring could be their best choice.

 

Many businesses in many varied industries are discovering that invoice factoring is the ideal way of addressing cash flow issues, and this is also true for temp staffing agencies. In fact, it may be even more true for temp staffing agencies because these agencies don't receive payment from clients until such time as their job vacancy has been filled and the selected applicant has completed a period of work. It's not surprising, then, that temp staffing agencies often struggle with cash flow issues!

 

How Factoring Can Help Temp Staffing Agencies With Cash Flow

 

Temp staffing agencies are required to use their own finances to pay for the necessary advertising in order to place their job candidates. The client is only invoiced once the temp agency has located the perfect applicant and that person has actually worked, which can involve a long period of time before being paid. And when they are paid, they're often paid on a per-hour basis, determined by the number of hours the successful applicant has worked. In the meantime, the temp staffing agency still has its own financial obligations, like rent, payroll, advertising costs, office supplies, and so on. All these expenses must be paid by their due date, which can place an agency in a short-term (sometimes long-term) financial crisis.

 

Temp Staffing Agencies Must Meet Their Own Financial Responsibilities

 

Like any other business, temp staffing agencies can't postpone their own financial obligations, so they need access to money. Rent must be paid, utilities must be paid, and their employees need to be paid on a regular basis. All business offices require supplies and money must be available to advertise job openings, so it's understandable that waiting to be approved for a bank loan may not be a practical or even feasible option. These temp staffing agencies need access to money, and the sooner the better. That's why we suggest that invoice factoring may be the ideal solution for resolving a temp staffing agency's cash flow problem.

 

How Factoring Works for Temp Staffing Agencies

 

When any business decides to negotiate an invoice factoring program to generate instant cash, the business may, in many cases, secure up to 92% of the total value of their invoices within 24 hours! Note that if this is the first time the temp staffing agency has worked with a factor it could take between four and seven days to establish a factoring program. Either way, the agency's cash flow problems will be over, and they can proceed to conduct and grow their business.

 

Many temp staffing agencies are affected by cash flow problems, sometimes only occasionally, but we strongly suggest all agencies learn about factoring and how it works, just in case the need for immediate cash should arise. Invoice factoring has become a very popular financing option for many businesses, particularly those who need an urgent cash injection. Most times, money will be advanced within 24 hours once the agency has established a relationship with a factoring company.

 

Invoice Factoring is NOT a Loan!

 

Another bonus of invoice factoring is that it's not a loan. Basically, all the temp staffing agency is doing is accessing money that's already owed and payable to them. Factoring simply provides a means for the agency to access this money when it's most needed

 

Now, temp staffing agencies don't need to approach banks and other traditional lending authorities, hoping and praying they qualify for a loan. All that's required is for the agency to provide the factoring company with copies of the invoices they wish to sell, together with time sheets for each employee. Then, within 24 hours the agency will receive a cash deposit into their bank account. No more cash crisis! The temp staffing agency will now have funds to meet their regular financial obligations without the need to take on any further debt.

 

 

 

 

 

Dallas Factoring Companies Articles

Questions You Need to Ask Your Factoring Company

 

In today's marketplace we're seeing more and more factoring companies, and factoring fees, rates and agreement terms have become very competitive. This means that, as a potential factoring customer, this competitiveness should work to your advantage. However, there are some issues you must consider when choosing a factoring company to suit your specific requirements.

 

Before entering into any factoring agreement, here are some important questions you should ask -

 

What Are Your Terms?

 

As a factoring customer, you'll be looking for as much flexibility in your factoring agreement as possible. It may be that you choose a long term contract with your factoring company if it includes flexible rates or a price break. In today's competitive market, many factoring companies are agreeing to adjust their rates based on competitive offers from other factors or increased factoring volume.

 

The majority of factoring agreements are a one year contract, which appears to be industry standard, and this contract will renew automatically unless you provide the factoring company either 60 or 90 days notice.

 

What's Your Fee Structure?

 

The fee structure may vary depending on both the factoring company involved and your industry. Some factoring companies charge a flat fee, which is calculated as a percentage of the total value of the invoice. On the other hand, other factoring companies charge additional fees to cover costs associated with doing business, such as money transfers, software, and so on. Ensure that the factoring company you're considering working with is completely upfront and transparent with you about its terms and fees.

 

Are You Able to Offer Both Recourse and Non Recourse Factoring?

 

Recourse factoring:

 

Recourse factoring is less expensive than non recourse factoring. With recourse factoring, you (being the client) are ultimately responsible if the factoring company is unable to collect on your customers' invoices. However, you're not necessarily required to pay the debt out of pocket if you have a recourse agreement and the customer defaults on payment. It may be that the factoring company will withhold a portion of future cash payments or payments held in reserve, with the money being placed in an escrow account until such time as the debt has been paid.

 

Non recourse factoring:

 

When you have a non recourse factoring agreement, the credit risk for the collection of customers' invoices lies with the factoring company.Therefore, we believe it's to your advantage to use a factoring company that offers both recourse and non recourse factoring, simply because you may find that some of your customers are more suitable for recourse factoring than others. In addition, you need a factoring company with a strong credit team because they can work with you to ensure you're dealing with good customers: to a certain degree this will relieve some of the pressure of being responsible for bad debt.

 

How Long Has the Factoring Company Been in Business?

 

With the marketplace becoming increasingly competitive, today we're seeing the creation of more and more factoring companies. However, many of these companies are recent start ups, with limited industry experience. Make sure you research the factoring company's history prior to entering into any factoring agreement: also research its background into providing financial services in your specific industry.

 

Do You Have the Capital to Grow with Me?

 

The fact that there's no limit to the level of financing is the major advantage factoring has over traditional bank lending. As your company continues to grow, so too should the funding of invoices grow with you. Do your research and learn as much as possible about your potential factoring company's client base and their capital structure.

 

Does this factoring company have a limit to the number of debtors it takes on? What's a typical account size? What's the factoring volume of their largest client? You'll probably find that factoring companies who have been serving your industry for many years will have greater capacity to finance your company as it continues to grow.

 

Is There Anything Else You Can Do for Me?

 

Obviously, factoring is more expensive than a conventional bank loan, and this is partly due to the back office services that your factoring company is able to provide. Besides collections and financing, many factoring companies will evaluate companies in your industry and provide credit information. Therefore, when looking for a factoring company for your business, make sure the one you choose offers additional services and products that can assist you in making good business decisions.

 

How Do We Start Factoring?

 

Fortunately, factoring companies are not unduly concerned about your balance sheet before they decide to work with you, unlike banks. However, they do have a process to follow when selecting new clients, so be sure you understand what the factoring company is looking for when it's considering you as a client. Are they looking at your credit ratings and/or your customers' payment histories?

 

Are they looking at your personal credit score?

 

In many cases a company will start factoring because it's looking for a quick injection of cash, so you need to know how many days the factoring company will take to review and process your application.

 

 

 

 

 

Dallas Factoring Companies Articles

The Basics of Invoice Factoring: Choosing a Factoring Company

 

Probably the biggest frustration for business to business (B2B) companies is waiting to get paid.Anyone involved in a seasonal business, long payment cycle, or lumpy cash flow will be able to relate to this statement. Some customers are very slow payers (of course corporate clients and governments come to mind!) and other customers demand generous terms.

 

Explaining Invoice Factoring

 

Basically, with invoice factoring your current but unpaid invoices are turned into cash - it's a financing solution for businesses. Other terms used for factoring are 'Accounts Receivable Financing', 'Invoice Financing 'and 'Receivables Financing'. Because many clients demand generous terms, it means that invoices can remain unpaid for anywhere between 30 and 90 days; while in the meantime you're left without cash and falling behind on important expenses, such as payroll, and missing opportunities to grow your business. And this is where factoring comes in: factoring reduces, and sometimes eliminates the frustration of unpaid accounts.

 

A receivable financing transaction usually involves three parties, and these are the company that initially issues the invoice, the customer who is required to pay the invoice (otherwise known as the account debtor), and the 'factor', which is the financing company prepared to supply the cash.

 

Explaining Invoice Financing

 

An invoice is issued to a customer after a company has delivered a service or product. This invoice will now be sold to the factor and, in return, the company will receive a cash advance: this will usually be between 70% and 90% of the invoice's value. With this cash the company finds it easier to pay employees; plus, it can now purchase supplies, materials, and inventory, and it can take on more work. Once the debtor pays their invoice the business will receive a rebate for the rest of the funds, less a fee which will be based on the value of the invoice and the term. This type of financial agreement benefits all three parties: the customer receives cash almost immediately, the debtor gets favorable payment terms, and the factoring company collects a fee.

 

Explaining the Difference between Traditional Bank Financing and Invoice Financing

 

There are, of course, both drawbacks and benefits to this type of financing for businesses. The obvious benefits of factoring are a simpler application process, quicker funding, and higher approval rates when compared to bank lending. Having access to cash allows a business to grow, to meet payroll, achieve supplier discounts for bulk purchases or early payment, and to purchase equipment in order to improve productivity.

 

Factoring has a very simple application process which eliminates some of the main hurdles placed on small businesses by banks. The speed of funding with factoring offers businesses the opportunity to take advantage of opportunities as they arise. In addition, the high approval rates with factoring means that many more businesses qualify, even though they may have previously been declined by a bank. Another bonus is that funds received from factoring invoices can be used to supplement bank credit, if necessary.

 

On the other hand, when it comes to cost, a line of credit at a bank is less expensive than factoring; this is assuming that the business will be successful in their application to the bank and that they'll have access to the finance within a reasonable timeframe. Unfortunately, these applications are not always successful (four out of five companies are refused bank loans), while others find the whole process too discouraging.

 

Another possible issue with working with traditional factoring companies is that some of these companies will advise your customers that their invoices have been financed: this information can cause issues for some small businesses because they prefer to maintain control over all correspondence with their clients. Other factoring companies actually take control of your account receivables. Our advice is that you look for a factoring company that's prepared to work on a non notification basis.

 

Receivables Financing Has Become Good Business Sense

 

Today we see factoring becoming quite commonplace in many industries, such as IT companies, professional services, wholesale trade, marketing, manufacturing companies and so on. Many, many industries are discovering the benefits of receivables financing.

 

Invoice factoring is an ideal solution for business to business companies who issue invoices payable within 15 to 90 days. Any B2B company who's experiencing rapid growth, long payment cycles, or lumpy cash flow, will benefit the most from accounts receivable factoring. On the other hand, businesses and business to consumer (B2C) companies that are paid on delivery and don't issue invoices would have no need of factoring services.

 

If you're interested in invoice financing and believe it may be an option for your business, see below for our tips on how to approach working with a factoring company.

 

How to Work with an Invoice Factoring Company

 

There are many advantages to invoice financing, but it can be tricky working with some traditional factoring companies. Some factoring companies don't have excellent customer service, and between confusing terms, long term contracts, monthly minimums, and hidden penalties, the experience can be quite daunting. Our aim is to ensure that you get a fair deal when working with a factoring company, and please remember that, as always, if a deal sounds too good to be true, then it probably is!

 

You're Looking for Transparent Factoring Fees and Rates

 

Companies that make it difficult to work out their all inclusive fees are companies who are working for their own advantage, so when determining pricing, transparency is key. If you're getting frustrated and not receiving direct answers, we suggest you move on to another factoring company that will be respectful of your time.

 

Another Word of Caution: Beware of receivables factoring companies who advertise low rates, which then increase when all their hidden fees come to light. We've heard of factoring companies who charge low monthly factoring rates, but you'll be charged for two months' even if the invoice was paid in one month and one day. We also know that some factors require monthly minimums, which means that you pay for financing even if it's not required. We strongly suggest that you read our article on factoring rates and tricks so that you approach factoring with knowledge and awareness.

 

Understanding Penalties, and How to Avoid Them

 

Be aware that some invoice factoring companies out there have hidden penalties. In order to avoid these penalties, you need to know why they occur. If you believe these penalties are out of proportion or unfair, then move on to another factor. It won't be long before you'll understand what fair and reasonable terms look like.

 

Read the Fine Print in Your Contract

 

In order to guarantee their profits, most factoring companies will try to lock you into a long term contract. Obviously this is good business for the factoring company, but it may not be so good for your business. You need to know what you're signing up for, so be aware of long term contracts where you'll be charged exorbitant cancellation fees if you should decide to leave.

 

Also, be aware that some long term contracts include minimums, so consider this carefully: you may find yourself paying for something you're not using when you only needed the factoring company to meet occasional cash flow needs. You shouldn't be forced to remain with a service that's not meeting your needs, so it's vitally important that you carefully read the fine print.

 

Customer Confidentiality

 

Once you start your research on factoring you'll discover that most factoring companies operate on a notification basis, which means that when you sell your invoices to the factor, they notify your customers. They'll also ask that the funds be routed directly to the factoring company's bank account, instead of your account. This can be an issue for business owners who prefer to have control of all communications with their customers. If discretion is important to you and your business,

 

we strongly suggest that your accounts receivable financing company provides non notification factoring, meaning that you retain control over customer communications. If this is not an option for your factoring company, then you need to move to a companythat will provide non notification factoring.

 

How Much Cash Will You Receive Upfront?

 

You'll receive an advance upfront, which is a percentage of the face value of the invoice. This advance will probably be somewhere between 70% and 90% of the invoice's face value. For example, let's say your customer owes you $1000: your advance payment should be somewhere between $700 and $900.

 

Factoring Minimums Compared with Single Invoice Discounting

 

You'll also notice in your research that many factors require small businesses to submit all invoices from certain customers. On the other hand, 'single invoice discounting', also known as 'spot factoring', means that the business concerned determines which invoices will be sent to the factoring company for advance payment. Make sure you understand your factoring company's terms before you sign anything. Single invoice discounting or spot factoring is generally the preferred method for small businesses because it enables you to retain control over your financing by determining which invoices will be sent for factoring.

 

Choosing Your Factoring Company

 

Think about all the above criteria, and look for a business partner who will provide your business with the best combination of flexibility, features, and terms that you require. By doing a little research you'll soon find a partner and an agreement that offers you the flexibility, funds, terms, and transparency that work best for you. Your aim is to find a partner that you'll be happy to work with long term, so don't settle for anything less.

 

 

 

 

 

 

Dallas Factoring Companies Articles

Oil Well Cleaning Owner Interview

 

The oilfield services industry is certainly a booming one these days thanks to a renewed emphasis on searching and drilling for oil on private and state properties. One of the more profitable ventures in this field is not the drilling for oil, but the cleaning of oil and gas wells to keep them operating at full efficiency. Oil and gas drilling is a dirty business and wells will quickly become clogged even with regular maintenance.

 

Jeffrey Fielding is the owner of an oil well cleaning company who works with several drilling companies in providing cleaning and maintenance of oil wells. Over the past couple of years, Jeffrey has managed to grow his business considerably thanks in large part to his perseverance and determination. However, things were really tight when Jeffrey first started up his company and at one point he was faced with a dilemma that he didn't know how to overcome.

 

The following interview with Jeffrey tells how he managed to expand his company at a crucial time thanks to oilfield services factoring. If it wasn't for the presence of factoring companies that worked in his field, Jeffrey might be in a completely different business today.

 

"Hello, Jeffrey. It's good to talk with you and I'm glad you were able to spare the time to share your story with us."

 

Jeffrey Fielding: "Thanks, I'm glad to be here."

 

"Jeffrey, tell us a little about how you got into the oil well cleaning business first as it's something our listeners may not be fully aware of."

 

JF: "No problem, I'll start at the beginning. About ten years ago I joined an oil well crew as a roughneck, working my way up through the business. It was hard work and our crew was usually out in the middle of nowhere, but the money was good and the opportunities kept building for me. I quickly learned the job and was hired by a number of drillers to work their rigs over the next few years during the boom in the oil industry."

 

"Right from the beginning, I took notice the oil well cleaning crews that would work each rig and started talking to the guys who were a part of that business. After a few years it became clear to me that oil well cleaning was really where it was at 'cause the work was really steady and the money was just as good, if not better than what I was making. So, with the money I had saved up along with a couple of partners I opened up an oil well cleaning company of my own."

 

"It certainly sounds like you struck gold so to speak. So tell us how your business started."

 

JF: "It was pretty straightforward as we got our business loan, purchased the equipment and hired a couple of experienced people to help us clean oil wells. We had some pretty good connections and the orders started to pile in, but then we ran into a problem that none of us could even dream of happening. We became victims of our own success."

 

"I don't think I quite understand, could you explain just how that happened?"

 

JF: "Sure, about six months in we suddenly got new drillers who wanted to use our services, but we didn't have the money to expand. We get paid by invoice which can take up to 60 days to see the cash which meant that we trying to pay down our loan, the payroll and the equipment, fuel and other costs and didn't have enough cash on hand to expand. We knew that if we didn't hire new people and buy new equipment that we would miss out on a golden opportunity. However, one of my friends told me about oilfield services factoring companies that could help us out."

 

"What are factoring companies?"

 

JF: "Basically, a factoring company will buy the invoice and get us the cash immediately. We had good credit and our invoices were certainly good as well. By using their services, we were able to get the cash in our hands quickly and pay for new equipment to then expand our business efforts."

 

"It certainly sounds like the factoring companies saved the day for you, but just how do they work?"

 

JF: "Well, it was a pretty simple process. We just filled out a few forms with the information that they requested and then we sold the invoices we had already collected, but had not collected to the factoring company. We got the cash we needed immediately and they collected the invoice."

 

"It certainly sounds pretty straightforward, but why didn't you just get another loan?"

 

JF: "My partners and I went over that and another loan would just be too big a burden. We were already paying off our old loan which was considerable and didn't want to have more debt hanging over our company. By going with the oilfield factoring companies, we didn't owe anyone, anything. We just collected the money that we were owed a lot more quickly."

 

"So, how is business now?"

 

JF: "It's better than ever. By using a factoring company I was able to buy new tubing, cleaning fluids, a new vehicle and other equipment that let us take on the new orders. We were able to expand the business quite a bit and our reputation is such that we work with several drilling companies."

 

"It sounds like a dream come true."

 

JF: "It really does, but I don't know what we would have done if factoring companies didn't exist. We still use them when we need cash for new equipment or products to do our job. It's quick, safe and brings us the money we need to continue our business."Jeffrey's company really benefitted from using oilfield factoring companies that served his industry. There are factoring companies for other types of businesses as well that can take invoices and turn them into quick cash for businesses that need to expand. For Jeffrey and many other small business owners, factoring companies can make the difference in the success of your efforts.

 

 

 

 

 

Dallas Factoring Companies Articles

Oilfield Services Factoring Services

 

Running a company in the oilfield services industry is no easy business, especially with payrolls to meet, equipment to purchase and deadlines that must be met. The sheer complexity of combining the geological research and modeling, imaging and exploration and finally the drilling to see whether oil is really present can take a lot of investment before any payoff can be seen.

 

For those who own a Frac Sand Hauler for example, the efforts that must be put in to start such as business can be considerable. But arguably the biggest challenge is paying the expenses as the invoices come in. A Frac Sand Hauler often has expenses that must be met immediately, but their invoices can take up to 60 days before they see the money.

 

What follows is an interview with Ray McClerand, a man who owns a Frac Sand Hauler business and ran into the same difficulties that many new companies of his type face. How Ray overcome some of the challenges in paying his bills through oil service factoring are explained in the interview.

 

"Welcome Ray, I'd like to know first why you decided to start up a Frac Sand Hauler company and how you prepared for the challenges it created."

 

Ray McClerand (RM): "I've been in the oil business for the past 15 years or so working on different jobs from roughneck to foreman to deskwork for different companies. A few years ago I saw the potential of having a Frac Sand Hauler business in this area and got together with a couple of partners to create a company. We sat down, went over the details and decided that this would be a real good time to build a business that was serving a particular need in this industry."

 

"So, I take it you created a business plan and took out the appropriate loans in order to purchase the equipment and hire the personnel necessary to get your company started?"

 

RM: "Exactly. Because I had been around this business for a while, I understood what was needed in terms of personnel and equipment. Plus, I had some contacts with others in the business that needed the type of services that a Frac Sand Hauler provides, so I felt that there was some real potential to make a profitable business work."

 

"How did it go over the first six months or so?"

 

RM: "At first, we were really thriving as my contacts had lined up some business my way. Our loans covered the first six months or so of operations and we were doing quite well with the business we had. My partners and I were certainly happy and everything was going good when something really strange happened."

 

"Could you elaborate on what you mean by "strange"?

 

RM: "Yes, after the first five months or so I started getting requests to have our company work with several other businesses in the area. This would mean having to expand our company through buying new equipment and hiring more people. But we did not have the cash on hand to make such a move. We were getting invoices from the businesses that we worked with, but it was taking up to 2 full months before we actually got the cash."

 

"So, you were making enough money to expand, but you didn't have it on hand because of the invoice system?"

 

RM: "You got it. Add to that our initial money from the loan was running out and we needed to start paying it back as well. I knew that if we didn't expand and accept the new business that others would step in and we would lose that money. So, we were in a real pickle until I heard about oil service factoring companies."

 

"Tell us a bit about oil service factoring and how it helped you out?"

 

RM: "Well, one of my partners had heard about factoring companies, so we checked it out and decided to go with one that was best suited for our needs. A factoring company buys our invoices with cash so we have money on hand to pay our bills and do what we need accomplished immediately. The factoring company then collects the money from the invoices when they become due. It's really been a win-win for what we do."

 

"That's interesting. I wonder if you could you explain a little further just how factoring has helped your company?"

 

RM: "Sure, instead of having to wait up to 60 days before we could collect on the invoices, we were able to have the cash on hand immediately to purchase some new equipment and hire some more people to expand our business. This meant that we could accept the new offers that other businesses were providing for us and not having to pass. I cannot say enough about how factoring really benefitted us when it came to expanding our business."

 

"So, it seems like factoring really paid off for you. Do you still use factoring today?"

 

RM: "Yes we do. Although for the most part we still cash our own invoices, whenever we need money quickly so we can buy some new equipment or expand our business a little further, we go back to the factoring company and cash in our upcoming invoices. It really has worked wonders for our company."

 

"Tell me, what would have happened if factoring was not an option?"

 

RM: Frankly, I don't know how we could be in the position we are today without factoring. In this business, you have to take advantage of new opportunities quickly because there are other companies out there who will step in if you don't. Basically, I don't think we would be anywhere near the company we are today if it had not been for factoring.

 

There is little doubt that Ray's company would not be where it was without oil service factoring that allowed him to expand his company when he needed. For those in the oil industry, having your invoices cashed immediately by factoring companies allows greater flexibility so you can grow your business a lot more quickly and take advantage of opportunities.

 

 

 

 

You Can Find More Information at  http://financialfactoring.org/
and at Factoring Company Reviews at commercialbusinessloan.org

Call Us Today at: 1-888-266-0197

 

Watch our Factoring Company Video below to see how we work for you.

 

 


 

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