Welcome to the Small Business Ideas Forum! We are a community of over 100,000 small business folks with over 163,000 posts for you to browse. We pride ourselves on being the friendliest forum you will find and we'd love to have you as a member of our community. Please take a moment and register for a free account. If you need any help, please contact Chris Logan.

Small Business Ideas Forum

Small Business Ideas Forum

A friendly place to share small business ideas and knowledge, ask questions, find help and encourage others that are involved in the small business industry. Topics include small business marketing, generating revenue and small business computing.

Go Back   Small Business Ideas Forum > Generating Revenue, Insurance, Taxes, Etc. > Small Business Finance
Register Search Today's Posts Mark Forums Read

Reply
 
Thread Tools
Old 7th June 2011, 02:09 PM   #1
tgriffith
Senior Member
 

Join Date: Jun 2011
Posts: 129
Default Invoice Factoring

Hello and good morning,
I'm just curious if anyone here has tried invoice factoring as a way to increase cash flow?
Just to be honest, I'm working for a company that offers it and am looking to find the general perceptions of this type of financing. I'm NOT trying to push its services or even promote the company. Just wondering if anyone here uses invoice financing and what the experience is like.
Thank you-
Travis

tgriffith is offline   Reply With Quote
Register or log in to remove this ad.
Old 1st July 2011, 11:20 AM   #2
Portal
Member
 

Join Date: Apr 2011
Location: Baltimore, MD
Posts: 20
Default

Invoice Factoring could be crucial when looking to increase short term financing. You have to make sure you have a motive with this money when conducting this payment structure. For example, maybe you want to increase short term cash flow in order to invest in other businesses. You want to make sure that you are confident with this investment.

Portal is offline   Reply With Quote
Old 1st July 2011, 01:12 PM   #3
tgriffith
Senior Member
 

Join Date: Jun 2011
Posts: 129
Default

Thanks for the reply, Portal. Very much appreciated!

__________________
Travis Griffith
www.universalfunding.com/blog
tgriffith is offline   Reply With Quote
Old 1st July 2011, 01:16 PM   #4
BeTheBest
VIP Contributor
 
BeTheBest's Avatar
 

Join Date: Mar 2009
Posts: 595
Default

Factoring? I know it's not for everyone... and you really need to understand how it all works to be comfortable... but it could be the perfect answer to small growing businesses.

I used it in a company that I owned several years ago. It is more popular in some industries... so when you introduce it, you (as a business owner) should have a clear and easy to understand method of explaining things to your customers.

I said that, but it all depends on how the factor works. I haven't been involved for a few years... but the way I understood it... the factor contacts the account and basically explains that payments are directed to THEM, not the business.

In some cases, that could be viewed as 'weak' as far as the business is concerned. Factoring could also be an expensive way to finance... so you have to keep your eye on that ball to.

But look at this. Small business... great idea... people asking for the product... and no money to produce. Worse... the bank manager ONLY gives you a warm smile and a firm handshake.

Tell the banker to go 'pound salt'... if you know what I mean. Just about every business can get factoring money. Now, there are some factors that only deal in certain sectors... or industries... but there are good factors that will work with you. It's a great way to get your business launched... and you can 'stop' the financing (in most cases) whenever you want.

Hope this helps! Good luck!

__________________
Help to set up or improve any website starting today!
How You Can Be The Best Online
Get help with your Website, SEO, Marketing and Writing Content
BeTheBest is offline   Reply With Quote
Old 25th August 2011, 10:46 PM   #5
cfoservices
Member
 

Join Date: Apr 2010
Posts: 79

Default

I advise my clients that there are 3 things that need to be present before factoring is a good idea:

1. The company has to have identifiable growth opportunities. If factoring is viewed as a way to bail out of a difficult business situation it probably will not work. However if a business has growth opportunities and needs factoring as way to finance that growth then that will work.
2. The company has to have good and consistent profit margins. If the profit margins are thin factoring is going to eat the profit margin up more.
3. The company has to have customers that pay their bills on time and are credit worthy. If they are not credit worthy then factoring will cost a whole lot more.

__________________
Michael Barbarita - Next Step CFO - CFO Services
Starting a Business
cfoservices is offline   Reply With Quote
Old 6th September 2011, 03:14 AM   #6
Creditguard
Member
 

Join Date: Aug 2011
Posts: 13
Default

with invoice financing you don't borrow any money or get a line of credit. Instead, you finance your invoices for instant cash flow. The organization financing your invoices pays you and takes on the risks associated with unpaid invoices. Because of this, you won't get the full invoice amount. Instead, you receive the invoice amount minus the financing costs. benefits include
- Available cash flow grow your business, buy equipment, do anything you have wanted to do to build a better business.
- Instant cash helps cut overhead.
- Pay vendors paying your vendor bills early or on time can lead to better relationships and potential discounts.
- Buy supplies, equipment and buildings some businesses find they can't stock up on supplies, which puts off finishing jobs for customers. With cash from your invoices, you can increase your supplies so you can meet more demand or keep up with demand.

Creditguard is offline   Reply With Quote
Old 17th September 2011, 10:20 AM   #7
phanio
VIP Contributor
 

Join Date: Feb 2009
Location: Texas
Posts: 261
Default

Expensive -but if your company is growing (and only if it is growing) and feeling growing pains (cash flow issues between shipping and payment) then invoice factoring can be OK - short-term.
If you are using it for long-term financing or for a business in decline - then you have other issues you should be working on.

__________________
Business Money Today - Small Business Loans
phanio is offline   Reply With Quote
Old 31st October 2011, 09:10 AM   #8
tobuso
Member
 

Join Date: Aug 2010
Posts: 62
Default

1. Factoring - Grow as fast as the invoices come in. It is instant cash flow based on your invoices.

2. Merchant cash flow factoring - similar to invoice factoring but instead of factoring one particular invoice for an amount. It is factoring your total volume of verifiable deposits via bank statements or credit card processing statements.

3. Business Line Of Credit - These can be secured or unsecured. Unsecured is almost impossible to get unless you know what you are doing. Secured can be easy, especially if you have heavy equipment or real estate backing the loan.

4. Hard Money - Hard money loan against real estate. This can get you cash out of a paid off property. These are great if you have been turned down for traditional financing.

This is just a few of the things we help business with on a daily basis. Call me if you need help with any of these. Philip 864-735-5366

tobuso is offline   Reply With Quote
Old 31st October 2011, 10:19 AM   #9
daveb1
VIP Contributor
 

Join Date: Dec 2010
Posts: 185
Default

Very interesting topic. For the experts what is considered a better method?

Advanced Factoring or Maturity Factoring?

What about these two methods in comparison to invoice discounting?

Also has anyone heard of a new trend coming about called "reverse factoring"?

I think one of biggest keys to all of this is the fees and costs you can expect to pay / incur per method or outlet. No matter how good of a financing method or plan you have or no matter how good you are in business you can do serious damage to your business opportunities through ill advised financing. It is kind of like what happens to general people in real life using credit cards. It can turn ugly quickly even when there are the best of intentions just because the fees are too high and all the small logistical details are not correctly worked out.

daveb1 is offline   Reply With Quote
Old 15th December 2011, 01:19 AM   #10
Comm Realtor
Member
 
Comm Realtor's Avatar
 

Join Date: May 2007
Location: International Service
Posts: 83
Default

In my commercial banking days I often referred clients to "factoring companies". Small businesses sometimes need to finance their accounts receivable.

Comm Realtor is offline   Reply With Quote
Reply   

Bookmarks


Similar Threads
Thread Thread Starter Forum Replies Last Post
Review My Online Invoice Application manishwebmaster Reviews 1 13th February 2009 06:36 PM
Swedish Musician Wanting Know How To Invoice To Other EU States runsilent Small Business Finance 0 12th December 2008 02:01 PM
Need Small Business Invoice Application? Any Ideas? robertw477 Computer Software 4 22nd October 2008 04:43 PM
Electronic Invoice DarkOne Small Business Finance 6 8th January 2007 02:37 AM



Thread Tools

Get Updates
RSS Feeds:
RSS Feed for Small Business Finance RSS for this Category Only: Small Business Finance

RSS Feed for Small Business Ideas Forum RSS for Entire Forum
Forum Rules


Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


Small Business Ideas Forum


 
At Your Business - Small Business Directory
Free Business Forms - Prewritten Documents
 
Search Engine Guide
Small business guide to search marketing

 
Small Business Brief
Fetching the Best Small Business Info


Free Links - Free Advertising
Free Guide - Online Directory



Advertise your business here
Contact us for more details!


Semantic Juice
Register now to access free Quick SEO service!


Rocket Lawyer
Sign up for free 7 day trial. Boost your biz!


Buy UPC Codes
Get your products listed online!




All times are GMT -5. The time now is 01:08 AM.


Powered by vBulletin® Version 3.7.3
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
Copyright 2004 - 2018 - Privacy