Invoice factoring is a financial service that allows a company to sell the value of their outstanding invoices at a discounted price. The factoring company will pay you immediately for your invoices, at a small discount, and then collect on the invoices directly from your customers.
For many companies, invoice factoring is a beneficial service that shortens the sales cycle and allows businesses to collect faster on their invoices than if they had operated their accounts receivables internally.
Running an accounts receivables department can often be time consuming, and costly in-regards to day-to-day cash flows. Cash flow is the lifeline of liquidity in which a business operates and meets its growth objectives. Without working capital to meet normal business obligations, businesses struggle to make sales goals in addition to expansion.
It’s difficult to review outstanding invoices and then make the necessary calls and emails to customers to collect and actualize those revenues. For many businesses, new purchase orders are oftentimes delayed by collections of receivables. This is where a factoring company comes in and provides the working capital a business needs upon the drafting the invoice. The company would then receive the agreed upon value of the invoice in a deposit to their account, and the factoring company would then collect on the invoice value directly from the customer.
Having the capability to collect on invoices faster, provides certain agility to a business that might not have been the case with an internal accounts receivable department. Liquidity is king in providing a business the fuel it needs to actualize expansion opportunities like new facilities, or simply take on more purchase orders due to a more efficient sales cycle.
At CapFlow Funding Group, we work with our customers as partners in their business objectives. We offer a wide range of flexible terms that are designed to provide custom working capital solutions, for your unique business.
We will work with your team and consult on rates, which invoices to factor and more. It’s important to consider factoring with a company that will consult with you 1 on 1 to understand the specific needs of your business, and which invoices should be factored for quicker access to working capital.
The 2008 financial crisis caused banks to tighten restrictions on small business loans. They focused on larger loans as they are more profitable. With the economic downturn that resulted from the COVID pandemic, traditional business financing is harder to secure than ever. Grant programs such as the PPP (Payroll Protection Program) and EIDL(Economic Injury Disaster Loan) have dried up. Business owners that are still struggling to recover are looking for alternative funding options to keep their businesses afloat. However, this is not the only reason business financing alternatives are becoming more popular with business owners. They offer benefits beyond funding.
One of the biggest frustrations of traditional business financing is how long it takes to get a loan. Certain steps must be taken before the bank will even accept the application. Then once it is submitted, approval can take anywhere from a couple of days to months. That can be too long to wait for businesses that need funding fast.
Business finance alternatives typically require less information than banks, making the application and approval processes much quicker. Businesses can often have the funds they need within days, allowing them to spend less time searching for financing and more time on taking care of business.
Even if you have all the proper documentation prepared when applying for a traditional loan, certain industries have been “black listed” by banks insured by the FDIC (Federal Deposit Insurance Corporation). The reason is that those businesses are considered high risk and the FDIC won’t insure banks that issue high-risk loans.
Businesses that work with alternative lenders often find more success when looking for business financing. Business owners should do their research and weigh their options. If your business is typically turned away by banks, don’t waste valuable time jumping through their hoops. Instead, consider the business finance alternatives.
Unless you’ve been dealing with the same bank forever, most of them will just take your mounds of paperwork and follow a standard checklist to see if you qualify for financing. Alternative lenders focus on understanding your business and building a relationship. This may not seem all that important at first but think about it.
Many business finance alternatives provide short-term financing, something many businesses will need more than once. Establishing a relationship with an alternative lender will make the process even easier the next time you apply. With a bank loan, you have to go through the entire application process every time, and the chances of being approved are slim. Alternative lenders work hard to get your application approved for funding.
If approved for a traditional bank loan, beware. They often come with strings attached called loan covenants. These covenants place restrictions on how you can spend the funds you received. Do you want someone else telling you how to invest in your business?
With most business finance alternatives, once you have been approved and received funding, you can spend those funds how you see fit. Some options, like the merchant cash advance, include repayment amounts that fluctuate with your cash flow.
If you need immediate funding or have been denied a traditional loan, alternative financing options could be the answer to your problem. At CapFlow Funding Group, we value each of our clients and work hard to provide them with the perfect funding solution for their business. Our team works with various industries and specializes in invoice factoring and merchant cash advances. If neither of these fits your needs, we will work with trusted partners to get the funding you need. Contact us today. We’re looking forward to getting to know you.
When you’ve been in business for a little while, one thing is certain. You’ve probably had times when you wish your customers would pay their invoices sooner. Whether you want to ensure the timely payment of operating expenses or invest in new business opportunities, factoring can help make that happen. Just imagine how getting money that is owed to you before invoices are due can improve your cash flow. This would make almost every aspect of your business run smoother and reduce financial stress. The benefits of factoring services can make a big difference when it comes to building a successful company.
One of the best benefits of factoring service is getting paid for your invoices without the long wait for them to come due. It could mean immediate access to funds that can be used to pay for other expenses or even expand operations! This would allow you to spend more time and energy on taking care of business and less time trying to see how far you can stretch your working capital. Think about how much better you’ll sleep at night knowing that your cash flow is taken care of and you can move forward with confidence.
Factoring allows you to get money owed to you quickly so you cover operating expenses with ease and invest in new opportunities as they arise. Paying your bills on time or earlier will put you in a favorable position with your creditors. In addition, you will no longer be faced with passing up a big order or taking advantage of a new business opportunity. One of the many benefits of factoring services is that you can avoid putting business growth on hold while waiting for invoices to be paid.
By using factoring services, you can have a new source of cash flow that will allow you to operate more efficiently. You’ll be able to take on more contract jobs and invest in the equipment you need to provide better service overall. This means an improved bottom line for your company which will result in higher profits for your business.
Using factoring is a great way to help improve profitability because it provides access to capital without having to seek out bank loans or place large sums of money into other investments. Instead, all you need is a steady flow of invoices from clients who have a reliable payment history. Being able to avoid the lengthy application process and long-term debt associated with traditional bank loans is another one of the many benefits of factoring services.
Have you ever experienced a payroll shortage? If so, you know how serious of an issue it can be when trying to keep daily operations running. It can cause serious damage to the trust and morale of your employees. It may even cause you to lose some of your best workers. Factoring services can relieve the anxiety over meeting payroll and preserve your employees’ confidence in your company.
Once you’ve sold your unpaid invoices to a factoring service, your work is done. They will take care of collections as those invoices are now owed to them. This will cut down on accounting paperwork and let you focus on more important business matters.
Think of CapFlow Funding Group as the ultimate financial partner. Our team of experts has helped countless businesses with factoring services. We are committed to providing our clients with a quick decision on their application for funding, easy access to funds once they have been approved, and the opportunity to take advantage of all the benefits of factoring services.
Not sure factoring is right for your business? We also offer merchant cash advances and work with trusted partners to find the perfect funding solution for your business. Want to learn more about how factoring services work and how can benefit your business. Contact us today. We look forward to working with you.
The retail industry has been hit hard by the recent COVID pandemic, with many stores shutting their doors for good. Retailers have seen market forces previously unseen, leading to months of closures and shifts in consumer behavior patterns. While this epidemic is undoubtedly hurting many businesses, it does provide opportunities for those who are able to see through the chaos.
Some retailers may be feeling vulnerable because of the current economic climate and the fact that in some locations, the number of new COVID cases has begun to spike. However, for those businesses that have survived the first wave of the COVID pandemic, it is important that they take steps to align their business operations to meet customer demand in a new way. Here are some retail store recovery tips that can help you re-emerge from the cloud of COVID and have a successful retail comeback.
Like it or not, there’s no denying that Amazon is a shining example of how to succeed in the shifting retail landscape. They invested heavily to ramp their distribution networks during the quarantines and social distancing resulting from COVID. Not only did this help them ride out the storm but it also helped them to secure a favorable position with consumers. Many of the consumers who shopped Amazon out of necessity continue to do so for the convenience of shopping from home and having packages delivered to their front door. All those hours spent running from store to store can now be spent doing more enjoyable activities or just relaxing.
As a small business owner, you are probably wondering how you could possibly compete with the retail giant. Mimic them – of course, but not on such a grand scale. We are not suggesting that you go out and buy a fleet of delivery vans with your company name emblazoned on them. However, you need to find a way to make it easier for the customers you served before the pandemic to return to doing business with you. Provide consumers with the ability to order online or over the phone and offer shipping, curbside pick up, or delivery. While you may not be in the position to offer a 2-hour delivery window like Instacart or Amazon’s next-day delivery, rethinking how you meet customer demand is one of the best retail store recovery tips.
Don’t look forward to things getting back to normal. Despite the overuse of the term, this is the new normal. The pandemic has impacted every aspect of our lives. Remote work and social distancing have caused shopping behaviors to change. With sweat pants and comfortable footwear now the new “work from home” attire, department store shopping has seen a decline while grocery stores have experienced a significant surge. Because consumers are spending more time at home, their needs have changed.
In addition to making the shopping experience more convenient, retailers also need to adjust the type of goods they are offering. That’s not to say that a clothing retailer should start selling groceries. However, it may be time to rethink the type of clothing you’re offering. If you sell dressier clothing such as professional or evening attire, you may want to introduce a more casual line. Research trends in your industry and adjust your offerings accordingly.
When it comes to retail store recovery tips, you will need to rethink your sales forecasting, at least for the foreseeable future. Retailers are now faced with a dynamic and unpredictable market. Sales forecasts based on last year’s data will not be accurate because COVID changed consumers’ habits and buying preferences. Traditional models may serve as an appropriate benchmark for some things but shouldn’t be relied on to forecast future sales. Industry trends, as well as consumers’ spending habits, will provide more insight when developing a sales forecast.
We get it. Knowing what you should do to meet the evolving customer demand is only half the battle. The other half is having enough capital to implement the necessary changes. Unfortunately, traditional business loans were difficult to get before COVID. Now it can be almost impossible.
If your business needs an influx of capital to keep your business moving forward, alternative financing options can be a great choice. At CapFlow Funding Group, our team of professionals will evaluate your business’s unique situation and help you determine which funding option would best suit the company’s needs. We service many different industries with a variety of different funding needs. In addition to merchant cash advances and invoice factoring, we work with trusted partners to provide additional merchant funding options. Contact us today!