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 Modesto 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.
Modesto

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 Modesto

Modesto (Spanish for "modest"),] officially the City of Modesto, is the county seat and largest city of Stanislaus County, California, United States. With a population of approximately 201,165 at the 2010 census, Modesto ranks as the 18th largest city in the state of California. The Modesto Census County Division, which includes the cities of and Riverbank, has a population of 312,842 as of 2010. Modesto is located in the Central Valley, 90 miles north of Fresno, 40 miles north of Merced, California, 92 miles east of San Francisco, 68 miles south of the state capital of Sacramento, 66 miles west of Yosemite National Park, and 24 miles south of Stockton. Modesto has been honored as a Tree City USA numerous times. It is surrounded by rich farmland; Stanislaus County ranks sixth among California counties in farm production.[14] Led by milk, almonds, chickens, walnuts, and corn silage, the county grossed nearly $3.1 billion in agricultural production in 2011.Modesto was immortalized in the 1973 The award winning film captured the spirit of cruising and friendship on 10th and 11th Streets in 1962 and led to the revival of 1950s nostalgia that included the TV show ge success. Director George Lucas is a native of Modesto, graduating from Downey High School in 1962.

 

The Gallup Healthways Well Being Index for 2011, which interviews 1,000 participants daily and asks individuals to assess their jobs, finances, physical health, emotional state of mind and communities, ranked Modesto 126 out of the 190 cities surveyed. In December 2009, Forbes ranked Modesto 48th out of 100 among "Best Bang for the Buck Cities". In this ranking, Modesto ranked 8th in housing affordability and time travel but also ranked 86th in job forecast growth and 99th in foreclosures. Modesto has a large agricultural industry which is based on the fertile farmland surrounding the city.

 

Despite this the city has traditionally had above average unemployment rates. In December 2012, the unemployment rate reported by the U.S. Bureau of Labor was 13% while the rest of the U.S. was reporting an unemployment rate of 8.5%. , a nearby almond factory in Salida, is a major nut supplier. Modesto is also home to the largest winery in the world: , is the largest wine bottle manufacturing company in the world. The company provides thousands of office and manufacturing jobs to Stanislaus County residents. Other major privately owned companies based in Modesto include Specialty, and 511 Tactical (formerly a part of Royal Robbins). A cannery downtown produces food which is usually shipped to Sacramento and Fresno for transfer to rail or ship. has a few cereal and snack factories in the area. There are several small steelworking companies in Modesto. In mid 2008, a number of road projects were being constructed, repaved or repaired, with an estimated total cost of nearly $120,000,000.

 

 

Information for the state of California

The economy of California is large enough to be comparable to that of the largest of countries. FY 2011, the gross state product (GSP) is about $1.96 trillion, the largest in the United States. California is responsible for 13.1 percent of the United States' $14.96 trillion gross domestic product (GDP). California's GDP is larger than that of all but 8 countries in dollar terms (the United States, China, Japan, Germany, France, Brazil, the United Kingdom, and Italy).

 

California's GDP is larger than the GDPs of Russia, India, Canada, Australia, and Spain; in terms of Purchasing Power Parity,[103] it is larger than all but 9 countries (the United States, China, India, Japan, Germany, Russia, Brazil, France, the United Kingdom, Italy), larger than Mexico, South Korea, Spain, Canada, and Turkey. In terms of jobs, the five largest sectors in California are trade, transportation, and utilities; government; professional and business services; education and health services; and leisure and hospitality. In terms of output, the five largest sectors are financial services, followed by trade, transportation, and utilities; education and health services; government; and manufacturing. Agriculture is an important sector in California's economy. Farming-related sales more than quadrupled over the past three decades, from $7.3 billion in 1974 to nearly $31 billion in 2004.[107] This increase has occurred despite a 15 percent decline in acreage devoted to farming during the period, and water supply suffering from chronic instability.

 

Factors contributing to the growth in sales-per-acre include more intensive use of active farmlands and technological improvements in crop production.[107] In 2008, California's 81,500 farms and ranches generated $36.2 billion products revenue.[108] In 2011, that number grew to $43.5 billion products revenue.

 

We will buy your invoices and give you the cash immediately.  

Factoring is when a third party commercial finance company purchases the Invoices or Accounts Receivable from a business. -Modesto Factoring Companies

 

 

HOW THE EXPERTS GET FINANCING  

Modesto Factoring Companies Articles

Effective Ways for Small Businesses to Avoid Cash Flow Problems

 

Without steady cash flow most businesses will fail to thrive, especially small businesses and start-ups. We've all heard the phrase "Cash Is King" and that's certainly true for established businesses, but for new businesses just getting started cash flow is even more important. Sadly, many new businesses fail to realize just how devastating cash flow problems can be to a business trying to establish themselves in the market. In fact, many businesses die a sad and lonely death simply because of bad cash management, and these are businesses that would otherwise have survived had they not experienced cash flow problems. Statistics show that 82% of businesses fail because they were unable to manage their cash. That's a tragic figure, especially when there are effective ways for new, small, and even large businesses to avoid these problems.

 

So, let's take a look at some important rules that small businesses should be aware of to ensure they never have to face liquidity.

 

No. 1: It's Cash That Sustains Business Growth

 

So many businesses don't consider cash flow an issue because they see the orders flooding in; however, many growing companies do experience cash flow problems. Increased sales generally mean increased costs to deliver orders; plus, in order to support the new volume of business other sections of a business typically need to grow. Your business may appear to be highly successful as orders continue coming in, but keep in mind that the faster your business grows the more financing it will need.

 

No. 2: Margins Are Just Accounting - They're Not Cash!

 

We know that accounting, and accountants, can be pretty creative with figures because there's nothing shareholders and board members love more than hearing about the industry-leading margins you're achieving; but your board members and shareholders are not the ones who have to find the money to meet payroll and pay your landlord. Margins don't pay your employees. Your sales may be booked down when your customer's order is delivered, but how long will it be before you receive payment? 30, 60, 90 days, or even longer? If your customers are not paying you and you're struggling to pay your expenses, your business is now in survival mode. Keep in mind that you may have great accounting margins but still have an empty bank account.

 

No. 3: When You're Selling B2B (Business-to-Business) Cash Flow Problems Will Likely Be Your First Issue

 

The more sales you make the more money you make, but when you're selling B2B it's not always that simple. Yes, you sell and deliver goods or services to another business and provide them with an invoice, and your customer will pay the invoice at a later date. But how much later? If you chase the business too hard for payment they'll probably never work with you again, so you could receive payment months later. You're not going to pass up businesses who buy with high volume, so you have no choice but to wait. So, you end up with a cash flow problem.

 

No. 4: Cash Flow Problems Can Occur Very Quickly

 

It doesn't take much for cash flow management to become a serious problem, so monitor your cash flow very carefully. Determine how much of your working capital is locked into receivables, inventories, raw materials, and so on; and know exactly how much money is required to meet both your sales targets and operating expenses. You may have made the sales but that doesn't mean you have the cash, and you may have paid for inventory but that doesn't mean it's automatically a cost of goods sold.

 

No. 5: Your Inventory Ties up Cash

 

You can't sell your goods until you've purchased or built them and, whether your goods are sold or not, your vendor still expects to be paid. This means that your inventory is locking up your cash. You could eventually make two times or even three times your money on your inventory, but margins do not equal cash.

 

No. 6: You Must Be Practical About Working Capital

 

Working capital is the figure left over when current liabilities are deducted from current assets, which means it's the money you have in your bank account available for meeting operating costs, paying vendors, and buying inventory - all the while waiting for your business customers to pay your invoices. Understanding and grasping the concept of working capital is a very necessary survival skill in business because being able to maintain sufficient cash to pay your own financial responsibilities whilst dealing with all the unknowns in business can be very tricky.

 

No. 7: Be Clear on What "Accounts Receivable" Actually Are

 

The money owed to you by your customers is called accounts receivable, which means the money that's sitting in your customer's bank account that belongs to you is called receivables. Just like inventory, the amount of money in your accounts receivable column is money you don't have. Certainly, you've done the deal and you've sent the invoice, but now you're waiting to be paid. You must remain very vigilant until such time as the invoice has been settled and the money is physically in your bank account.

 

8. Monitor the Health of Your Business Very Closely

 

Three aspects of your business that require close monitoring include -

 

-Inventory Turnover: Measure how long your inventory stays on your balance sheet without being converted to cash;

 

-Collection Days: Measure how long it takes to receive payment for services rendered or goods sold;

 

-Payment Days: Keep a record of how long you wait before paying suppliers.

 

Now, make a plan. Project these figures out to 12 or 18 months ahead then compare your plan to what actually occurs. This is a really great way of gaining some insight into your own business.

 

No. 9: Prepare for Financing before You Actually Need It

 

Don't wait until you need financing to start reaching out to finance companies. Contact companies who provide financing, especially credit line financing, and look for products where interest is not payable if the money is not used. Don't wait for your business to have cash flow issues. Waiting until you urgently need cash or a loan will subject you to higher interest rates and dodgy terms. Start the process while your business is healthy, which will allow you to negotiate finance terms from a position of strength. We strongly suggest you be proactive and find a partner ready to finance your business; a partner that's prepared to grow with you.

 

 

We will buy your invoices and give you the cash immediately.

 

 

Modesto 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.

 

 

 

 

 

 

Modesto Factoring Companies Articles

How Medical Staffing Helps The Medical Industry

 

Mary Henderson sat in her office, waiting for the phone to ring. Her job was a busy one, and she had stopped all her calls and shut her door five minutes before the phone conference was set to begin just to get some time for herself. The truth was she was stressed to her breaking point. Her company Med Staff needed to hire three new people to cover the demand of their clients. The problem was, they couldn't. They were short on funds.

 

Med Staff did temporary medical staffing. They employed LPN's, RN's, and a few others of the same ilk. Companies that needed nursing for a short amount of time paid Med Staff, and the nurses were sent over on short term contracts. Then they came back, and they were sent somewhere else.

 

A retirement home had contacted Mary two weeks ago, they were undergoing an expansion, and they would need temporary staffing until they could appoint permanent nurses to the shifts. Mary had known she didn't have enough people for this, but she took the contract on anyways, figuring she could hire people. There were always a number of nurses and technicians applying for work at Med Staff, and she knew it wouldn't be a problem to hire a few new people.

 

There had been a problem though. There simply wasn't enough money in the books to do it. The company was doing fine, but a quick expansion, even as small as three people, simply wasn't going to happen, not without help.

 

She had gone to the bank for a loan, but they had denied her. It seemed to Mary that the only people who could get loan money from a bank were the people who didn't need to do so. And then she had found something different, a website online about factoring. She had looked the site over, and set up the conference call.

 

The phone rang, she picked it up. "Hello?"

 

"Hi, is this Mrs. Henderson?" a cheery woman's voice asked over the phone."

 

"It is."

 

"Great! My name is Stacy, I'm going to help you today."

 

"Okay great." Mary said.

 

"I'm looking over the form you filled out, it looks like your company temporarily staffs medical professionals?"

 

"Yes," Mary said. "Nurses mostly."

 

"Great," Stacy said. "And if you called me, it means you ran into a snag."

 

"I took a contract to fill five places in an expanding retirement community. I have two people available but needed to hire three more. Unfortunately, we just don't have that kind of money in the books right now. We have a few outstanding invoices yet to be paid, but until they come in, there's nothing I can do."

 

"Do you know how factoring works?" Stacy asked.

 

"Not really," Mary admitted.

 

"Okay, well we don't look at your business credit, we look at your clients' credit. We know they have some time to pay bills, and we're interested to see if they can pay those bills. If they can, we become interested in helping you out, because we think all businesses should have a fair shot to make it, and sometimes things just don't work out."

 

"This is the first time it hasn't worked out," Mary said. "And it's hard."

 

"I know. I hear about it every day. The cool thing about my job is I get to help fix it. So what we do, if we feel secure in our ability to help you, is we buy a piece of your accounts receivable. We aren't just loaning you money, we're basically becoming active in your business. That is you get the money you need right now, but we have an assurance that we get our money back, later down the road."

 

Mary nodded behind her desk, even though the other woman couldn't see her. She had never heard of factoring before she came across the site on the internet, but the way Stacy explained it certainly made sense.

 

The call continued, with Mary giving the information that Stacy would need. She promised to get back to her within a couple of days, and then they hung up. Mary went on with her work, and a day and a half passed.

 

Mary was at her desk when he phone rang then. It was Stacy.

 

"Good news," she said as soon as Mary said hello. Mary couldn't help but smile as Stacy went on. "We're going to be able to help you out."

 

"You don't know how great it is to hear you say that," Mary said.

 

"Believe me, I do," Stacy said. "I get to say it more often than not, and I know that we're really helping good people, and good businesses."

 

"The bank, they couldn't do anything," Mary said, she felt salty tears stinging her eyes as they welled there.

 

"They aren't built to help people like we are. They just want as much money as they can get. We want money too, because it's a business, but if you don't succeed, we don't succeed, and it's also important to us that we help people."

 

"So what's next?" Mary asked.

 

"Well the real answer is I fax some stuff over for you to fill out and sign, but the fun answer is your business gets the help it needs, and you keep going to work each day. Well, not the weekends."

 

Mary couldn't help but laugh. "Believe me," she said. "I work plenty of weekends."

 

Stacy laughed as well, and then got the fax number she would need. Once again the women hung up and Mary let out a long breath as she sat back in her chair. She used a tissue to dab the tears from her eyes. She knew everything was going to be okay.

 

 

 

 

 

Modesto Factoring Companies Articles

Factoring: An Overview

 

What Is Factoring?

 

'Factoring' is when a third party commercial finance company purchases the Invoices or Accounts Receivable from a business. The finance company concerned is called a 'Factor' and the transaction is known as 'Factoring'. 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.

 

The majority of factoring companies purchase invoices and advance cash within 24 hours, although the terms and nature of factoring can differ between industries and different financial service providers. Depending on the industry, the customers' credit histories, and various other criteria, the advance rate can range from between 80% and 95%. The business also receives back office support from the factor. Once the factor has collected from the business's customers, the business will be paid the reserve balance of the invoices, less a nominated fee for assuming the collection risk.

 

The main benefit of factoring is that a business is not required to wait one or two months (sometimes more) for payment by a customer - the business will receive cash in hand to operate and grow their business. It's important to note that factoring is not a loan: there's no debt with factoring. Funding is unrestricted, which means that a business has more flexibility than borrowing from a bank.

 

The Five Simple Steps of Factoring

 

1. As a business, you provide a service to your customer;
2. The invoice for this service is sent to a factoring company;
3. On this invoice, you'll receive a cash advance from the factoring company;
4. It's now up to the factoring company to collect full payment from your customer;
5. Once payment has been received, you'll receive the balance of your invoice account from the factoring company - minus their fee.
The Advantages of Factoring

 

There are many reasons why factoring has become a popular and valuable financial tool for businesses today. The key benefit of factoring is that a business receives a quick boost to its cash flow: in fact, many factoring companies offer cash on their Accounts Receivable within 24 hours! The factoring company takes responsibility for collecting customer payments, and may also evaluate the payment and credit histories of a business's customers.

 

Other Benefits Include:

 

' When a business needs access to cash, factoring can be customized and managed in order to provide the necessary capital;
' The business balance sheet will not show this financing as a debt;
' Factoring is not based on the company's credit or business history: it's based on the quality of its customers' credit;
' Factoring is not determined by the company's net worth: it provides a Line of Credit based on sales;
' There's no limit to the amount of financing through factoring, unlike a conventional loan;
' Factoring is an ideal solution for start up businesses that often require immediate cash flow.

 

Is the Concept of Factoring New?

 

No, it's not! In fact, the origin of factoring comes from overseas trade among nations and dates back several centuries to the 1400s when it became part of doing business in England. In the year 1620 it arrived in America with the Pilgrims. Like other financial tools, factoring has improved and evolved over the years. It became an effective way of creating cash flow in the United States at a timewhen companies faced strict limitations when trying to secure loans in the country's damaged banking system.

 

Who Uses Factoring?

 

Factoring is available for companies of all sizes, ranging from a one person business to Fortune 500 companies. Every business can use factoring as an effective way of increasing their cash flow. In addition, factoring spans all types of industries, from transportation, trucking, textiles, manufacturing and distribution, staffing agencies, and oil and gas.

 

The cash generated from factoring is used by companies to purchase new equipment, pay for inventory, expand operations, add employees, and basically cover any expenses related to the running of their business. The beauty of factoring is that it allows companies to make quick decisions and to expand at a faster pace.

 

How Does Factoring Work?

 

For the purpose of this post, we'll describe a fictional example as a way of illustrating a common factoring situation.

 

XYZ Transport is a trucking company: their intention is to double their fleet size over the next two years in order to service more clients in the West. The company has just successfully won a new customer on the West Coast who requires freight to be shipped from Oklahoma to Los Angeles. This new customer is more than happy to pay for the service within 30 days; however, that won't cover all the immediate costs involved, like payroll, fuel, and maintenance costs of running the route.

 

This is a familiar situation for the owners of XYZ Transport: the lack of available cash flow in the past has prevented the company from accepting new business. So now XYZ Transport has turned to a factoring company: they have agreed to sell the West Coast customer's invoice to the factoring company in exchange for a 90% advance on the total amount - within 24 hours! This much needed influx of cash will replenish the trucking company's reserves and allow it to continue running the Oklahoma - Los Angeles route. In addition, XYZ Transport now has the added flexibility of taking on new customers.

 

How Much Do Companies Factor?

 

Each company has its own unique business needs, so somecompanies only factor invoices for customers that are slow in paying, whilst other companies factor all of their invoices. Companies can factor receivables ranging from a few thousand dollars right through to millions of dollars each month.

 

What's the Difference between Factoring and a Traditional Bank Loan?

 

Factoring, also known as Accounts Receivable Financing, is a quick, flexible and effective way for businesses to create a steady cash flow stream. See below for how factoring is different to a Line of Credit at a bank or a traditional business loan

 

 

 

 

 

Modesto Factoring Companies Articles

Small Business Invoice Factoring: The Clever Choice!

 

Many small businesses are discovering invoice factoring and quickly realizing this was a very smart business choice! Why? Because small business invoice factoring converts receivables into immediate cash!

 

The Ideal Alternative to Traditional Bank Loans

 

Small businesses are discovering that invoice factoring is the perfect, and much easier, alternative to traditional funding sources, like bank loans and cash advances. Any small business who sells to the government or other companies can use invoice factoring to enjoy the many benefits of accessing immediate cash flow. Whether you've applied for traditional funding and been refused or applied and are still waiting to hear if you've been accepted, keep in mind that small business invoice factoring is a very viable option for you.

 

How Does Invoice Factoring Work for Small Businesses

 

One of the major benefits of small business invoice factoring is that it's the credit worthiness of your customers that determines the funding decision. This means that if you're a business who sells to the government or other businesses with good credit, you're the perfect candidate for small business invoice factoring.

 

Applying for invoice factoring is a very simple process, and you certainly won't be forced to wait weeks, even months, for a decision as you would with traditional funding sources.

 

Why Small Businesses Are Choosing Invoice Factoring

 

Many businesses are only just learning about invoice factoring, even though factoring has been around for a long time. Any business owner who has applied for a bank loan knows only too well that, to start with, the application process can take months, and secondly, there's still no guarantee you'll be approved for finance.

 

According to the Small Business Administration, in the first quarter of the year 2015 small business loan approval rates at banks were 22%, and at credit unions it was 43%. The limit on business credit cards is often capped at less than $100,000, which is often not sufficient to cover unexpected expenses or large projects.

 

Invoice Factoring: The Smart Alternative to Traditional Lending

 

Today, small business invoice factoring has become the smart alternative for many business owners because factoring provides an immediate cash advance, with no restrictions placed on the money received. It's also important to note that factoring is not a debt, which means there are no limitations on how you choose to use the funds received.

 

Yes, small businesses can access quick money with a merchant cash advance, but there's always a high cost involved. You'll soon discover that the cash advanced will cost your business more than 70% effective annual interest. Alternatively, cash advance lenders demand daily repayments with full payment due in just a few months. The demand for daily payback can destroy a small business, but sometimes business owners are left with no choice.

 

So, let's take a quick look at just some of the benefits of small business invoice factoring, and once you read through this list we're sure you'll think of more benefits to your own business.

 

With this immediate cash advance you'll be able to -

 

- Employee new staff members

 

- Easily meet payroll

 

- Accept larger orders from bigger customers

 

- Invest in marketing and sales

 

- Expand manufacturing and production

 

- Your business will be able to weather cash flow cycles and seasonal sales periods

 

- Pay down any existing debt

 

- Take advantage of early pay discounts from your suppliers (these discounts often cover your factoring fees)

 

- Extend your customers' payment terms

 

- Provide a smooth cash flow to support daily business operations

 

- Overheads are lowered due to reduced administration expenses

 

- Your business will be self-financed during rapid growth periods, without having to give up equity.

 

As you can see, the benefits of small business invoice factoring are many and varied, so why not contact us today and let's talk business!

 

 

 

 

 

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The benefits of using a Factoring company versus a bank loan

 

If you are looking for a convenient way to obtain business capital, factoring is one of the best options available out there. From a recent study, it has been identified that many people go for bank financing in such instances, considering that it is the least expensive method of investing. However, factoring is associated with many other advantages and we will let you know about them through this article.

 

A proper cash flow is something that every business in the present world should have. In addition, they need to speed up their cash flows along with time. Otherwise, it will not be possible for them to get banks for financing. Unfortunately, banks are not in a position to accommodate all the financial requirements of a company, due to tough credit standards. That is where factoring comes into play. It happens when a company sells its accounts receivable to a bank or a factoring company. The amount that can be taken depends on value of the invoice.

 

Key benefits associated with factoring

 

' A company can get large amounts of capital through factoring. It is because this method is entirely based upon accounts receivable. It has impressed many small scale businesses out there since they can obtain a bigger line from their accounts receivable for services or goods. They will not be able to get such a big amount of capital from any conventional bank lender out there. Factoring is something that is based on the credit strength of your potential customers. If your company has more potential customers with healthy credit strengths, you can easily enjoy the benefits of factoring.

 

' Factoring is quicker than traditional bank loans. Since most of the accounts receivable factoring lines are in a position to be set up, approved and actively funded within a matter of few weeks, you can go through a hassle free process. However, banks will take more time to engage with their credit reviewing activities about your company. They might even wait for audit results or fiscal period closes. Therefore, if you are in need of quick business capital, factoring is the number one option available out there to consider.

 

' Factoring is something that expands quickly along with the growth of your company. Almost all the factoring companies out there support it. Your company doesn't need to have an excellent track recording of business. You just need to select a factoring company that is big enough to accommodate all your business development ambitions.

 

' A factoring company does not offer loans to their clients. Therefore, you cannot find many similarities between a loan and factoring. A factoring company will purchase your accounts receivables along with cash. Therefore, it can be considered as a similar process to increasing the working capital, while showing it as a liability in the account balance sheets. This will even reduce debt in the balance sheet, when compared to borrowing. At the end of the day, your company will get the opportunity to enjoy a lower debt to equity ratio.

 

' Factoring is less expensive than equity. Most of the businesses approach equity investors to cater their financing requirements. However, there isn't any substitute for equity capital in some expansion purposes and business investments. Almost all the equity investors expect a higher return from the accounts receivable than the cost. When it comes to factoring arrangements, you won't be able to find any dilutive effect on shareholders. This will assist you a lot to stay away from hassle.

 

' Factoring is also recognized as one of the best options available to improve your turn. In the present world, many factoring companies will verify invoices with your customers and check whether they are being paid on time. This will motivate your customers to pay the invoices on time through a gentle reminder. This will result in a better service delivery from your end as well.

 

 

 

 

 

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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.

 

 

 

 

 

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Healthcare Staffing Factoring

 

The healthcare field is arguably one of the most rapidly growing industries in the United States. With the baby boomers, the largest section of our population, reaching retirement age the need for expanding healthcare services has never been more pronounced.

 

At the center of this growth are healthcare staffing agencies that hire for hospitals, clinics, doctor's offices and a wide range of medical facilities. However, while business is booming the ability for these staffing agencies to expand is inhibited by the customer invoice system. Fortunately, there are healthcare staffing factoring companies around to help them in their time of need.

 

We asked the owner of a local healthcare staffing agency, Joy Reed, to talk to us about how factoring companies helped expand her business and provide a much needed boost at a critical time for her company.

 

"Hello Joy and welcome. I was hoping you would tell us a little about how healthcare staffing factoring companies helped your business, but I suppose we should begin by how you got started in this business?"

 

Joy Reed (JR), "Thanks for having me. I actually have been a part of several start-up businesses in my recent career and was looking for a field that would show a lot of promise. It was pretty clear to me that medical staffing was a big need in the healthcare field so I set about to start my own business. I had experience in starting up businesses before, so I drew up a business plan, took out a loan, rented the offices and hired a staff to get started."

 

"So, you did what most people do in starting up a business. How did it do?"JR: "I actually got off to a pretty good start. I had made a few contacts and managed to get some business right away. This was really helpful because as you might know our clients use invoices for payments and it can take up to 90 days before we actually get the cash in hand. Around four months in we were facing a real crossroads as new opportunities opened up for our business, but we didn't have the cash on hand to take advantage."

 

"I'm a little confused. You say you were doing well, but you didn't have the ability to expand your business?"

 

JR: "That's right. The problem was back to the invoices that were making up wait up to 3 months before we had the cash. I really wanted to expand my staffing business to handle the new opportunities I was being presented, but I couldn't because I was still waiting on the invoices to finally turn to cash. So I was asking my accountant about what could be done when the suggestion of a healthcare staffing factoring company was introduced."

 

"Tell us a bit more about factoring companies."

 

JR: "Basically, factoring companies purchase the invoices right on the spot so you can have cash on hand immediately instead of waiting up to three months. For healthcare staffing factoring companies, they will then collect the money from the business when the invoice is read to be fully paid. It really worked out for me because I was able to get cash quickly to add new personnel and even expand my offices to include another section of the building I was renting in."

 

"I understand that factoring companies are there for many different kinds of businesses, including medical staffing. Was it difficult to get set up with a factoring company?"

 

JR: Actually, it was pretty easy once we found a company that met our needs. I just filled out a short form and they looked over a few of the invoices I had to see what companies that I worked with. It really didn't take long at all before they agreed to cash some of the invoices and I got the money I needed to expand."

 

"Could you tell me a little more about the advantages of using a factoring company like this?"

 

JR: "Sure, I was not only able to hire a couple of new people and rent additional space, I've been able to cash my invoices when unexpected bills come up or if I need to make a purchase quickly for a new piece of equipment. This has come in really handy recently when I decided to move to a new location and needed some cash on hand to make the transition. The factoring services are really quite good with reasonable rates and fast service."

 

"What's the differences in using factoring companies over getting a new loan?"

 

JR: "It is frankly much better than getting a loan because with factoring there is nothing to pay back. We are basically getting our own money from the invoices we've earned up front and paying only a small fee. With a loan, I would not only have to pay it back but with interest as well. Factoring for us has really been a godsend when it comes to making decisions about how to expand my business. I'm no longer tied down to waiting 2 to 3 months to get paid when I can take what my business has earned and get cash immediately."

 

"I take it that you are happy with how healthcare staffing factoring has worked out for you?"

 

JR: "You would be correct. I cannot imagine how my business would have expanded at that critical time without factoring companies to buy my invoices. This is a great service that has helped me in my time of need and now my medical staffing business is bigger than ever. I'd recommend factoring companies to anyone running a business that relies on invoices if they need to get cash quickly."

 

There is little doubt that Joy Reed has been quite happy about the services she received working with a factoring company. Perhaps factoring is right for you and your needs, be sure to search for the type of factoring business that works in your field so that you can get the right services in helping your company to succeed.

 

 

 

 

 

Modesto Factoring Companies Articles

Bookkeeping Mistakes Commonly Made by Freight Brokers

 

It's true that freight brokers shoulder a lot of responsibility; from matching shippers and carriers, to ensuring that each and every piece of cargo arrives at its proper destination. Freight brokers also have the added responsibility of accurate bookkeeping, because failure to prioritize bookkeeping can result in the loss of money.

 

Below we've listed some common bookkeeping mistakes made by freight brokers, and how to avoid them-

 

Handling the Accounting In-House

 

Many business owners try to save money by handling the books themselves, or perhaps delegating this very important task to a family member or an inexperienced employee. Sure, you may save time and money initially, but errors can be costly: when you attempt DIY accounting you could well end up with more expensive financing terms, higher bond premiums, or a number of other unforeseen expenses. It's very important that you hire a competent bookkeeper because, not only will you save money, but you'll know that the job will be done accurately, quicker, and more efficiently.

 

We understand only too well that running any business is time-consuming and hard work, and many freight brokers are simply too busy doing their day-to-day tasks to focus on bookkeeping tasks, such as the monthly reconciliation of credit card accounts and bank accounts. It's through reconciling statements that you get a clear idea of how much credit or cash you actually have, and you can also pick up on any errors that may have occurred.

 

It can be so tempting to postpone this rather tedious task, but the truth is that your credit card statements and bank statements must be reconciled every month, preferably the moment each statement becomes available. In this way you'll be able to identify any potential problems in a timely manner; problems such as lost checks, missing deposits, fraudulent charges, and so on.

 

Failing to Track Invoices and Receivables

 

You're not going to get paid if you're using poor accounting practices with your accounts receivable. Let's face it, getting paid equals cash, and cash is the lifeblood of every business. An experienced freight broker understands that your cash flow can be strained by the delay between when you pay your carriers and when you receive payment from your customers. If you're finding that tracking and collecting invoices is taking too long, why not consider invoice factoring? An invoice factoring company will purchase your invoices for a small fee, with the bonus being that you get paid immediately, plus you're spared the time and expense of having to deal with collections.

 

Don't Forget Liabilities

 

One of the major considerations a surety has when looking at your business financials in order to underwrite a bond is whether you have sufficient assets to cover your liabilities. Many times we see an inexperienced bookkeeper recording a liability, but when the payment is made they forget to reverse the liability. This is a serious error because it results in liabilities being overstated and net income being understated, which makes your business appear to be less financially secure than it really is. These serious errors can be avoided by employing the services of an experienced bookkeeper. We also recommend that you have another set of eyes (which may be an owner or a CPA) regularly review the balance sheet to check for unusual account balances

 

Too Many Expense Categories

 

Another common error we often see with inexperienced bookkeepers is creating too many expense categories, or miscategorizing expenses. Generally, most industries and businesses have a standard set of expense categories, and when a loan underwriter or surety sees too many categories, or the miscategorizing of expenses, it stands out like a big red flag. It tells them that your books are not well prepared. Use an accountant or experienced bookkeeper to correctly set up your accounting software right from the beginning, and don't automatically add new expense categories unless careful consideration has been made. Remember to ask your accountant or CPA for advice, because they'll be able to guide you on how to classify expenses.

 

Incomplete Information on Invoices

 

It's very important that, when you invoice your customers, you provide sufficient detail on each line item. Do you invoice by weight, per piece, or per mile? Or is the charge a flat fee? If there are additional charges to invoice, such as reimbursements for fuel or fees, these should be listed as separate line items. In addition, these charges must be clearly and accurately detailed in order to avoid any confusion. When you send invoices to your customers that include clear and concise details, it prevents pushback from your clients. If there's missing information on your invoices and your customers are confused by unrecognizable charges, it could well cause a delay in payment, which is the very last thing business owners need.

 

Not Understanding the Functionality of Accounting Software

 

Many freight brokers purchase an accounting software package because they're anxious to get their business up and running, but they fail to learn how to use it correctly. This is probably not an issue if you're already outsourcing your accounting and bookkeeping tasks; but if you're using this software in any way at all, perhaps to enter checks and run reports, it's important that you spend some time learning how to use all the available functions. When used correctly, the right accounting software can save you a lot of time, in addition to providing real-time information on the state of your business. It's this information that helps you make important business decisions!

 

 

 

 

 

 

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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.

 

 

 

 

 

Modesto Factoring Companies Articles

Medical Invoice Factoring: A Viable Financing Option for Healthcare Professionals

 

Many healthcare professionals will attest to the fact that qualifying for a business loan or commercial line of credit is becoming harder and harder. Fortunately, there is a viable option, and it's known as Medical Factoring. Medical factoring is available for all types of healthcare businesses, including medical practices, and is the ideal financing option for businesses experiencing cash flow problems.

 

The Challenges Faced by the Healthcare Industry

 

Generally, the healthcare industry has excellent growth prospects and is quite resilient to economic turbulence, but it's also an industry facing more financial challenges than ever before. In years gone by, healthcare professionals, medical facilities, and medical suppliers found it reasonably easy to manage their cash flow, but today Medicaid, Medicare, and private insurance companies have laid down strict guidelines for reimbursement, including onerous documentation and billing requirements, so-much-so that businesses not only receive less money, but must wait longer to receive it.

 

This situation can, and does, create financial issues for many medical providers who, while dealing with increasing operating expenses, salaries, and benefits, must also accept less and wait longer to receive their money. In many cases, the health provider's long-term viability is placed in jeopardy, and because of cash flow problems the business is unable to pursue new opportunities for growth. A physician running a relatively small practice could well have $1 million tied up in receivables!

 

The Problem with Bank Loans

 

When any business confronts a cash flow crisis their first port of call is usually a bank or other commercial lender, and a Line of Credit or business loan can certainly help in the short term; however, neither will permanently solve the problem and are therefore not optimal financing solutions. Bank loans are more suited to large fixed capital purchases, but they're not designed to cover short-term recurring business expenses. On the other hand, a Line of Credit is somewhat better, but because they have credit limits and fixed terms they're not able to provide the assurance a business needs of an unlimited, renewable source of business capital. Once the credit limit has been reached or the term of credit line ends, the lender has the right to not renew or increase the credit limit. And, unfortunately, this is the situation that many healthcare professionals find themselves in today.

 

The Perfect Medical Financing Solution

 

So, what's the ideal solution for medical financing? The perfect solution would be one that's flexible enough to grow and expand with the healthcare business; one where the business owner is not required to re-apply to a bank or other lender for credit limit increases. The ideal solution would provide a reliable and steady source of working capital, capable of financing both the current and future operations of the business.

 

Medical Factoring

 

Fortunately, there is a solution for healthcare professionals, and it's known as Medical Factoring. Medical Factoring, or Medical Receivables Factoring is an area of receivables factoring that deals exclusively with accounts that are medical in nature. Due to the fact that many healthcare receivables are either reduced or denied by insurance providers, and because of the expertise required to manage the claims process, factoring companies who factor medical receivables face significant challenges, so-much-so that it's almost a necessity for these companies to specialize in medical factoring. In fact, there are many factoring companies out there that do nothing else!

 

What Types of Business Use Medical Factoring?

 

Factoring has been around for hundreds of years and many industries have discovered the benefits of invoice factoring. However, many medical service providers are completely unaware of the existence of factoring and therefore don't realize that it's one of the most flexible and powerful business financing tools available today. Almost any healthcare provider can benefit from Medical Factoring, including -

 

- Medical Centers and Hospitals;
- Physicians - General Practitioners and Specialists;
- Outpatient Facilities and Clinics;
- Medical Staffing Services;
- Medical Labs;
- Dialysis Facilities;
- Physical Therapy Groups and Clinics;
- Rehabilitation Centers;
- Home Healthcare Providers;
- Providers of Durable Medical Equipment.

 

The Benefits of Medical Factoring

 

The benefits of medical factoring are many, and are similar to those enjoyed by businesses in other industries. They include -

 

- Fast payment;
- Consistent cash flow;
- Outsourced accounting and invoice collection;
- An increase in percentage of billings collected;
- Working capital finance that's debt free;
- Building business credit.

 

Medical Practices

 

Receivables Factoring offers medical practices an excellent financing alternative to loans: the medical practice will have consistent and flexible financing tied directly to its insurance claims. This means that the amount of available financing increases as more claims are filed. Having a reliable cash flow in a growing medical practice ensures that there will always be sufficient liquid business capital to cover expenses.

 

Medical Supply Companies

 

In the same way, medical factoring offers medical supply companies quick and predictable business financing, directly tied to the volume of sales. The amount of financing grows as sales grow, automatically providing the working capital needed to both operate and grow the business.

 

Generally, medical factoring is particularly well suited for smaller medical offices. Because your chosen factoring company will be handling most of the administrative work involved in collections and claims processing, overhead expenses and office staffing can be kept at a minimum, thus allowing you to focus on what you do best - delivering the best medical care possible!

 

If you have a small practice with good growth prospects, but you also have slow cash flow, then you'll soon discover that medical factoring could well be the ideal financing tool to help you finance the growth of your business. It's true that most factoring companies have minimums, but there are factoring companies out there who will finance an office billing as little as $50,000 per month.

 

How Medical Receivables Factoring Works

 

Medical Factoring is quite simple: Basically, medical factoring accelerates payments for any healthcare business that depends on third-party payors. This means that within days of the initial billing (instead of weeks) most of the business's billed amount will be deposited directly into that business's bank account, thus drastically shortening the collection cycle and eliminating the constant headache of cash flow problems.

 

The added bonus of medical factoring is that it's not a loan, and as such, has no impact whatsoever on the business's balance sheet. There are no arbitrary limits, no credit limits, and no stringent financial requirements. The healthcare professional can factor as much of the billing as is generated by the business, thus making factoring the ideal financing tool for business growth.

 

How to Create a Factoring Program

 

Setting up a factoring program will typically take a couple of weeks at most. Obviously, the factoring company will need reassurance that the third-party payors are reliable and that their clients' practices are stable. However, once the factoring program has been established, medical financing is predictable and continuous. Claims will typically be funded within 48 hours after being submitted to the medical factoring company.

 

The Factoring Process

 

Medical Factoring is a very simple process -

 

- Periodically, your practice submits billings to Medicare, Medicaid, and insurance companies (note that certain medical factoring companies will do this for you), with copies forwarded to your factoring company;
- Within 48 hoursthe advance, or up to 85% of net collectables, will be deposited into your business bank account. The balance will be held in reserve to settle billing discrepancies;
- The factoring fee will be collected once a factoring company has been paid, with the balance of the billings being remitted to you. The fee charged by the medical factoring company will vary according to the size and types of claims generated by the practice.

 

The Future of Medical Factoring

 

It's true that medical factoring covers a relatively small portion of factoring activity overall; however, more healthcare professionals are learning about factoring and, today, we're seeing an increase in interest in medical factoring throughout the healthcare industry. As the benefits of this type of medical financing become more widely known, it's anticipated that medical receivables factoring will become more widely used.

 

Medical factoring provides a short-term solution for shortfalls in working capital financing, plus a long-term solution for medical financing and patient accounting support, and it's for these reasons that medical factoring as a financing tool deserves careful consideration by healthcare businesses.

 

 

 

You Can Find More Information at  https://factoringofaccount.net
and at Factoring Company Reviews at accountreceivableservices.net

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

 

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

 

 


 

Get CASH NOW for your outstanding receivables.

 

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