- 3 Key Benefits of Invoice Factoring March 27th, 2015 6:07 pm
Invoice factoring has become a very common way for companies to generate additional cash for their business when they need to fill a large order, or want to take on new clients without worrying about having the cash on hand to fulfill the orders. If you are a new or established business that has been considering whether or not this form of financing could be the right choice for you, here are three key factoring invoice benefits.
This is the big benefit, and the main reason that most companies are considering whether or not they should pursue factoring. Generally a factoring company will provide around 70 to 90 percent of the total value of the outstanding invoice in immediate cash, with the potential for additional payment when the customer pays. As your sales continue to go up, you can often access more and more funding. For businesses that operate on a long payment cycle of 30, 60, or 90+ days from invoice to receipt, this can provide a significant cash flow advantage.
When you decide to work with a factoring company, they often take over the process of preparing statements, verifying invoices, and collecting payments from customers. They also can maintain detailed records of transactions and payments to help you identify which customers are most likely to pay on time. This can be a great way to “outsource” your accounts receivable department so you can spend your time focusing on running a business.
Flexibility with Your Cash
In addition to having the cash on hand that you need to meet operational and day-to-day expenses, factoring can help you gain more flexibility with the cash you do have. You can take advantage of bulk buying discounts, sales from suppliers, or even discounts for repaying suppliers early. Lowering your overall expenses will boost profits.
Every business owner knows that “cash is king,” which is why so many take advantage of factoring from companies like Universal Funding. Call us today or fill out our online rate form to see how this type of funding can benefit your company.
- What Does It Take for a Business to Qualify for Accounts Receivable Financing? March 26th, 2015 4:40 pm
Before you start applying for all kinds of different business financing options, it’s important to understand the qualifiers for those financing options. Many businesses have gone the route of seeking loans through banks and other lending institutions. If you are willing to pay the interest and wait for the approval, this is an acceptable option. What about accounts receivable financing? There are fewer requirements depending on the factoring AR company you go through, but it can be a more desirable choice than a loan. Here are some requirements for qualifying for AR financing through Universal Funding.
Must Have Accounts Receivable
If you don’t have accounts receivable or invoices to sell, then we can’t buy them off of you. Your business must be large enough that you have accounts receivable. Your invoices must be large enough to cover the amount of money that you need. If you are a soloprenuer- running a business yourself and have no employees, you may not have an accounts receivable department, but you may have invoices. Before you apply for such financing, make sure you have something to sell.
Meet Minimum Requirements
There are a few different companies that provide AR factoring to businesses of various sizes. Universal Funding works with small- to mid-size businesses that generate roughly one million dollars in annual revenue. As long as you meet our minimum requirements, we are happy to work with you to meet your factoring needs.
Desire Some Quick Cash
We are willing to work with you as long as you are willing to work with us. Many companies who turn to AR financing are in need of quick cash to meet their financial obligations. This doesn’t mean you can’t sell us your invoices if you don’t need quick cash. As long as you have the invoices to sell and meet the requirements, we can work out a financing program.
Start the Process Now
Factoring AR takes very little time, especially when compared with applying for a business loan. To learn more about our factoring services and requirements, fill out our rate form online or contact Universal Funding today.
- Understanding Accounts Receivable and Its Value March 25th, 2015 6:09 pm
Even when you have built your company from the ground up, there may be aspects of your business of which you only have a basic understanding. One reason why many businesses overlook factoring accounts receivables is because they know little of the process and do not work directly with the accounts receivable department. Knowing what accounts receivables are and their value can help you understand when and if factoring is a good option for your business
Accounts Receivable Defined
Simply defined, accounts receivable is the money that is owed to your business for services performed or goods sold. It is an asset for your business that plays into the total value of your company. Accounts receivable is the money owed, regardless of whether or not it has yet been paid. Due to the nature of accounts receivable, customers that have not paid for the goods or services they have received can be taken to a court of law and be ordered to pay.
How Are They Valuable?
Since accounts receivable are an asset, they are something that could be won or lost in a court of law. They are also something that can be used to help you obtain financing. It is money that is coming into your business one way or another. One way that even unpaid accounts receivable can bring money into your business is through factoring.
Factoring is the process of selling of accounts receivable to a factor. You sell your unpaid invoices to a company like Universal Funding. We pay you, then we collect the invoice amount from your customer within the terms you’ve agreed upon. Thus, if you are still waiting for your customers to pay the money you are owed, you can get that money quickly without the stress of waiting through factoring.
Learn More With Us
Your accounts receivable are a valuable part of your company. If your business generates roughly one to 40 million dollars annually, contact Universal Funding to see how factoring can benefit you. You can also fill out our convenient online rate form for a faster response.
- Understanding Differences Between Accounts Payable and Accounts Receivable March 24th, 2015 4:55 pm
There are a lot of different terms that are thrown around in business. Most seasoned business owners are familiar with jargon like accounts payable and accounts receivable. Even when you are familiar with the terms, it can still be easy to get the two mixed up. When you are working with a factor company, the differences between receivable and payable are huge. One is viewed as an asset while the other is a liability.
Accounts receivable are an asset that is used to establish the total value of your company. It is such an important part of your business that you can actually sue your customers to make sure they pay for the goods and services you provided.
Accounts payable, on the other hand, are a liability for your business. This is the money that you owe to others, such as your vendors, your landlord and your utility providers. This is money that, if you do not pay, you can be sued over to make sure you pay what you owe. You need a steady flow of cash coming into your business in order to meet your accounts payable obligations.
Receivables Can Help You Maintain Cash Flow
If you run into cash flow problems, accounts receivable can help you generate quick cash. Universal Funding is a factor company that will buy your unpaid invoices off of you to help you get quick cash. You can then take care of your accounts payable or any other business obligations that you have. Unlike a loan, you do not have to stress about paying interest or paying us back. We pay you for the invoice and we collect the invoice amount from your customer. That’s basically all there is to it.
There is a huge difference between your accounts payable and your accounts receivable. To learn more about what Universal Funding can do for you, fill out our online rate form or contact us today.
- Three Things Your Factoring Company Should Have March 23rd, 2015 5:32 pm
Entering into a business transaction with a factoring receivables company is an important decision that many companies will contemplate. Just like deciding who to purchase supplies or inventory from, or who to bank with, this is a relationship that you should carefully consider to make sure that you’re working with a reputable, ethical, and dependable business before you sign the contract. Here are three things your factoring company should have.
- Why Banks Aren’t Always the Right Solution March 20th, 2015 5:55 pm
Business decision makers have to think critically about the financial tools available to them. Working closely with advisors, analysts, accountants, and other financial professionals is an important part of staying abreast of the latest and most competitive programs available. Many decision makers turn first to traditional financial institutions, especially banks, for all their needs. While banks can provide many valuable tools to businesses of all sizes, many of these entities are not able to offer competitive terms on all commercial finance solutions. This is why many companies are choosing to work with multiple financial partners. Together, a commercial bank and a factoring company can provide you with a broader array of tools and a more comprehensive approach to AR financing.
Are Banks Really Better?
Banks offer many important services and will continue to provide numerous commercial finance solutions. However, banks have a broad focus and have to tailor programs to be attractive to a very wide range of clientele. Institutions that deal specifically with commercial finance are able to offer more targeted solutions and a greater variety of programs to the organizations they serve. Even so, their focus can be marginal.
Partner With an Agency That Understands Factoring
Working with a factoring company can be the best solution of all if decision makers are specifically interested in selling invoices. Since factoring companies focus on business finance they can therefore offer their customers a higher degree of service, more helpful answers, and even more competitive rates. Universal Funding is one of the best ranked and most trusted factoring companies in the business. Many of our clients who were declined by their bank, received funding by invoice factoring and were able to clean up some of the financial issues that led their bank to their decline decision. In turn they were eventually able to get approved for a traditional line of credit through a bank later on down the road.
Get a Rate on Invoices Today
Before you settle for the factoring program offered by a bank or even a commercial finance institution, take a closer look at what a company that specializes in AR financing can do for you. Begin by using our online rate form to get a quote on the value of your invoices.
- 3 Things Your PO Funding Company Should Never Say March 19th, 2015 5:46 pm
Purchase order funding (also referred as PO financing) is a great way for companies to generate additional cash without taking on new debt or going through the often long and rigorous process of applying for a credit line through traditional lending institutions. Before you begin working with any PO funding company, make sure you thoroughly review their qualifications and get a detailed explanation of what you can expect from the process. During your review, here are three things your potential purchase order funding company shouldn’t say—if they do, consider it a red flag and think about working with someone else. Continue reading →
- Push Your Business Over That Growth Plateau March 18th, 2015 7:52 pm
No matter how long your business has been around, there inevitably comes a time when you are having difficulty seeing any growth. Similar to exercising your body, sometimes you need to change up what you are doing in order to make it over a plateau. At Universal Funding, we know how frustrating it can be for your business to plateau. Your expenses continue to pile up, but you aren’t seeing any growth. This is when using an invoice factoring company can be particularly useful. Here are some important things to note about business growth and invoice factoring.
- A Quick Guide to Invoice Factoring March 17th, 2015 5:12 pm
The process of invoice factoring is common for many businesses who are seeking ways to get additional cash flow and working capital without following the traditional process of obtaining a loan—a process that often requires a lot of paperwork and a lengthy review and approval period. If you have heard of factoring and want to know if it’s the right option for your company, here’s a quick overview to help you understand the process.
What is Factoring?
When you have outstanding invoices that you would like to turn into immediate cash and don’t have time to wait until your clients send payment, factoring allows you to sell these invoices to a third party. The factoring company purchases the invoices by providing you a large percentage of the value of the invoices up front. It benefits your company because it allows you to get cash right now rather than waiting until your customers pay within the terms you have arranged with them.
How Does it Work?
In general, a factoring company will purchase invoices and provide an advance between 70 to 90% of the original invoice value. We can provide quick decisions on whether or your invoices are purchasable, based on variables that include:
- Your customers’ creditworthiness
- Your clients’ ability to repay the debt on time
- Total invoice amount
Once approved, the factoring company then takes over the collections process, sending out notifications and statements. The remainder percentage of the invoice amount is then paid to your company, minus fees, upon collection.
How to Get Started
Getting started with factoring is simple. Just call Universal Funding today to talk to our experienced Business Development professionals about your business and find out if we can help. We work with established small and medium-size businesses with solid revenues. We work quickly to get you a quick decision on financing. Contact us today or fill out our online rate form for more information.
- Invoice Factoring Is a Great Financing Option for Many Businesses March 16th, 2015 8:49 pm
Obtaining financing for a business can be a crucial aspect of ongoing success. However, some companies may find it difficult to secure the necessary financing through traditional means, especially where banks are concerned. Additionally, those looking for immediate financing options may be unsatisfied with the often slow approval process afforded by traditional lenders. In this case, invoice factoring can be an ideal alternative lending solution.
What Is Factoring?
Factoring is the process of selling commercial invoices to a third party factor at a discounted rate. Instead of waiting for customer payment on outstanding invoices, a business can sell these items to an interested company, who then returns payment on behalf of the customers. This process results in an immediate influx of funds to a business, which can help cover essential costs.
Factoring is highly beneficial to those companies that need financing quickly, but don’t wish to incur a great amount of debt as a result. By selling off commercial invoices, a company can make use of its existing customer base in order to obtain the capital necessary to thrive without taking on debt.
How Are Rates Determinded?
Factoring rates are typically determined by a few key points. These can include customer credit history, as well as the value and due date of the invoice. Superior factoring companies, Universal Funding included, will offer your business one flat rate for all invoices, instead of adjusting the percentage based on the debtor in question.
This can allow a variety of businesses to make use of the factoring process. Even those businesses with less-than-stellar credit histories, or those just starting out, can take advantage of factoring receivables. As a result, factoring is a great option for a those enterprises incapable of securing financing through traditional methods.
We Can Help Your Business Thrive
For those businesses interested in the invoice factoring process, Universal Funding Corporation can help. We can offer a number of financing solutions aimed at acquiring funding without incurring debt. To get started, please see our easy-to-use rate form to determine if factoring is right for your business.
- The Right Invoice Factoring Company Can Help Grow Your Business March 13th, 2015 6:19 pm
While some businesses may find traditional loans to be satisfactory, this isn’t always the case for every company. For those seeking innovative financing solutions from industry professionals, working with an invoice factoring company may be the best option. The following are just a few ways in which a business can establish whether a prospective factoring company is suited to its exact needs.
Experience Is a Key Concern
When seeking a financing company, asking the right questions is integral to finding a good fit for fast and efficient financing. Continue reading →
- Breaking Down the Invoice Factoring Process March 12th, 2015 4:54 pm
Although invoice factoring might interest your company, one of the best ways to know if it’s right for you is to thoroughly research the process. The best factoring companies try to make the process easy on your business. Universal Funding helps you to clearly understand the different roles involved with getting your business the cash it needs through the sale of your accounts receivable.
You need to maintain a good relationship with your customers, even when you factor one of their invoices. Continue reading →
- Can Your Business Work With a Factoring Company? March 11th, 2015 5:58 pm
Once you start researching viable financing options for your established business, you are likely to come across invoice factoring. This is the act of selling unpaid client invoices for immediate cash. You get paid for the invoice immediately, and your client sends payment to your invoice factoring company for the full amount according to the terms you’ve set-up with them. It’s a great option for businesses that may be in need of quick cash options. How do you know if your business can work with factor companies? You just need to ask yourself about your revenue, cash flow and accounts receivable.
What’s Your Business Model Like? Continue reading →
- Dynamic Capital Generation Strategies March 10th, 2015 6:37 pm
Companies in all stages of development have to think dynamically about the generation of capital. Leading businesses rely on a variety of capital sources, only one of which is direct income generated through sales of products or services. Approaching the generation of capital from many angles is required if an agency is to remain competitive within their field. AR financing is one of the methods that major players use to generate a steady stream of working capital throughout the year.
Factoring’s Competitive Advantages
Relying on direct income alone has some disadvantages that need to be considered. Continue reading →
- Advantages to Selling Your Accounts Receivable March 09th, 2015 5:14 pm
Most business owners know that accounts receivable is the lifeblood of their business. Cash flow consists of collecting payments for products that were sold, or services performed or rendered, but when a customer neglects to pay on time, your business can quickly turn into a nightmare. Collecting receivables that are due is often the most draining aspect of running a business, but luckily you have another option. Consider selling accounts receivables to Universal Funding and allow us to respectfully, honestly and openly manage the payment process for you.