Even though income taxes will go up for most Americans in 2013, many of the expired tax breaks for small businesses have been renewed by the last-minute legislation signed last week. This may be seen by some as just a “spoonful of sugar to help the medicine go down,” but it’s definitely good news when considering those expirations could have hit small business owners with a double whammy this year.
These tax breaks are not the only good news for small businesses right now. The good news is that in 2013 these businesses can operate and grow even if budgets must be tightened. We all know it costs money to run and grow a business, but where will the cash come from when spending is tight?
A savvy way to acquire capital funding that companies the world over have been using since taxes were conceived is factoring receivables, also known as accounts receivable financing or invoice factoring. This debt-free alternative to traditional financing is good news when unforeseen expenses come up or if funds are tight and companies need cash to meet payroll, pay taxes, pay vendors and fund growth.
Even more good news is that Universal Funding Corporation, a factoring company with over 65 years of experience, purchases accounts receivable invoices at a discounted rate. Advancing up to 95% of the invoice face-value, they pay right away for the products and services small businesses provide to their customers, eliminating the 30-, 60-, 90-day or longer wait for payment.
Because it could take months to get a bank loan, when cash is needed right now Universal Funding can approve new clients in as little as 2 business days and fund within 2 hours of approval. Improving a company’s financial position by maximizing its purchasing power with invoice factoring is definitely good news for 2013.
For a free quote fill out our 1-minute application by clicking here.
Earlier this year a manufacturing company’s product was mentioned on a morning talk show that suddenly caused a high demand for the product, which depleted their stock almost overnight. With the holidays approaching and the knowledge that their product could be the hottest Christmas item sold in stores, the company needed fast cash in order to manufacture more products for Black Friday sales.
Invoice factoring helps many industries, including manufacturing
Their bank credit line was already fully extended and the owners didn’t have sufficient cash for a capital investment, but the company did have an asset it could sell without a setback—accounts receivable invoices. By factoring their invoices to Universal Funding Corporation, this manufacturing company was able to get a cash advance on what their customers owed them in order to fund this new growth opportunity.
Universal Funding provided the manufacturing company with enough cash to purchase the raw materials needed and cover the labor costs to produce enough inventory to meet the demand for their product. This company was able to take advantage of a rare opportunity to grow their business in a hurry. Without factoring invoices they may have missed the chance to double their profits in one holiday season.
For more information about accounts receivable factoring contact Universal Funding Corporation today.
Universal Funding proudly welcomed 10 new clients in the month of August, for a total line limit of $5.16 million per month.
Industries represented include oil, energy, manufacturing and staffing.
Each of these new clients will benefit from debt-free financing that can be used to grow their businesses. In addition, they have access to Universal’s credit screening services, tax help if needed, accounts receivable insurance, online account access and the assurance of partnering with a stalwart in the invoice factoring industry.
Universal Funding is able to offer some of the lowest rates in the industry, and looks forward to welcoming more new partners this month.
If you think invoice factoring could be for you, please contact us and we’ll help you make the decision that’s best for your business!
A common misperception surfaced this week while discussing the process of factoring with a professional acquaintance.
We were talking costs and my friend asked about typical rates that Universal Funding offers. Of course, that’s a question that varies depending on the client, the client’s customers, the volume of financing and the size and frequency of invoices. However, it’s pretty safe to say the majority of our clients enjoy rates somewhere between 1 to 2 percent for 30 day terms.
My friend, like many others looking into invoice factoring, assumed he could multiply that rate by 12 and figure out the yearly cost of factoring is between 12 and 24 percent.
That is not correct, and here’s why:
First, it’s important to remember that invoice factoring is not a loan, and thus the rate charged is not an interest rate. It’s more like a discount fee. Let’s say, to keep things simple, that my friend has a business that factors a $100,000 invoice every month. Let’s also assume the customer pays within 30 days and the rate is a flat 1 percent.
The financing cost, then, is $1,000 for that 30 days.
Let’s also assume that my friend does this same transaction every month for 12 months. That translates to $1.2 million in invoices, and $12,000 in factoring fees. Do the math and we’re able to show my friend that even over the course of a year, the rate is still 1 percent, not 12 percent.
That’s pretty inexpensive business cash! Plus, factoring can easily pay for itself through reduced administration costs and by taking advantage of early payer discounts offered by vendors. Not only that, but the increased cash flow can allow for business growth, an increase in hiring and ultimately, more profit.
If you would like more information on how factoring can benefit you and your business, contact us today and we’ll happily run some numbers and give you an idea of how we can help.
We live in tough times. Who really knows if the economy is on its way up or about to turn back down? Of course we all hope for the best but, the truth is, we just don’t know.
That’s why protecting cash flow is so important right now. In a growing economy, business owners like you will need to keep up with increasing orders. In a sinking economy, they will need to bridge the gap and keep the doors open.
It doesn’t help that, right now, companies face longer payment terms from customers and tighter loan restrictions from banks.
That’s where factoring with Universal Funding comes in. Factoring offers many benefits for companies of all sizes. Chief among those is the ability to produce needed cash very quickly. But there are other reasons why factoring is so advantageous for so many companies:
1. Factoring streamlines your accounts receivable duties
When you factor with Universal Funding, we assume the responsibility for managing the invoices. This means that you won’t have to worry about performing your usual accounts receivable duties such as sending out invoices or making follow up collection calls. We will even keep customer records for you, saving you the trouble of file storage and maintenance.
2. Factoring allows for increased cash flow without going into debt
The most common form of business funding is small business lending from traditional institutions. However, taking out a new bank loan requires taking on the responsibility of repayment. With invoice factoring, a company can avoid any new debt, which means no money to pay back.
3. Even companies with poor credit, or no credit at all, can qualify for factoring
Getting a bank loan can be a struggle for a business owner. It can be nearly impossible for a new business or one with no credit or bad credit. Since invoice factoring is based on the creditworthiness of a business’ customers, small and developing companies can use it to build cash flow, even if they don’t qualify for a loan.
4. Factoring gives business owners more time
Instead of following up on customer invoices, business owners can get right to work on new projects, new marketing efforts or new customer accounts. Universal Funding will take care of all the collections work, payment processing and record keeping for you.
5. Universal Funding offers even more
Whether you need the peace of mind of accounts receivable insurance, help with tax problems or just sound business advice from experts in the field, Universal Funding can help. The purpose of our business is to help you grow.
Invoice factoring offers many benefits to businesses including a fast cash advance period, a streamlined collection process and the ability to increase funds without taking on debt. If you are interested in seeing how invoice factoring can help you, contact us now!
Invoice factoring helps many industries, including manufacturing
We all know the economy has been in the dump the last few years. And yes, that has made things considerably more difficult for many businesses. Things like getting bank loans, offering terms to customers and waiting longer to receive payments have wreaked havoc on many small and medium-sized businesses.
None of this is new. The stories have been told on blogs and finance sites and in newspapers over and over again.
Factoring companies, including Universal Funding, have stepped up and shown many businesses how accounts receivable financing can bridge the gap in a slow economy and keep the cash moving. But what about in an improved economy? Does invoice factoring still have a place when an economy is growing?
You better believe it.
In fact, factoring might even be of more benefit when the economy as a whole is growing. One of the top benefits of factoring is the opportunity to grow a business. This is possible because factoring makes cash turn over faster, meaning a business has the ability to take on more orders, purchase more supplies and hire more employees. It also gives business owners more time to focus on what they do best: make smart business decisions.
In a slow economy, a manufacturing company, for example, might factor its invoices to make up for extended terms it offers to its customers, or to make sure it can pay its suppliers and employees on time.
In a growing economy, that company might experience an increase in orders but not have the cash available to fill them. Invoice factoring helps businesses free up capital to fulfill those incoming orders, allowing the business to grow immediately alongside demand, rather than limiting growth as a business waits for invoices to be paid.
Whether the economy continues to stagnate or gains momentum remains to be seen. Whatever happens, factoring your invoices with Universal Funding can put you in the best position to succeed and grow.
People who don’t own businesses have this glorified vision that business owners live the high-life. Lots of time off, yachts, expensive cars, the kids in private school… Of course, business owners all know that isn’t even close to the truth. At least, not for the ones who work hard every day to keep the business running and, hopefully, growing.
If you are like so many other U.S. business owners, the only time off you get is when you fall asleep at your computer trying to figure out how to finance the next big order. The yachts and cars might happen in your dreams… but that’s it.
As a business owner, you work hard, and we think you deserve to be rich.
But being rich goes far beyond money.
We want you to have the time to attend your child’s baseball game, to spend a day at the lake (whether on a yacht or sitting on a beach), or to take your spouse out to a nice lunch in the middle of the day.
While at work, we believe you should have the confidence in knowing you can pay your employees on time, every time. You shouldn’t worry about IRS tax problems getting in the way of securing financing. You shouldn’t have to worry about taking on new debt and then struggle for years to get out of it. You should rest easy knowing you can afford to take on new clients and can handle large new orders.
Universal Funding can help with all of that. We are a business finance company, but we’re also much more than that. Our lines of capital do provide peace of mind regarding cash flow, create financial stability, and grow as your company grows. Our financing makes new clients and big orders easy to handle. It’s true that businesses that partner with us make more money and generate more profits than their competitors.
But our financing, which includes so many other free benefits, also translates to more personal time for you. With more money rolling in, and more time to enjoy it, you’ll feel richer than ever.
To find out how we can help you, simply fill out and submit the rate inquiry form on the left. We’re excited to hear from you.
Growth or profits?
That’s a dilemma that every successful entrepreneur will encounter at some point.
For some business owners, profit is the priority right out of the gate. For others, profit is secondary to growth and can stay that way for years. Everyone, though, must eventually decide how to address the growth vs. profit question to achieve long-term success.
Some companies begin by hiring staff and investing in office space, computers, and other resources to enable their work. That costs money, but the sacrifice in profits can lead to heavy growth.
I don’t know of any two companies that are exactly alike. Even similar companies serving the same industry can have vastly different ways of earning money, completely different spending strategies and differing ways of handling accounts receivable.
That’s the beauty of the business world, but also the bane of many commercial financial companies. There are no one-size-fits all financing strategies that apply to all businesses. Even invoice factoring, a relatively straightforward and simple financing tool, can be tailored to the needs of individual business.
Choosing to factor your invoices is a smart decision.
Deciding which factoring company to use can prove daunting, however. Hundreds of factoring companies exist in the United States alone, so how can you know which is a good match for you?
While factoring is a business arrangement, you’re likely to have a fair amount of personal contact with the people at the company you choose; more so than with a typical bank relationship. The ability to speak with your account manager needs to be as simple as picking up the phone and dialing. No complicated phone menus, just a real person answering your call.
Also, the best factoring company for you must:
- Specialize in the industry you do business in, ensuring a proper base of knowledge and experience with the unique issues you face.
- Demonstrate a track record of stability, responsibility, integrity and strength.
- Offer access to a credit department staffed with experts in the industry
- Employ a professional collections staff who treats debtors (your customers) with the same level of respect that you do.
- Use current technologies to offer you 24/7 access to up-to-the-minute status reports on your account.
- Offer no-charge business advice and tax assistance.
- Make quick decisions and provide your money fast.
Of course, low rates and easy-to-understand terms are important too, but look for a factoring company that is interested in building a relationship with you and your business. Find a company that has similar goals and ideals as yours and you’ll enjoy a smooth path to financial freedom and healthy profits.
We hope you’ll contact us, and let Universal Funding prove that we are the best company for your needs.