Factor Receivables for Immediate Cash Flow

woman holding open sign in from of a business

Having trouble getting a loan for your business? You may want to consider factoring your account receivables. For many small businesses, factoring receivables provides a method to turn non-liquid assets such as invoices into instant financing without incurring debt or damaging credit. Getting advanced financing for your invoices might be the right step for your business. Factoring invoices can help your revenue multiply by removing the lag time of getting paid for the services you have rendered.

Universal Funding, a receivables factor, can provide you with a cash advance based on a percentage of the total value of the invoices that you provide as collateral. Once your client pays the invoice, you receive the remaining value, minus a small factoring fee.

All in the Family

According to U.S. Small Business Administration data, family businesses make-up 90% of all businesses in North America and provide 62% of the United States’ jobs.  The average lifespan of a family-owned business is 24 years.  Approximately 40% of family-owned businesses in the U.S. are successfully passed down to the second-generation, roughly 13% are handed down to a third generation, and 3% will go on to the fourth generation or beyond.

The growth and development of these businesses depend upon a number of variables, the most important of which is cash flow. Without access to capital, the family business is destined to struggle. One resource many small businesses don’t realize they have is in their own accounts receivable.

Invoices with 30- to 90-day terms can be cashed out to a factor for immediate capital. Universal Funding purchases invoices at a discounted rate in order to provide businesses with a debt-free financing solution.  Not only does Universal Funding offer some of the lowest rates for factoring receivables out there, but the personalized service is guaranteed because Universal is a family-owned and operated business.  We know how important it is to keep it in the family.

Invoice Factoring for Small Businesses

As a small business owner, cash flow is the key to success and can often mean survival in these competitive times. With the average number of days for customers (particularly large companies) to pay invoices nearing 90 days, it is no surprise why so many small businesses face challenges in growing their businesses. Invoice Factoring can be a great financial solution; it allows a business to quickly raise working capital by using their accounts receivables.

Personalized Capital Funding

Universal Funding is a financial services company that provides personalized capital funding programs (invoice factoring, accounts receivable financing) to meet your cash flow needs. With over 65 years of combined experience, our team has the expert knowledge to help your business grow and succeed.

Universal Funding is a stand-alone financial entity. All principals are on site, work shoulder-to-shoulder with our management team, factoring specialists and customer service agents to ensure direct interaction with our clients. We want you to know exactly who we are and how we do business. In turn, we’d like to get to know you and how we can best fulfill your business needs.

Fast Funding for Established Businesses

Many small and medium-sized businesses may not be familiar with the term ‘factoring’. Big business has been using this fast and easy financial instrument for decades. Only recently have some financial institutions begun to offer invoice factoring to small and medium businesses.

Universal Funding Corporation funds your accounts receivable for a pre-determined rate. This is not a loan, and no debt is entered on your company’s balance sheet. The credit of your customers is the primary concern of the factoring company. The rates are determined by a diverse set of variables; this will depend on the on volume of sales, the invoiced customer’s credit history and payment schedule with you. There are other factors involved with account factoring as well, but term rates are generally low. Factoring also allows companies to take advantage of early-pay discounts often offsetting the cost of factoring in full while still allowing for a company to increase sales and grow.

Flexible cash-management techniques can provide businesses with the leeway necessary to improve growth, and increase profits. This collation, invoice financing vs. invoice factoring, provides excellent details to help determine if invoice factoring is a feasible option for your business.

Advantages of Selling Accounts Receivable

When a company offers customers a credit term, they agree to provide the goods or services today in exchange for payment in the future. Because the company agrees to postpone the payment, they receive a premium, known as interest, from the customer at a future date. This process allows businesses to keep their prices competitive while offering customers a convenient way to pay for their purchases over time. Unfortunately, situations arise that prevent customers from paying for their goods and services on time. By missing payments, they prevent a company from accessing the cash from the sale to produce more goods and services, putting them in a bad financial position. By selling accounts receivables to an invoice factoring company, businesses can get the cash they are owed quickly and conveniently without the need to hassle customers for cash. Most small to mid-sized businesses don’t have an established collections department, and the best factoring companies will provide the collection service at no cost.

The Glass is Half Full

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 that expiration 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.

Leave a Reply