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Member You - Do You Qualify for Factoring?
In any cleaning operation the cleaning supervisor or company owner is probably the most important person who can motivate cleaning crews to take pride in their work. But how one can motivate, instruct, communicate and lead the cleaning staff?In every job that I have had from cleaning floors to managing teams across the nation – I have used motivation to drive high performance and results from my teams and myself. Motivating and leading is what I love to do.Often time cleaning company owner face the problems keeping his supervisors and cleaning crew member motivated. Cleaning crew member start outs doing a great job from the first day, but when cleaning company owner starts trusting him, his performance goes downhi
The factoring company would begin due diligence and the lien search would return a current UCC-1 on the receivables. Many times the customer does not realize the bank placed a blanket lien on their company covering all assets, including the accounts receivable.
If this is the case, you still may qualify for factoring. If your loan or line of credit is small enough, the factor may be able to pay off your loan or line of credit out of your 1st advance and the bank has no choice but to subordinate (release) the receivables. If not, they may have enough collateral that th
Registering a limited liability company in Nevada is easy. There are a few basic processes which qualify organizations for LLC status. Any Nevada LLC formation must contain articles of organization that must be signed by at least two persons who are organizing the LLC. These articles should be delivered, along with a copy, to the Nevada Secretary of State, Corporations Division, for filing. Nevada law calls for the inclusion of certain information in the articles.This information to be included in the articles must include several things. The first item required is a business name. The name that is chosen must have either ‘Limited-Liability Company,’ ‘Limited Liability Company,’ ‘Limited Company,’ or ‘Limited’ at the end. A
Lets face it, your time is very valuable and you do not need to waste it filling out applications or talking on the phone when you may be able to identify issues in this article that would prohibit you from being able to enter into a factoring relationship.
Some of this information will be basic and you may already be familiar with it, however some may not. Just read through the article and I am sure you will find some helpful information.
Lets take a look at what factoring is:
Factoring is a form of financing where a business sells its creditworthy commercial accounts receivable to a financier known as a factor.
This is a good starting point; you need to be invoicing creditworthy businesses for your product or service. Your product must be delivered and your services rendered (no pre-bills). If they are not creditworthy and you are already having collection problems, a factoring company will not be interested in purchasing those receivables. You may need a collections service.
How much do you invoice each month:
If you are invoicing under $10,000 a month this will limit the number of factoring companies that will enter into a relationship with you. If you are speaking with a factor, let them know up front what your monthly volume is and find out if they are willing to work with companies of your size. This could save you from filling out an application and wasting your time with that particular factor.
How many customers do you invoice:
Factoring companies prefer to fund companies with more than one customer; this helps them lower their risk. If you have just one customer, the factoring will have a concentration issue, meaning if something happens to your customer they do not have any other receivables from other customers to recoup their money. Let the factoring company know this up front as well. Some factors will not work with you if you only have one customer. (If your one customer is large and stable this will help).
Do you have any financing currently in place:
If you have an existing loan or line of credit you need to find out up front if the bank has a UCC-1 against your receivables. The factoring company must have 1st position on your receivables to be able to enter into a financing relationship with your company.
I would suggest if you have a current loan or line of credit to double check and make sure of this.
I have had many businesses tell me that the bank did not have their receivables as collateral and then proceed through the application process and return the contract.
The factoring company would begin due diligence and the lien search would return a current UCC-1 on the receivables. Many times the customer does not realize the bank placed a blanket lien on their company covering all assets, including the accounts receivable.
If this is the case, you still may qualify for factoring. If your loan or line of credit is small enough, the factor may be able to pay off your loan or line of credit out of your 1st advance and the bank has no choice but to subordinate (release) the receivables. If not, they may have enough collateral that the
Acquisition and Expansion StrategiesMachiavelli advocated that a Prince should live in the new territory he has annexed to control the situation on ground and gain respect of the people.“When states are acquired in a country differing in language, customs, or laws, there are difficulties, and good fortune and great energy are needed to hold them, and one of the greatest and most real helps would be that he who has acquired them should go and reside there. This would make his position more secure and durable, as it has made that of the Turk in Greece, who, notwithstanding all the other measures taken by him for holding that state, if he had not settled there, would not have been able to keep it. Because, if one is on
Lets take a look at what factoring is:
Factoring is a form of financing where a business sells its creditworthy commercial accounts receivable to a financier known as a factor.
This is a good starting point; you need to be invoicing creditworthy businesses for your product or service. Your product must be delivered and your services rendered (no pre-bills). If they are not creditworthy and you are already having collection problems, a factoring company will not be interested in purchasing those receivables. You may need a collections service.
How much do you invoice each month:
If you are invoicing under $10,000 a month this will limit the number of factoring companies that will enter into a relationship with you. If you are speaking with a factor, let them know up front what your monthly volume is and find out if they are willing to work with companies of your size. This could save you from filling out an application and wasting your time with that particular factor.
How many customers do you invoice:
Factoring companies prefer to fund companies with more than one customer; this helps them lower their risk. If you have just one customer, the factoring will have a concentration issue, meaning if something happens to your customer they do not have any other receivables from other customers to recoup their money. Let the factoring company know this up front as well. Some factors will not work with you if you only have one customer. (If your one customer is large and stable this will help).
Do you have any financing currently in place:
If you have an existing loan or line of credit you need to find out up front if the bank has a UCC-1 against your receivables. The factoring company must have 1st position on your receivables to be able to enter into a financing relationship with your company.
I would suggest if you have a current loan or line of credit to double check and make sure of this.
I have had many businesses tell me that the bank did not have their receivables as collateral and then proceed through the application process and return the contract.
The factoring company would begin due diligence and the lien search would return a current UCC-1 on the receivables. Many times the customer does not realize the bank placed a blanket lien on their company covering all assets, including the accounts receivable.
If this is the case, you still may qualify for factoring. If your loan or line of credit is small enough, the factor may be able to pay off your loan or line of credit out of your 1st advance and the bank has no choice but to subordinate (release) the receivables. If not, they may have enough collateral that th
A Power Team is a group of people that act as mentors for each other. They offer expertise in areas that you generally do not cover. For example, I work on a power team that provides me with support in the areas of Financial Analysis, Legal Matters, Insurance, and Advertising. I provide Business Process Analysis and Restructuring. When there is potential business with a client that involves more than one aspect for the entire project, we figure out which team members are appropriate and do the proposal together. I am constantly adding members to my team that compliment and add to the services I can offer. I do not pretend that I can offer all of the project needs.The Power Team does not work in competition with each member
How many customers do you invoice:
Factoring companies prefer to fund companies with more than one customer; this helps them lower their risk. If you have just one customer, the factoring will have a concentration issue, meaning if something happens to your customer they do not have any other receivables from other customers to recoup their money. Let the factoring company know this up front as well. Some factors will not work with you if you only have one customer. (If your one customer is large and stable this will help).
Do you have any financing currently in place:
If you have an existing loan or line of credit you need to find out up front if the bank has a UCC-1 against your receivables. The factoring company must have 1st position on your receivables to be able to enter into a financing relationship with your company.
I would suggest if you have a current loan or line of credit to double check and make sure of this.
I have had many businesses tell me that the bank did not have their receivables as collateral and then proceed through the application process and return the contract.
The factoring company would begin due diligence and the lien search would return a current UCC-1 on the receivables. Many times the customer does not realize the bank placed a blanket lien on their company covering all assets, including the accounts receivable.
If this is the case, you still may qualify for factoring. If your loan or line of credit is small enough, the factor may be able to pay off your loan or line of credit out of your 1st advance and the bank has no choice but to subordinate (release) the receivables. If not, they may have enough collateral that th
The latest technologies in the telephone industry have given business people a wide range of options to choose from. It has become easy to purchase a business phone from online business stores, mail order, direct buying and through telemarketing. Both prepaid and post paid cellular business phones are available in the market.Usually online purchasing and telemarketing involve more risks than mail order and direct buying. Privacy is the major problem of online purchasing. Buyers are required to give payment information including their bank accounts and credit card numbers. Before an online purchase, a buyer has to check the security measures ensured by online business sites. A product list with detailed information is availa
Do you have any financing currently in place:
If you have an existing loan or line of credit you need to find out up front if the bank has a UCC-1 against your receivables. The factoring company must have 1st position on your receivables to be able to enter into a financing relationship with your company.
I would suggest if you have a current loan or line of credit to double check and make sure of this.
I have had many businesses tell me that the bank did not have their receivables as collateral and then proceed through the application process and return the contract.
The factoring company would begin due diligence and the lien search would return a current UCC-1 on the receivables. Many times the customer does not realize the bank placed a blanket lien on their company covering all assets, including the accounts receivable.
If this is the case, you still may qualify for factoring. If your loan or line of credit is small enough, the factor may be able to pay off your loan or line of credit out of your 1st advance and the bank has no choice but to subordinate (release) the receivables. If not, they may have enough collateral that th
With the increase of home-based and new, independent businesses being introduced, the need for obtaining a credit card reader / writer is also growing. The modern credit card readers and writers have in large quantities replaced the old style readers. Who remembers the old-fashioned type of credit card readers where the merchant had to put the credit card on top of the layered paper receipt with all of its carbon copies in the placeholder and slide the plastic arm over the card and receipt with one swoop? Many times that swoop had to be repeated over and over because the ink didn’t take to all of the copies the first, or even second time. You will probably still encounter these portable readers at street fairs and flea markets tha
The factoring company would begin due diligence and the lien search would return a current UCC-1 on the receivables. Many times the customer does not realize the bank placed a blanket lien on their company covering all assets, including the accounts receivable.
If this is the case, you still may qualify for factoring. If your loan or line of credit is small enough, the factor may be able to pay off your loan or line of credit out of your 1st advance and the bank has no choice but to subordinate (release) the receivables. If not, they may have enough collateral that they will allow the factoring company to have 1st position on the receivables and allow you to get the needed capital for your company.
So if you have current financing, check on this issue. You may find out the bank will step up to the plate and allow you access to more funds when they realize you are about to leave.
This has happened many times.
Also be aware that our factoring companies can help negotiate a subordination, so discuss this with us if you need more clarification on this topic.
Your aging report:
Your aging report is very important to a factoring company; this is the pulse on your cash flow. An accurate detailed accounts receivable aging report should be aged from invoice date and not due date. Some companies accounting software is set up to age the receivables from due date, this will reflect an inaccurate report to the factoring company.
If you have an unhealthy aging report you will have a hard time qualifying for factoring. Plus the fees you pay to a factor increase as the days outstanding increase.
Make sure you have a cash flow issue and not a collections issue.
Remember, creditworthy customers are the key.
Outstanding taxes, liens, judgments, litigations, felony convictions or bankruptcy
If you have any of these issues, it does not mean you can't qualify for factoring, you just need to be forthcoming at the beginning and find out if the issues are too complex for the factoring company to work through. This may save you some time.
Are you incorporated:
Some factors will not work with Sole Proprietors, others will, we have some that do. Find out at the beginning of the conversation.
Financial Statements:
Some factors will require financial statements and others will not.
Providing financial is usually where you will find the most aggressive rates available.
If you do not want to deal with providing financial statements, ask up front if they are required. We have programs available that requires no financial statements.
Personal Credit:
Even though your customers are the primary focus, your personal credit is taken into consideration. If your personal credit has taken some severe hits recently, discuss this up front with the factor to find out how much it will be taken into consideration.
This covers some of the basic, I hope it helps!
Thanks for reading.
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