Non-Recourse Invoice Factoring versus Purchase Order Funding
By the number of calls we receive at BusinessCash.com, there is much confusion about Non-Recourse Invoice Factoring versus Purchase Order Funding. In this article, we will walk you through the steps of how each one them works. We will also tackle which type of companies each financing option applies. What is Non-Recourse Invoice Factoring? Non-Recourse Invoice Factoring is a financial agreement between your business and a factoring company for financing based on accounts receivables against cash. It is available to any company that bills...
read moreNotice of Assignment: A Step in the Factoring Process
In understanding the Notice of Assignment’s (NOA) both concept and style, it is important first to understand what does invoice factoring means. As well as how does it work. Invoice factoring also referred to as Accounts Receivable (AR) factoring. This is a type of debtor finance that grants you funding based on your invoices. It is a financial transaction between a factoring company and your business inducing that you agree to sell your AR to your factor at a discount. After setting an agreement, your factoring company will provide you with...
read moreSingle Client AR Factoring: Your solution to cash flow problems
The primary challenge of running any business is to keep consistent cash flow running. Some markets are more vulnerable than others to cash flows problems. It’s a common dilemma for small and mid-sized companies. These companies usually find themselves lacking enough working capital to fill a second large order, especially after fulfilling the first one and awaiting payment. Even more problematic is companies that rely on one or two large clients for their revenues have limitations in their cash flow solutions. Often, they struggle to...
read moreWhat are the Average Factoring Rates?
Factoring companies will look at all of the above criteria to help determine their rate. A higher volume of invoices in a service-oriented business with shorter terms will typically get the best rates. You could find yourself paying 4% or less for the entire transaction. If the payment terms of the invoices have already gone beyond 30 days, you may pay up to 7%. Determination will depend on the customer’s industry and credit history. Experienced factor lenders know that certain business types, such as large cable companies, regularly take...
read moreWhat is Non-Recourse Invoice Factoring?
Non-Recourse Factoring or Factoring without Recourse is an agreement within a factoring contract. The factor’s client doesn’t have to pay back the factor if an invoice is not paid explicitly due to the bankruptcy of the client’s customer. Such invoice should be with credit protection in place. Factoring companies offer credit protection as part of a non-recourse program. What is Non-Recourse Factoring? How Non-Recourse A/R Factoring Works-PDF What are the Benefits of Non-Recourse Invoice Factoring? Credit protection against...
read moreIndustry links for Machine Shops
Want to keep current on industry trends in the machine shop industry? Check out these links: Associations Aluminum Association, Inc. American Association for Machine Translation American Electroplaters & Surface Finishers Society (AESF) American Galvanizers Association (AGA) American Iron and Steel Institute (AISI) American Mold Builders Association (AMBA) American Society for Materials International (ASM) American Welding Society (AWS) Association for Manufacturing Excellence Association of Steel Distributors (ASD) Association for...
read moreRecourse vs Non-Recourse Factoring
There is a great deal of information on the internet about recourse vs. non-recourse factoring. Much of it is wrong. When choosing a Factoring Company, you should understand what a factor is offering you. What is Recourse Factoring? Recourse Factoring means that if the invoice is not paid by your client by a certain date, the Factoring Company can charge that invoice back to you or you can replace that invoice with another good invoice. In some ways, recourse factoring is similar to a line of credit from a bank with a borrowing base as one of...
read moreHow to Choose a Staffing Factoring Company
Staffing Factoring is a subset of Invoice Factoring with a twist. When picking the right staffing factoring company for your business, critical questions need to be answered: Staffing expertise: As the owner of a temp staffing agency, you understand the nuances of your business. Workman’s Comp, constant cash flow needs, matching the right person with the right job, proper job classifications- The variables to manage are relentless! You need an accounts receivable financing company who understands the vagaries of your business. In 1998...
read moreFactoring Fees Explained
If you are considering working with a Factor using Invoice Factoring to fund your B2B or B2G sales growth, it is essential to understand the factoring fee structure and cost. Comparing factoring rates can be challenging, with different Factoring companies charging for their services in many ways. What is the Best Transparent Factoring Pricing for You? The cash flow and other factoring benefits need to be compared to your actual cost of funds. The comparison is to see if you are paying genuinely competitive rates for this secured receivable...
read moreWhy Factoring Companies Can be Better than Banks for Small Business
Picture this – you own small business. Such business is one that you have worked hard to ensure has happy customers, quality products, and excellent service. Now, because of all your hard work, you are finally getting the recognition you deserve. Your small business is generating. This is reaching new clientele and expanding your product lines, along with your profit margins. However, growth can be expensive, and you need capital to reach your full potential. As a small business owner, you have a wide variety of options available....
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