Accounts Receivable Financing or Factoring–How to Get Cash Fast

One of the most useful, yet misunderstood types of loans is Accounts Receivable Financing or Factoring. This is a method used by a firm to obtain cash when the available cash balance held by the firm is insufficient to meet current obligations and accommodate its other cash needs. The use of Factoring to obtain the cash needed to accommodate the firm’s immediate needs will allow the firm to maintain a smaller ongoing cash balance. By reducing the size of its cash balances, more money is made available for investment in the firm’s growth.

Often when Factoring or Accounts Receivable Financing is recommended, the business owner is less than enthusiastic as they believe that it will make them look insolvent to their customers. Nothing could be further from the truth. In most cases, before their customers grew to their current size, they probably used factoring themselves. Many times, they’re still using some form of factoring.

Many businesses have cash flow that varies. A business might have a relatively large cash flow in one period and might have a relatively small cash flow in another period. Because of this, firms find it necessary to both maintain a cash balance on hand, and to use such methods as Accounts Receivable Financing or Factoring, in order to enable them to cover their short term cash needs in those periods in which these needs exceed the cash flow.

Not all Accounts Receivable lenders or Factors are comfortable with every type of business or industry. That is why we maintain active relationships with several different Accounts Receivable Lenders or Factors. You can save you lots of time and wasted energy by quickly matching your needs with the appropriate lender.

Once the application and supporting documents is received, funds can usually be made available within 2 weeks. However, there are some lenders we have relationships with that can make funds available within 24 or 48 hours of receiving the completed application and supporting documentation.

If you need help, ask us for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-421-7370! Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com

Project Financing–Lenders Want to Finance Your Business

Did you know that there are lenders even in today’s market who are not only looking for businesses and projects to finance… they are actually eager to do so? So how do you position your company to be one of them? Keep reading.

Pull up a front row seat and listen in. Today we were talking with the Managing Director of the Private Equity Group we work with. He made the comment: “It’s very difficult to find developers that can do what they claim they can.” It was very similar to what the president of an Equipment Leasing firm said recently.

Think about that for a moment.

These legitimate and capable lenders are actively looking for more businesses and projects to finance. These are sources of capital that get loan and funding requests daily. Many are from sound business concerns with good ideas. But they’re not getting the necessary documentation to support the loan requests they receive. Consequently, they can’t fund as much business as they’d like.

What are they not getting that prevents them from funding the loan? It can be many things. It can be unsigned equipment orders, not getting the right permits and/or licenses, not providing signed purchase contracts or orders from your customers. Many times it comes down to not providing something as simple as a tax return. Often it’s not being clear with how you plan to use the loan proceeds.

If you want money to grow and develop your business, whether it’s $50,000 or $500 million, you have to forecast and plan each step of the way to make sure you have covered all eventualities. Make sure all your orders, contracts, quotes, permits and licenses are fully dated and signed before you send them to your lender or investor.

Be sure to provide a clear step-by-step description of how you see the transaction taking place. If your lender has already stated how it should go, say it again so the lender knows you understand. This is very important, as the lender will be more comfortable in working with a borrower that qualifies and understands his process and procedures.

Let there be no doubt, all lenders would love for the deal to come together and fund smoothly. Just like you. So, be thorough and make sure you give them what they need the first time.

If you need help, ask us for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-421-7370! Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com