Financing a Retail Food Broker With Factoring

May 17, 2012 By

As a retail food broker you’re probably very familiar with the fact that large customers will always demand that you give them credit terms. This is especially true for retail chains, which usually ask for anywhere between 30 days and 60 days to pay an invoice. Having to offer terms can be financially challenging for companies that don’t have the capital to do so. This problem gets compounded because most suppliers will usually insist in the quick payment. This leaves you with money flowing out faster than its flowing in. And if this situation is not managed correctly, it can create serious problems.

One way to fix this is to ask customers for faster payment. This is usually possible if you offer something in return – such as a 2% discount if they paying 10 days or less. However, not every customer will accept to pay faster. And those that do, will always keep the option of changing their payment speed if their own circumstances change. So while your situation may be improved, you still end up with him predictable cash flow. For many retail food brokers, a better solution is to use factoring.

Factoring provides similar benefits to quick customer payments without actually requiring your customers to pay any sooner. The transaction works using a financial intermediary, called a factoring company, that advances money using your invoices as collateral. The factoring company will usually advance about 80% of your outstanding invoices. This provides your company with the needed liquidity to meet important supplier payments. It also increases the speed at which you receive your revenues, which provides for smoother operations. Factoring transactions are settled once your customers pay in full, at which time you get the remaining 20% less a factoring fee.

One important advantage of factoring is that your customers are not required to pay any sooner. They can keep paying on their usual schedule. It enables you to offer terms with confidence, while still getting most of the benefits of a quick payment. Additionally, accounts receivable factoring have simpler collateral requirements than most bank financing lines. The most important requirement is to have credit worthy commercial customers. This is very important because the factoring company uses your invoices to secure the transaction. Additionally, your company should be well run and not have major legal or tax problems

One important advantage of invoice factoring is that the financing line is flexible and will adapt to your business growth. Your financing will increase as your sales grow, as long as your company makes sales to credit worthy customers. This feature is seldom found in other business financing programs. This makes invoice factoring an attractive option for growing retail food brokers that are challenged by slow paying invoices.

Filed Under: Wholesale Distributors

Financing a Contract Food Service Company in Canada With Factoring

May 3, 2012 By

While getting a food service contract from a large customer can have a number of advantages, it can also have drawbacks – especially if your company is small, growing, or not well capitalized. Most large commercial customers will often negotiate 45 day payment terms into their contracts. This means that your food service company has to cover all food, payroll, and equipment expenses of delivering the service and then wait an additional 45 days before you get paid for your invoice. Most large food-service companies have substantial cash reserves (or lines of credit) that can be used to cover expenses while waiting for payments. However, this can create serious challenges for smaller companies that don’t have access to conventional bank financing.

One way to solve this working capital problem is to use factoring financing. Factoring enhances your existing financial resources by accelerating the revenues that are tied to slow paying invoices. Basically, a factoring company advances funds to your food service company using your invoices as collateral. This provides your company with the working capital it needs to cover critical operating expenses. It also provides a financial foundation of stability that can be used to take on new customers because it minimizes the worries about slow payments.

Factoring transactions are structured as the purchase of your invoices in two installments. A factoring company advances about 80% of your outstanding invoices as soon as the work is completed and accepted by your customer. Your company gets the second installment, which is the remaining 20% (less any factoring fees), as soon as your customer pays their invoice in full. It’s important to note that your customer is not required to pay any sooner – they just pay on their regular schedule.

Since your invoices are acting as collateral for the transaction it’s important that the invoices that you finance are payable by credit worthy commercial customers. In effect, your invoices are the most important collateral for the transaction. However, having good customers is not the only requirement to qualify. Your company should also have good invoicing practices, be free and clear of major tax or legal issues, and be managed by owners that have industry experience.

One advantage of invoice factoring over conventional business loans is that invoice factoring lines are flexible and tied to your sales. This means that your factoring line can increase as your sales grow. This makes invoice factoring an ideal source of financing for growing companies with cash flow problems due to slow paying clients.

Filed Under: Business Services

Financing a Uniform Rental Company in Canada with Factoring

May 3, 2012 By

Uniform rental companies are notorious for having a high turnover in their cash flow. They have constant demands on their working capital to cover equipment, garments, uniforms, and payroll on an ongoing basis. Funds are flowing out to make these payments constantly. At the same time, most commercial rental customers demand payment terms and pay their invoices up to 45 days after the uniforms have been  delivered. This creates a situation where expenses are flowing out quickly while revenues are flowing in slowly. While the company can be profitable because revenues are bigger than expenses, it can also run into cash flow problems. Actually it’s not uncommon for profitable companies to have cash flow problems.

One way to solve this problem is to accelerate the speed at which revenues are coming into the company. While it’s very difficult to make customers pay faster, you can actually get a similar effect by using invoice factoring. Factoring your invoices provides your company with an advance on your slow paying accounts receivable, which provides your company with working capital that can be used to cover operations expenses. More importantly, it provides critical financial stability that enables you to take on new customers without worrying about their payment habits.

Most factoring transactions are funded by a factoring company who acts as an intermediary in the transaction. They finance your invoices from credit worthy customers, providing you with an advance as soon as the invoice is verified. The factoring company also settles the transaction once your customers pay their invoice on their regular schedule. This is one critical detail – your customers pay on their usual schedule and are not required to pay sooner. Factoring companies, on average, advance about 80% of your outstanding receivables. They provide the remaining 20%, less the financing fee, as soon as your customers pay and the transactions settles.

Getting a factoring line is comparatively easier than getting a business loan from an institution. Since the factoring company is financing your invoices and using them as collateral, it is very important that you only work with credit worthy commercial customers. This is perhaps the most important requirement to qualify, though it’s not the only one. Additionally, your company should have good invoicing practices, be free of serious legal or tax problems, and have an experienced manager or owner.

One important advantage of factoring your invoices is that the line is tied to your sales, and therefore tied to your company growth. This gives you a lot of flexibility and enables the line to increase as your sales grow. This makes invoice factoring an ideal source of funding for growing uniform rental companies that have working capital problems due to slow paying customers.

Filed Under: Business Services

Financing a Trucking Company In Canada Using Factoring

May 3, 2012 By

Most trucking companies have to offer their shippers or freight brokers up to 45 days to pay an invoice. This is a common business practice and trucking companies that want to remain competitive have  no other option but to offer payment terms to customers. However, trucking companies have their own operating expenses to pay while waiting for client payment. Companies usually handle this by paying their operating expenses out of their cash reserves and then replenishing those reserves when shippers pay their invoices. However, if your cash reserve is not large enough you could run into problems if  customers delay payments. Or worse, you may have to decline new customers because you simply can’t afford to offer the payment terms that they demand. Ultimately, the size of your cash reserve is one of the variables that determines how fast, if at all, your trucking company will be able to grow.

One way to solve this problem is to enhance your cash reserves with business financing such as freight bill factoring. Basically, freight bill factoring provides you an advance on your slow paying invoices.  This provides your transportation company with immediate working capital that can be used to cover important operational expenses such as paying drivers, buying fuel, and making repairs. When used correctly, a freight factoring line can provide financial stability and enable you to take on new customers without worrying about slow payments.

Most freight factoring transactions are structured as the purchase of your invoices in two installments. The first installment covers about 90% of the invoice value and is provided to your company as soon as the load is delivered and accepted. The remaining 10%, less the factoring fee, is provided once your shipper pays for the invoice in full. Shippers are not required to pay any sooner – they pay on their regular schedule. Because of this, integrating factoring into your business is relatively easy.

One key advantage of factoring is that you can leverage your customer base to your own advantage. It enables you to use the credit worthiness of your customers to grow your own business. Obviously, an important requirement to obtain factoring is to have credit worthy customers. Additionally, your company should have good invoicing practices, be free of legal and taxation problems, and be operated by knowledgeable individuals. Ultimately, getting a factoring line is comparatively easier than getting a conventional business loan.

Perhaps the most important advantage of a factoring line is its flexibility. Since the line is tied to your sales, it will grow as your sales increase. This enables you to use factoring as a growth tool. And because of this, trucking companies that have working capital problems due to slow paying customers can benefit from adding factoring to their operations.

Filed Under: Freight Factoring

Financing A Life Sciences Staffing Company In Canada Using Factoring

May 3, 2012 By

Most Canadian life sciences staffing companies operate on very tight cash flows. On the expense side of things, staffing companies have heavy payroll liabilities that have to be met on a weekly or biweekly basis. However, on the revenue side, most customers pay their invoices on the net 45 basis. This means that the staffing agency has to wait up to 45 days to get paid and therefore has to cover all expenses using its cash reserves. This can create problems for companies that have small cash reserves –  a few late payments can leave the company without working capital. If this situation is not handled appropriately, it can blossom into a full-fledged cash flow problem.

One way to solve this problem is to enhance your existing cash reserves using a factoring financing line.  Factoring invoices solves this problem by accelerating the revenues that are tied to your slow paying invoices. Your customers are not required to pay any sooner – rather a financing company advances funds using your invoices as collateral. The transaction is completed once your life science customers pay their invoices on their usual schedule. When used correctly, a factoring line can enhance your cash flow and ensure that you always have cash on hand to meet payroll expenses. Perhaps more importantly, it also provides financial stability and allows you to take on new customers with confidence.

In Canada, the most important requirement to qualify for factoring is to have credit worthy commercial customers. As a matter of fact, factoring is one of the few financing solutions that enables you to leverage your customers credit to grow your business. Additionally, your staffing agency should also meet the following criteria:

  • You can only finance invoices for completed work
  • Your company cannot have legal or tax problems
  • Your invoices cannot be encumbered

One advantage of working with a factoring company is that your financing solution will be flexible and scalable. Your funding line can increase alongside your sales as long as your customers have good commercial credit. This makes invoice factoring a great solution for growing life sciences staffing companies that have cash flow problems due to slow paying customers.

Filed Under: Business Services

Freight Factoring Financing For Trucking Companies

April 6, 2012 By

Most trucking company owners focus most of their efforts on running operations rather than on managing their cash flow. This is understandable since they have loads to deliver, fuel to buy, drivers to pay, and repairs to make among all the tasks that call for their attention. And all these are critical for the success of the company. The problem is that if you don’t manage your cash flow properly you can run into problems very quickly. And these problems tend to escalate into a full-blown crisis if not handled correctly.

Most cash flow problems in trucking companies stem from the fact that your customers pay their invoices in 30 to 60 days. However you have a number of immediate expenses that you need to cover, which leaves you right in the middle of a tug-of-war between revenues and expenses. Managing this tug-of-war is crucial if your business is to succeed.

One way to handle this situation is to ask customers for quick pays. Many customers will comply if you give them an  appropriate incentive such as a 2% discount if they pay in less than 10 days. However, this ultimately leaves your cash flow at the mercy of your customers who could choose to pay slowly at any time. For many trucking companies, a better solution is to finance their invoices with freight factoring.

Freight factoring offers a very simple solution. A finance company provides funding for your trucking company using your slow paying invoices as collateral. This provides your company with immediate cash flow while minimizing the problems associated with slow paying customers. Most freight bill factoring transactions are funded in two installments. The first installment covers about 90% of your outstanding invoices and is provided to your company as soon as the load is delivered. The second installment covers the remaining 10%, less a factoring fee, and is disbursed once your customers pay your invoices in full. Please note that your customers pay their invoices on their regular schedule and are not required to pay any sooner.

The most important requirement to qualify for freight bill factoring is to have credit worthy shippers or brokers. This is very important because the factoring company is using their credit as collateral to finance your transaction. Additionally, your transportation company should also:

  • Invoice only for delivered and accepted loans
  • Have unencumbered invoices
  • Be free of serious legal or tax problems

One of the advantages of factoring is that the financing line is designed with growth in mind. This means that your factoring line will grow as your sales increase, as long as your customers and your company meet the factoring criteria. This makes factoring an attractive solution for trucking companies that are growing and have cash flow problems due to slow paying customers.

Filed Under: Freight Factoring

Financing An Oilfield Services Company With Factoring

April 5, 2012 By

One of the advantages of working for the oil and gas industry is that most customers have excellent commercial credit and are very good payers. The problem however, is that they pay their invoices on net 30 to net 60 day terms. While oilfield services companies that have financial reserves can easily afford to wait up to eight weeks for payment, most small companies can’t. They need to be paid sooner so that they can pay their own expenses. This creates a serious challenge for some companies because most oil and gas customers will demand to be given payment terms as a condition of doing business with you. This means you can either extend payment terms and risk financial problems or not extend payment terms and risk losing customers. Neither of these options is good.

One way to get around this problem is to use business financing. This enables you to cover your operational expenses while waiting for your customers to pay. However, getting business financing in Canada can be very difficult. Lending institutions usually demand substantial collateral, impeccable financial statements, and the long track record of successful operations. Few small or midsize oilfield services companies meet this criteria, which leaves them out of the game. Fortunately, there is a new business financing option that has been gaining traction in recent years. It’s called invoice factoring and it solves the problem of slow paying customers.

Invoice factoring accelerates the revenues that are tied to your slow paying invoices from credit worthy customers. The transaction works using a financial intermediary called a factoring company. The factoring company advances funds to your company while using your invoices as collateral. Transactions are then settled on an ongoing basis as your customers pay their invoices. Please note that your customers pay their invoices on their regular schedule and do not need to pay any sooner.

The most important requirement to qualify for factoring is to have credit worthy customers. Fortunately the oil and gas industry is doing very well  and most customers have good credit. Additionally, your company should also meet the following criteria:

  1. Your receivables should be unencumbered
  2. Your company should not have serious legal or tax problems
  3. Company owners must have a good reputation and industry experience
  4. Your company should only invoice for products or services that have been delivered and accepted

One important difference between factoring invoices and other solutions is that invoice factoring lines can increase automatically as your sales grow. This makes it an ideal product for oilfield services companies that are growing but have cash flow problems due to slow paying customers.

Filed Under: Oil and Gas

Financing An Oilfield Transportation Company With Invoice Factoring

March 30, 2012 By

The past few years have been very good for the oil and gas industry in Canada. The industry has grown substantially, which in turn has helped the Canadian oilfield transportation services sector. Most oilfield fluid transportation of salt water disposal companies have seen a substantial  increase in demand. While this is good, it has also brought its own set of challenges – especially financial challenges. Most oil and gas companies pay their invoices of 30 to 60 days. This can be a problem for companies that don’t have the financial resources to wait and need a faster payment, so that in turn they can pay their own expenses. If this cash flow situation is not managed correctly, it can put the company into a financial tailspin. Ultimately, companies are faced with the following dilemma: they risk financial difficulties if they offer terms and the risk losing customers if they don’t.

One way to solve this problem is to use business financing to manage expenses while waiting for customers to pay. While getting conventional business financing can be very difficult, there is a solution that has been gaining traction in the industry. It is called invoice factoring. Factoring accelerates the revenues that are tied to slow paying invoices. This provides your company with immediate working capital to cover its expenses while minimizing the worries associated with slow paying customers.

Factoring works by partnering with a factoring company, which advances funds to your oilfield transportation company while using your invoices as collateral. They also settle transactions once your customers pay in full. Most transactions are structured using two installments. You get the first installment, usually between 80% and 90% of your outstanding invoices, as soon as the work is completed and accepted by your customer. You get the remaining 10% to 20% (less the factoring fee)  as a second installment, when  your customers pay in full.

One important difference between factoring and other business financing solutions is its flexibility. Factoring financing lines are designed with growth in mind and will increase alongside your sales, as long as your company and your customers meet the factoring criteria. This makes invoice factoring an ideal solution for growing oilfield transportation companies that have cash flow problems due to slow paying customers.

Filed Under: Oil and Gas

Financing For Commercial Landscapers Using Factoring

January 31, 2012 By

One common problem for commercial landscaping companies in Canada is that corporate customers usually pay their invoices in 30 to 60 days. However, the landscaping company has a number of expenses that need to be paid regularly.  This forces the landscaper to cover its expenses out of its own reserves while waiting for customers to pay. This can be a substantial problem for small and growing landscaping companies that have not had the opportunity to build cash reserves. When left unchecked, this problem can grow and create a serious working capital shortage. One way to fix this problem is to accelerate revenues using factoring financing.

Factoring solves this problem by advancing funds against the landscaping company’s invoices. A factoring company handles the advance and holds the invoices as collateral. This provides the commercial landscape company with the working capital it needs to meet expenses and handle growing opportunities. The transaction is settled once the invoices are paid on their regular schedule.

One of the advantages working with a factoring company is that they are used to working with companies that have cash flow problems and therefore offer plans that are more accessible that conventional finance products. The most important requirement to qualify for invoice factoring is to have customers with good commercial credit. This is critical, because your customer’s credit and ability to pay invoices is the collateral for the transaction. Aside from that, your company must also:

  • Be free of legal and tax problems
  • Invoice for completed work
  • Have no encumbrances on its invoices
Perhaps the most important benefit of invoice factoring is that the funding line can grow dynamically with your revenues. This means that your funding line can accommodate growth, as long as your customers are credit worthy and as long as your company meets the factoring company’s funding criteria. Because of this, factoring is an ideal solution for growing Canadian landscaping companies that have growth opportunities that are hindered by working capital problems.
Filed Under: Construction

Financing Food Service Companies Using Invoice Factoring

January 31, 2012 By

Most companies in the food service industry that work with corporate accounts are used to the fact that corporate clients always demand net 30 to net 60 day payment terms. While this is a common business practice in Canada it also poses a serious challenge to small and growing food service companies that can’t afford to wait that long to get paid. Unless properly managed, this situation can lead to working capital problems that eventually spiral out of control. One way to help address this problem is to use invoice factoring financing.

Invoice factoring solves this problem by providing an advance on your slow paying invoices from credit worthy corporate customers. This gives your company the working capital it needs to meet critical business expenses and relieves the pressure of dealing with slow paying customers. The transaction is structured using a financial intermediary called a factoring company. The factoring company advances the funds to your company while holding your accounts receivable (invoices) as collateral. They settle the transaction once your customer pays in full on their usual schedule.

Qualifying for factoring is easier than qualifying for other business financing products. The most important requirement is that your customers must have good commercial credit. This is critical because the whole transaction is based on your customers ability to pay your invoices. Aside from that, your company must also meet these requirements:

  1. Your invoices must be for completed services
  2. Your invoices must be free of encumbrances
  3. Your company must not have legal or tax problems
One of the advantages of using factoring financing is that the funding line can grow with your revenues, provided that you are selling to credit worthy customers and provided that you meet the factoring criteria. This makes factoring an ideal solution for growing Canadian food service companies that have great opportunities constrained by working capital problems.
Filed Under: Business Services

Financing Freight And Trucking Companies Using Invoice Factoring

January 31, 2012 By

Managing cash flow can be very challenging for Transportation companies. This is because unless you have a quick pay agreement, most shippers will pay their invoices in 30 to 60 days. On the other hand, you have expenses, such as driver salaries, fuel, and repairs,  that need to be paid sooner than that. This can create a problem for freight and trucking companies that don’t have a large enough cash reserve to cover these expenses while waiting. If left unchecked, these cash flow problems can prevent the company from growing, or worse, send it into an unrecoverable financial tailspin. One way to solve this problem is to use freight bill factoring.

Freight factoring is a form of financing where a factoring company advances funds to your trucking company using your invoices as collateral. This provides you with the working capital you need to run your business and minimizes the problems created by slow paying customers. Most factoring financing facilities are used on an ongoing basis to help alleviate working capital shortages.

One advantage of factoring over other forms of business financing is that it’s comparatively easy to obtain. The most important requirement is that your customers must have good commercial credit. This is because your invoices that are payable by them are the collateral that backs the transaction. Aside from that, your company must meet these requirements:

  • Your invoices must be free of encumbrances
  • Your company must be free of legal and taxation problems
  • Your invoices must be for delivered loads
Perhaps the biggest benefit of working with a factoring company is that their financing products are flexible and can adapt to your growing revenues. This makes invoice factoring an ideal solution for growing Canadian trucking companies that have great opportunities that are hindered by working capital problems.
Filed Under: Freight Factoring

Financing For Freight Forwarding Companies Using Factoring

January 31, 2012 By

Most freight forwarding companies that work with commercial accounts usually have to wait up to 60 days to get paid by customers. Offering payment terms is a common practice in Canada and large corporate customers usually demand – and expect – to get them. This can be a problem for smaller freight forwarders that don’t have the financial resources to wait to get paid because they need funds to meet their own obligations. One way to deal with this problem is to use a form of financing known as freight bill factoring.

Freight bill factoring solves this problem by accelerating revenues that are tied to slow paying freight bills. It works by having an intermediary financing company, called a factoring company,  advance funds to your freight forwarding company using your invoices and freight bills as collateral. The transaction closes once your customers pay on their usual schedule.

One of the advantages of freight factoring is that it’s easier to obtain than most common business financing products. To qualify, your company must work with credit worthy shippers. This is critical because the creditworthiness of your shippers is what the factoring company is relying on. Aside from that, your company must meet these requirements:

  • Your invoices must be for delivered loads
  • Your invoices must be free of encumbrances
  • Your company must not have any legal or tax problems
The most important benefit of freight factoring is its flexibility. Most factoring plans are designed to be dynamic and can grow with your revenues, provided that your sales are to credit worthy customers and provided that your company meets the factoring criteria. This makes factoring financing an ideal solution for growing Canadian freight forwarders that have solid growth opportunities that are being hindered by cash flow problems.
Filed Under: Freight Factoring

Financing Janitorial Companies Using Invoice Factoring

January 27, 2012 By

One of the biggest challenges for growing janitorial companies is waiting for customers to pay their invoices, since it’s a common practice in Canada to offer payment terms to  large companies. Janitorial companies have to offer terms in order to remain competitive since  large corporate customers usually demand them – and expect them. The problem is that smaller janitorial companies cannot afford to offer payment terms. They need to be paid sooner so that they can meet their own expenses – namely payroll and supplies. One way to solve this problem is to use a financing tool known as invoice factoring and discounting.

Invoice factoring enables you to monetize your slow paying invoices. The transaction is structured through a factoring company that advances funds to your company while holding your invoices as collateral. The transaction closes as soon as your customers pay. This provides you with the working capital you need to pay expenses and take on new clients. Most factoring transactions are structured as follows:

  1. Your company sends a copy of the invoice to the factoring company
  2. The factoring company makes an initial advance of 80% (this varies)
  3. Your customer pays the invoice (after 30 or 60 days)
  4. The factoring company advances the remaining 20%, less fees
Qualifying for factoring is easier than qualifying for other types of business funding. The most important requirement is that your customers must have good commercial credit. This is very important because the whole transaction hinges on their ability to pay. Aside form that, your company must meet this criteria:
  1. Your invoices must be free of encumbrances
  2. Your company must be free of legal and tax problems
  3. Your invoices must be for completed work
One important advantage of factoring financing is that the funding line is flexible and can grow with your business, provided your customers have good commercial credit. This makes factoring financing an ideal financing solution for Canadian janitorial companies that have growth opportunities that are challenged by cash flow problems.
Filed Under: Business Services

Financing Software Services Companies Using Invoice Factoring

January 27, 2012 By

Waiting up to 60 days to get paid by customers is fairly common in the software industry, especially if the customer is a large corporation. This can create a problem for small software service shops that don’t have the financial resources to handle their operational expenses while waiting for payment. One way to solve this problem is to use invoice factoring.

Factoring enables your company to offer payment terms to your customers while minimizing the impact of slow payments. It works by partnering with a factoring company, who advances funds against your invoices while holding them as collateral. This gives your software company the funds it needs to meet it’s payroll and operational expenses. The transaction closes once your customers pay their invoices in full.

Qualifying for a factoring financing line is relatively easy when compared to other business financing solutions. The most important requirement is that your customers must have good commercial credit. This is important because their credit and their ability to pay invoices are the main collateral for the transaction. Additionally, your company must meet this criteria:

  • Invoices must be for delivered and accepted projects
  • Invoices must be free of encumbrances
  • Your company must be free of legal and tax problems
One of the advantages of working with factoring companies is that they are used to working with small companies. Most factoring lines are designed to be flexible and can grow dynamically with your revenues, provided that your sales are to customers with solid credit. This makes factoring an ideal solution for Canadian software service companies that have growth opportunities that are being challenged by cash flow problems.
Filed Under: Technology

Financing Hydraulic Equipment Supply and Repair Companies Using Factoring

January 27, 2012 By

Most companies that handle industrial sales and service of hydraulic equipment usually have to sell their products and services on credit. Basically they have to give their customers between 30 and 60 days to pay their invoices. This is a common business practice in Canada and hydraulic product suppliers that want to remain competitive usually have to offer terms. However, this can create a problem for some hydraulic suppliers that don’t have the financial resources to be able to wait that long to get paid. In this case, companies can mitigate the effects of slow paying invoices by using a form of business financing called invoice factoring.

Invoice factoring solves this problem by providing an advance on your slow paying invoices from credit worthy commercial customers. The factoring company holds your invoices as collateral and provides the funding you need to pay your operational expenses and obligations. The transaction is settled once your customers pay their invoices in full. Note that your customers don’t need to pay sooner and they pay on the regularly scheduled dates.

The most important requirement to qualify for factoring is to have customers with good commercial credit. This is critical since your customer invoices are the collateral that is used for the funding transaction. Aside from that, your company must also meet these criteria:

  • Your invoices must be for completed and delivered sales
  • Your invoices must be free of encumbrances
  • Your company must not have any legal or taxation problems
One of the biggest benefits of using factoring is that your financing line can easily grow with your sales, provided your customers have good credit and provided your company meets the criteria for factoring. This makes factoring an ideal solution for Canadian hydraulic equipment supply and repair companies that have growth opportunities that are challenged by cash flow problems.
Filed Under: Industrial

Financing Technology Staffing Companies With Factoring

January 27, 2012 By

One common problem for technology staffing firms in Canada is that customers usually pay their invoices in 30 to 60 days. However, the staffing agency needs to pay its own employees every week (or two weeks). Basically, the agency has to cover expenses out of its own reserves while waiting for customers to pay. This can be a substantial problem for small and growing technology staffing agencies that have not had the opportunity to build cash reserves. One way to deal with this problem is to use invoice factoring for staffing agencies.

Factoring solves this problem by using a financial intermediary, called a factoring company, that advances funds using your invoices as collateral. This gives your staffing agency the funds it needs to meet payroll, while the factoring company holds the invoices until payment. When used correctly, an invoice factoring line can alleviate cash flow problems, and help ensure that the staffing agency has enough cash at hand to meet its obligations.

One of the  biggest advantages of factoring financing is that it’s relatively easy to get. The most important requirement is that you commercial customers must have good credit. This is critical because in effect, their credit is the main collateral that you are using for the transaction. Aside from that, your company must also meet these requirements:

  1. Your invoices and time cards must be for completed work
  2. Your invoices must be free of encumbrances
  3. Your company must not have any tax or legal problems
Perhaps the most important benefit of a factoring financing line is that your funding facility can increase dynamically and adapt to your revenue growth. This makes factoring financing an ideal solution for Canadian technology staffing companies that have great growth opportunities but are challenged by cash flow problems.
Filed Under: Staffing Agency Factoring

Financing Food Service Companies With Invoice Factoring

January 26, 2012 By

Most food service companies have to give their commercial customers up to 60 days to pay their invoices. While this is a common business practice in Canada, few food service companies can afford to wait that long to get paid. They have a number of operating expenses that need to be paid, usually quickly. Larger companies handle this situation by building a cash reserve that can be used to cover expenses while waiting. Smaller companies usually don’t have a cash reserve and tend to run into cash flow problems. One way to solve this problem is to use factoring financing.

Invoice factoring can help companies that have cash flow problems by providing an advance on their slow paying invoices. A financial intermediary, called a factoring company,  provides the advance and holds the invoices as collateral. The transaction closes once the invoices are paid by your customer.  Note that your customer pays their invoices on their usual schedule.

Most food service companies that use factoring, use it as a revolving financing line. This  helps ensure that the company has enough cash on hand to meet its obligations. One of the advantages of factoring invoices is that it’s comparatively easy to obtain. To qualify for funding, the food service company must meet this criteria:

  1. Commercial customers must have good credit
  2. Invoices must be for completed work/product
  3. Invoices must not have any encumbrances
  4.  The food service company must not have any legal or tax problems
One important benefit of factoring financing is that the financing line is designed to increase as your revenues from credit worthy commercial customers grows (and as long as your company meets the funding criteria). This makes factoring an ideal solution for Canadian food service companies that have growth opportunities that are being affected by cash flow problems.
Filed Under: Business Services

Financing Software Development Companies With Factoring

January 26, 2012 By

Most software development companies that work with Canadian corporate customers have to wait up to 60 days to get their invoices paid. This can put a serious strain in the company’s cash flow because few businesses can wait that long to get paid. They need the money sooner to be able to cover payroll and other critical expenses. Larger companies don’t have this problem because they have cash reserves that can be used to cover expenses while waiting. Smaller companies usually don’t have reserves, which leaves them at a disadvantage. One way to solve this problem is to use invoice factoring.

Invoice factoring provides operational financing to your company using your invoices as collateral. A financial intermediary, called a factoring company, advances funds to you software development company and holds your invoices as collateral. This provides your software development firm with the money it needs to cover important operational expenses. The transaction closes once your customers pay their invoices. Note that your customers still pay on their regular payment schedule.

One of the advantages of using invoice factoring is that it’s easier to obtain than other sources of funding.  To qualify, your company needs to meet the following criteria:

  • Your customers need to have solid commercial credit
  • Your invoices need to be for completed work – or completed project segments
  • Your invoices need to be clear of encumbrances
  • Your company needs to be free of legal and tax issues

The most important benefit of using factoring financing is that the funding line is flexible and can grow with your business – provided that your customers have good commercial credit and provided that your company meets the funding criteria. This makes factoring an ideal solution for growing Canadian software development companies that have good growth opportunities but also have cash flow problems.

Filed Under: Technology

Financing I.T. Companies With Factoring

January 26, 2012 By

Most Information Technology companies need to give their commercial customers up to 60 days to pay their invoices. Offering payment terms is a common practice in Canada and most businesses do it as a way to remain competitive. However, this puts small and growing businesses that can’t afford to wait to get paid at a disadvantage. In many cases, some I.T. companies will simply not pursue certain clients because they can’t offer the terms they demand. For many companies, a better solution is to use invoice factoring.

Invoice factoring helps companies with cash flow problems by accelerating the revenues that are tied in slow paying invoices. Your customer does not have to pay sooner though. Rather, a factoring company  advances funds to your I.T. company and holds your invoices as collateral for the transaction. The transaction settles once your customers pay in full. Most Information Technology companies that use factoring financing  use it on a recurring basis to ensure that they always have funds at hand to pay for salaries and other critical business expenses.

One of the advantages of factoring financing over other forms of funding is that it’s easier to obtain. To qualify for factoring, your company needs to meet these criteria:

  • Invoices must be for completed work
  • Invoices must be free of encumbrances
  • Your company has to be free of legal/tax problems
  • Your customers must have good commercial credit
The biggest advantage of factoring financing is that it enables your company to leverage your customer’s credit to your advantage. Furthermore, the financing line can also grow with your sales, provided that your company meets the funding criteria. This makes invoice factoring and ideal solution for Canadian I.T. companies that are growing and need funding to overcome their cash flow hurdles.
Filed Under: Technology

Factoring For Canadian Delivery Service Companies

January 25, 2012 By

One of the biggest financial challenges for delivery service companies in Canada is that most commercial customers pay their invoices in 30 to 60 days. This can create a problem for small and growing delivery companies that need funds sooner to be able to pay company expenses – such as payroll, vehicle repairs, fuel, and supplies. One alternative is to ask the customer for a faster payment, however, this strategy can backfire if the customer refuses to pay sooner. Another alternative that has been gaining popularity is to use factoring financing.

Invoice factoring solves this problem by providing you with an advance on your slow paying invoices. This gives your company the funds it needs to operate and relieves the pressures created by slow paying customers. The transaction works using a financial intermediary called a factoring company, that advances funds for your invoices and holds them as collateral. Most delivery service companies that utilize factoring use it as a revolving financing line that can be deployed at any time, ensuring that funds are always available to meet expenses.

Qualifying for factoring is relatively easy. Your company needs to meet the following criteria:

  • Your invoices must be free of encumbrances
  • Your invoices must be for completed deliveries
  • Your company must be free of legal and tax problems
  • Your customers must have good commercial credit
One advantage of invoice factoring is that it leverages the commercial credit of your customers.  Because of this, your financing to grow with your sales provided that your company meets the funding criteria. This makes factoring an ideal solution for growing Canadian delivery service companies that have cash flow problems.
Filed Under: Freight Factoring
« Older Posts

(877) 300 3258 - Toll Free - Canada
Copyright (c) 2007- 2012 by Commercial Capital LLC

CanadaFactoring Canada USAFactoring USA