Invoice Factoring vs Credit Card Factoring

I came across a blog for aromatherapy providers with a post about the type of factoring called ‘invoice discounting.’  The gentleman who wrote it is from the UK – but it sounds as though they do things very similarly over there.

Anyway, a few things caught my eye and I wanted to go over them:

“Invoice discounting …. can dramatically improve your cash flow by releasing money as soon as you have completed an order and raised an invoice rather than having to wait for your customer to pay. This makes them ideal for funding growth.”

If this is “ideal for funding growth” because money is released as soon as you have completed an order – then credit card factoring must be “superideal” – because you don’t have to wait for that order.  We advance cash to businesses based on their PAST credit card sales.

“The amount you can borrow grows in line with sales and it is often possible for you to repay bank facilities and release previously pledged security.”

This is also true with the type of credit card factoring / business cash advance factoring that we do at Fast Up Front; we do have limit on the amount you can borrow, though: $250,000.

Some points that Mr. Courtney did not bring up include: paperwork, time it takes to get approved, and the involvement of your clients and customers with your creditors.  These are all issues you may want to research before going the route of invoice factoring.  I know that in credit card factoring, we NEVER contact your clients, we provide approval within 24 hours, and there is minimal paperwork.  I believe that these are major issues which makes credit card factoring much more attractive to our customers.

To read the article referenced above: Post on Invoice Factoring 

2 in 1 – Credit Card Processing & Factoring

Now, because I work in the credit card factoring/business cash advance business, it is not surprising that I love reading about different ways in which this form of financing can be beneficial to our customers.

Last week I came across an article (tagged for pizza restaurants, but true for any of our clients) about how credit card factoring programs can reduce credit card processing costs and problems.

The guy who posted it pointed out that not only can credit card factoring help with cash flow (which is why most people turn to us)  – but that a factor can often help their clients get the most efficient credit card processing in addition to getting them cash when they need it most. 

For more info about services that Fast Up Front offers in this capacity, you can contact us through our credit card factoring company website.

Getting a Loan – Customer or Salesman?

I just finished reading a long article for small business owners about how he/she needs to prepare for the meeting with a banker when requesting a loan.  It goes over Cash Flow, Balance Sheet, Collateral, etc, etc.  And it tells the business owner to “…remember the old sales adage, ‘Fail to prepare; prepare to fail.'”

It made me wonder who the customer is in this sort of transaction.  Now I do know that banks need to be secure in the knowledge that they’ll be repayed, but I also feel they shouldn’t make their CUSTOMERS feel like their customers are doing a SALES call.  Give me a break….

Now this being said, I’m a bit biased, coming from a different part of the financing sector.  I work with FastUpFront – and we manage to be able to finance pretty much any small business, without even seeing a balance sheet, or talking about collateral.  For more info see our page on business cash advance  or read my posts on the subject.

End of Year Tax Questions in a Slow Economy

An interesting thing that many small business owners are thinking about as December begins the end of the year: taxes.  Now, I know that is not exactly an odd thing to think about near the end of the year – but as a recent tax-related article I read pointed out, this year is different.  Why?  Because of the lousy economy.

To summarize: because business was bad for many businesses, less businesses are looking for deductions.  Some are even considering putting off year-end bonuses until January. 

One CPA in Florida put it simply, “If you’re going to have a loss or break even, [shopping for a Section 179 deduction] is going to be useless.

If you ARE having cash flow issues, one solution which does not show up on taxes as a loan, is a business cash advance.  This form of financing is quick, gets you cash you might need to purchase inventory for the holidays or other expenses, and (as previously stated) does not show up on taxes as a loan. 

Find out more about this financing option (and how it might help you solve your tax issues). 

Helping Business Owners Get The Right Financing!

The business cash advance is a great alternative loan product that many business owners are cashing in on. The biggest problem with the business cash advance is that most business owners don’t even know they exist.

Many people who apply for business cash advances on our website have never heard of advance until reading our site’s content. That means that most business cash advance customers are referred to us by other customers who have benefited from the advance or stumble across us on the internet while searching for a traditional loan product.

In an effort to help business owners seeking financing understand the difference between our business cash advance and some of the traditional loan products they are searching for – we have added a few more pages to our site to help outline the advantages of a business cash advance compared to the traditional business loans available through banks and lending institutions.

Small Business Success Depends on Flexibility

When it comes to small business, success is usually connected to flexibility- in other words, how well can the business adapt and change to the demands of its market.

But what makes a business flexible?

Small business flexibility really boils down to three things:

  1. Available working capital: This is one of the biggest challenges for small businesses, especially if they have just started up or are seasonal. Businesses may want to consider alternative forms of financing, such as equipment leasing or invoice factoring. When working capital is available then the company is in a better position to respond to changing market conditions.
  2. Reinvestment in the business: An increase in working capital also means that money can be directed back into the business. Investing in equipment upgrades, or offering more services or products according to market demand, helps to ensure that you will maintain your competitiveness, especially in volatile markets.  
  3. Knowing your market: Stay in touch with your market by talking to your customers. You will not only be able to respond to demand, but you will also be able to anticipate future trends.

In short, if you are running a small business, the key to success is creating flexibility in the way you operate and in the vision you have for your company… so start stretching!

Business Articles on FastupFront

In addition to small business and business finance information provided in this blog section of FastUpFront, we are pleased to announce that our Business Articles section has been expanded to include a wide variety of business articles that are not just focused on small business financing.

The Business Articles section taps into various topics such as business tips, business strategy, business resources, industry and sector specific information for large and small business; and of course financing! 

Missing the cash flow to improve your cash flow?

Existing businesses seeking business financing have a harder time than start-ups, in securing a business loan. Entrepreneurs in search of start-up capital for their businesses can invent favourable figures in their projections used in convincing the bank to provide financing. A business owner looking for additional financing for his already established business does not have that luxury.

The bank wants to see cash flow figures. But lets face it, your looking for financing because you are in a cash flow crunch. Unfortunately the bank does not want to get involved in a risky deal. There might be a lot of potential for your business but it’s hard for the bank to ignore that your receivables have not been steady and your development costs, overhead, and incurred debts are discouraging. At this point, if the banker chooses to continue the meeting, your business plan comes into question. So what’s the plan? Are you there to expand or survive? Many businesses need additional financing just to survive. But the bank has little trust and hates to gamble, so convincing the bank to get involved in your struggling but highly potential venture is never an easy job.

The good news is that financing is available. Businesses, regardless of credit or a positive balance sheets, can utilize a business cash advance as an alternative to business loans or other traditional small business financing options. The application process is very simple, transfer of funds is fast and the only determining factor for approval is the volume of credit card sales your business does per month.

If your business processes more than $2500/per month in credit card sales, get a fast cash injection up to $250,000 and improve your business cash flow situation with an unsecured business cash advance from FastUpFront!

Top 3 Reasons Businesses Sell their Receivables.

Lets face it, if a business did not have to, it wouldn’t sell its’ receivables. Yet receivable factoring, in the form of invoice receivables factoring or a business cash advance (credit card factoring) is a very common and widely used financing option for small to large sized businesses.

Although there can be many reasons why a business would seek financing (improvement/change, growth, or survival), here are the top three reasons why businesses choose to sell receivables as a means of financing.

Lack of Security

Bank loans and other secured financing options are not always suitable for businesses that lack security/assets or have already overextended their mortgages (personal or business). Selling receivables depends on the value of future sales and is therefore unsecured.

Bad Credit

Many small and large businesses live with bad credit scores. Bad credit may not hinder a business’s day to day operations but can hurt a business’s borrowing potential as lenders focus on credit ratings as an indicator of risk. Credit card factoring in the form of a business cash advance is not dependant on the business owner’s personal or business credit, making it an attractive option for owners with less than perfect scores.

Quick Approval and Delivery of Funds

Loans take time! Most financing options require a business plan with historical financial reports in the application process. Lenders then assess the application carefully investigating of a multitude of factors. Approval for traditional financing can take weeks, and the transfer of funds even longer. A business cash advance is fast! Businesses can be approved for a business cash advance of up to $250,000 in less than 24 hours and funds transferred within days. For businesses in need of a quick business loan alternative – selling receivables is the best  option (regardless of credit).