How A Commercial Factoring Arrangement Can Benefit Your Business
Cash flow is vital to the success of many businesses. This is especially true for small businesses, new businesses, and businesses that are rapidly growing. This is where United Capital Funding comes into the picture. A commercial factoring arrangement with UC Funding is a type of financial transaction in which we are able to turn your B2B and B2G Accounts Receivables into working capital so that you can continue to seek new clients for your B2B and B2G business, rather than worrying about cash flow problems. If this is something that you think could be beneficial to your business, get a quick quote now or keep reading to learn more!
Event Recap: December 2018 to January 2019
United Capital Funding ushered in the New Year appearing across the southeast United States, sharing expert advice for entrepreneurs and building relationships with local businesses. Here’s where we were in December 2018 and January 2019.
How Does Factoring Work?
If you’re a business owner, you’re likely familiar with a variety of funding options—loans, borrowing, investing, credit, and grants. All these have positives and negatives, depending on your company’s specific needs. Factoring is another excellent option for businesses of all sizes in a variety of industries. Many companies find the downsides are very few compared to other funding sources. But how does factoring work?
Small Business is BIG Business in the United States
As a professional firm that provides equitably priced and structured working capital to B2B and B2G clients nationwide, we are always looking for ways to educate our partners, clients and referral sources about the ever-increasing role of small businesses in the United States. The more we understand the needs and concerns of the entrepreneurs who own and manage these businesses, the better we can serve and help them grow and succeed.
Questions To Ask Your Factoring Company
With something as important as your business’s finances, you want to understand every aspect of it. That’s why it’s always important always to ask any question you might have. Here are a few questions to ask a potential factoring company to ensure they’re the right fit for you.
How A Small Business Uses Factoring Loans
So, What Exactly Are Factoring Loans?
Loan factoring is also called invoice factoring. It’s sometimes referred to as selling your accounts receivables. Whatever the vocabulary, factoring involves a third-party factoring company purchasing your unpaid invoices. The factoring company typically pays you 80-90% of the accounts, then take over full responsibility for getting that payment. Once they get paid, they pay you the rest, charging a small fee.
Factoring Loans for Small Businesses
Many types of small businesses find partnering with factoring companies useful. Cash flow can often be hard to come by in small businesses. They often don’t have a lot in their liquid assets accounts and that can be for a variety of reasons. If a business is new and establishing itself, it’s having to make plenty of payments while growing its customer base. Maybe a small business just started hiring its first employees. Or, when trying to follow the mantra “you have to spend money to make money,” it needs to invest in marketing or advertising. Honestly, almost any business with accounts receivables could sell them to a factoring company. Certain types of businesses—big or small—can find it especially helpful.
Small Businesses That Love Factoring
Government Contractors: It’s a big deal when small or medium-sized businesses win government contracts. It’s a real “we made it!” moment. But all the bureaucratic red tape can take a while for your checks to come in. Government agencies can also require businesses to do much of the work before they even begin processing payments. Using a factoring company means you can get your money on your schedule, not the government’s.
Business-to-Business (B2B): Providing services to other businesses is known as business-to-business or B2B. It’s often a great model for a company, especially if you provide specialized or technical services. But, it can often lead to a stagnated cash flow. Your business might be on a 30-day billing cycle when your customer is on a 60- or 90-day cycle. Factoring loans can meet you in the middle so you’re not stuck waiting for your money.
Staffing Businesses: Staffing businesses are a great example of a business-to-business industry. Many different types of companies look to staffing businesses to help fill in seasonal employment gaps or shop for new hires. The company pays the staffing business and the staffing business pays the employees. Often, a company’s billing cycle does match up with the payroll dates. But those employees need to be paid regardless! Factoring loans can help fill in the gap so the business can keep on as usual and those staffers can get paid.
UC Funding for Small Businesses
Besides the above, manufacturing, security guards, and information technology industries also find factoring loans helpful. Your small business might fit into one of these categories, or you might have other needs. If you think factoring loans might work for you, contact United Capital Funding online. You can also call us at 877.894.8232. We can also give you a quick quote and discuss if factoring loans are right for you and your small business.
Article Posted On: October 02, 2018