Your Guide To Selling Receivables in 2018
When your business is strapped for cash, it might seem like taking out a loan is your only option. Loans have a long approval process and charge you interest when you go to pay them back. Luckily there's a better way to get cash for your business in the short term without having to take out costly loans. United Capital Funding can help turn your unpaid invoices into working capital in no time. It might sound complicated but that's why we put together this guide to selling receivables in 2018.
How Accounts Receivable Financing Companies Can Help
Accounts receivable financing at first glance sounds like a tricky topic. While it can be complicated it boils down to a simple fact that companies often need more cash than they have on hand. Accounts receivable financing helps companies who need their invoices paid so they can pay their employee and have cash on hand for miscellaneous company business. This type of financing is very beneficial to companies who need working capital and can’t afford to wait until their invoices are paid, or something never paid. United Capital Funding can help you turn your invoices into working capital so you can continue business operations.
Government Invoice Factoring in 3 Easy Steps
Landing a government contract for any business can be exciting. It means a steady stream of income to support your business. But, because the nature of these contracts is very complicated, it usually takes some time before you will see results. That’s where government invoice factoring comes in. At United Capital Funding, we provide working capital for your business so that that you have the money to operate while you are waiting for your invoices to be paid. We are a simple way to turn your accounts receivable into working capital for your business.
A Business Case for Account Receivable Factoring
Accounts Receivable factoring is a business tool used all around the world. However, it is a relatively new practice in America, and common misconceptions prevent businesses from pursing this credit tool.
What is Account Receivable Factoring?
Simply put, it is selling Accounts Receivable at a discount. Accounts Receivable factoring is not a loan; the business sells its invoices and receives cash. Then, the factoring company has the right to receive future payments from the client.
How Does It Benefit Business?
The main benefit is that factoring Accounts Receivable allows the client to receive immediate cash. Instead of waiting on payments from customers, the liquid cash flow remains consistent, which allows for day-to-day production. Additionally, factoring Accounts Receivable prevents the business from turning into a collection agency. Collecting the payments becomes the job of the factoring company. Business can continue as normal with a working cash flow.
Accounts Receivable factoring is different from a traditional bank loan. This makes it an appealing option for businesses that are reluctant to sign a personal guarantee on a bank loan.
Why Is It Better Than A Traditional Loan?
Banks are interested in getting their money back, no matter the cost to the individual. Traditional lenders hit companies with a variety of fees such application fees, credit check fees, and due diligence fees. With United Capital Funding, there are no up front or out-of-pocket costs, which can save tons of money. It is sometimes an uphill battle for small businesses to receive traditional loans.
Factoring accounts receivable is a smart business decision, and it is part of almost a $3 trillion industry with a proven track record worldwide. Be one of the innovative entrepreneurs to take advantage of accounts receivable factoring before your competitors.
Rights You Give to the Factor as Part of a Receivables Financing Agreement
One benefit of receivables financing is passing off some responsibilities and internal workload to the factoring company. However, it’s important to make it clear what your business will do and what the factoring company will do. Make sure you understand what rights and actions you are assigning to the factoring company. With your permission, the factoring company will do things in your name. If there is anything that makes you uncomfortable, negotiate that up front. You can also keep some rights for your business.
Find Out What You Are Signing Away
First of all, get everything in writing. Make sure no agreement or responsibility is given verbally. This can help eliminate confusion and potentially uncomfortable situations. Also, getting it in writing provides a clear-cut list for your business and the factoring company.
Now, it’s time to tackle what rights and responsibilities are now that of the factoring company. First, determine if they have the right to receive, take, endorse, assign, deliver, and accept deposit proceeds. Do they have these rights on all accounts, or only factored Accounts Receivables? Determine if the company has the right to file mechanics liens and related notices.
Also, figure out if the factoring company can change the address for delivery of mail. Can they open mail? These are common practices for factoring companies, but still make sure you are comfortable with them. If you allow this, do you want this right to only apply to Accounts Receivables or all your accounts? Another thing to thing about is if they file a claim. Should they file claims under payment bonds?
Determine Collection Rights
Professional collection services can be a significant benefit of receivables financing. Figure out if you want your factoring company to communicate directly with your clients. Also, you can outline how you would like the factor to communicate when collecting invoice payments. These are your clients, so you want them treated with the utmost respect and consideration. A factoring company should not be damaging your reputation with clients.
Once again, do you want them to collect from all accounts or only factored Accounts Receivables? When they begin invoice collection, specify how you want them to notify the client. Determine how they should go about contacting the client and how often.
A factoring company and receivables financing can help you with more than just cash flow. A factor can provide a variety of services that can speed business production, and take responsibilities off your hands. You can learn more about that here. However, if you are uncomfortable with a factoring company handling some of these responsibilities, negotiate that upfront. All of these questions might seem like a lot to address, but it’s worth it when you can negotiate a perfect agreement with receivables factoring.
14th Annual RFIx Convention
Saint Petersburg, Florida March 17, 2014
United Capital Funding Corp announced today that Mark S. Mandula, Managing Partner of United Capital Funding Corp. announced will be a featured speaker at the 14th Annual RFIx Convention and Receivables Finance and Receivables Finance International 2014 to be held at The Sheraton Hotel, Warsaw, Poland April 1, 2014.
“I am honored to be asked to participate again at the RFIx. My upcoming presentation will be the 5th time speaking at this prestigious event,” commented Mandula. “My presentation entitled Marketing for Factors in a New Era is a unique opportunity to educate how specialized finance firms can effectively market their services to SME’s in Europe, the EU and globally.”
Mandula is Principal and Managing Partner of United Capital Funding Corp. United is the leading professional Accounts Receivable funding, and AR management services based firm in the United States today. Since 1997 United has successfully provided funding and managed $2.5 Billion to entrepreneurial firms with annual revenue from startup stage to over $200 Million. United is headquartered in the Tampa Bay Florida area, and also has regional offices in Nashville, Tennessee and Charlotte, North Carolina. Most recently, Mandula has been an invited speaker at International Financier Conferences and symposiums globally, including in Hong Kong, Madrid, Shanghai, Amsterdam, Kuala Lumpur, Malaysia, Vienna, Rome, Tainjin [China], Istanbul, Warsaw, Brussels, Chicago, Brussels, Paris, London and San Francisco.
Prior to ownership in United in 2000, Mandula served as Owner/CEO of several specialized financial service firms. He also served as Executive Vice President/Principal in an Investment Banking firm and was involved in over 500 Merger & Acquisitions transactions in the Financial Services Industry. Mandula has been an invited speaker at the American Bankers Association National Convention, Invited Lecturer for 7 years at the Bank Administration Institute National Banking School, Independent Bankers Association of America National Conference, and also numerous corporate presentations, including IBM and others. He also recently was awarded a Certificate in Private Capital Markets from the Graziado School of Business and Management, Pepperdine University.
Mandula has published or coauthored several books on Strategic Planning Process, and Valuation techniques in the M&A process. He has also had articles published in Mergers and Acquisitions: The Journal of Corporate Venture; ABA Banking Journal and other financial industry publications. He has spoken and attended numerous Industry conferences, including those sponsored by the American Cash Flow Organization, Commercial Finance Association and the International Factoring Association.
The History of RFIx
Every year since 2001, RFIx has brought together influential leaders from factors, banks, supply chain finance providers, other financial institutions, trade bodies and technology partners, from all over the world to network, discuss and listen to presentations on key aspects of the receivables finance industry. RFIx has built a reputation of being the premier receivables finance event where the key issues affecting the development of the industry are examined. At RFIx 2013 in Istanbul, the event changed its style from a Conference to more of a Convention. This attracted many more delegates, more speakers and more sessions as well as local press and TV.
About United Capital Funding Corporation
United Capital Funding Corporation provides Intelligent Working Capital via factoring, credit insurance coverage and efficient Accounts Receivable management solutions to clients nationwide. These professional services allow clients to strengthen their cash flow, streamline internal operations and assist them in competing successfully in the current challenging economic environment. United recently exceeded $2 Billion in funded and managed relationships since its formation in 1997. Starting with a single Florida based client, United Capital Funding now serves clients in 29 states, and is based in Tampa Bay, Florida. United also has a regional offices in Nashville, Tennessee and Charlotte, North Carolina.
United Capital Funding is the fiscally savvy alternative for healthy companies in the staffing, government, manufacturing, service, distribution, technology and professional services sectors looking to profit from the flexibility and speed of partnering with a privately held, well capitalized source. A partnership with United Capital Funding Corp. results in a client gaining monetary as well as back room efficiencies to better compete in the current very competitive economic environment. Additional information on the specialized business financial services provided by United, including factoring, Accounts Receivable management, and working capital are available online at their website: http://www.ucfunding.com.
Article Posted On: March 17, 2014