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.
UCF Sponsor 16th Annual Last Man Standing Event 2014
SAINT PETERSBURG, Fla., United Capital Funding Corp., the leading provider of professional Accounts Receivable based funding and credit management solutions in the United States, announced today was a Corporate Sponsor at the 16th Annual AMIKids Pinellas Last Man Standing Event recently held in Saint Petersburg, Florida February 22, 2014.
“United Capital Funding has been a consistent strong supporter of AMIKids Pinellas over the past 10+ years and were honored to be able to support the amazing work done by AMI Kids”, commented Mark Mandula, Managing Partner of United Capital Funding. Mandula also noted that “We fully support the mission of AMIKids Pinellas and know that their efforts are truly valued on local and regional levels.”
Over the past 17 years, United Capital Funding and its employees have contributed nearly $500,000 in local, regional, national and global giving. In addition to these direct financial contributions, United has made significant pro bono contributions of time and United Capital employee skills to support their Corporate Citizenship program. Some of the charities supported by United include AMIKids Pinellas, TBRI, JFCS, the Wounded Warrior Project, Inc., Society of St. Vincent de Paul, Tampa Bay Watch, CASA, The Salvador Dali Museum, The Morean Arts Center, The Chihuly Collection, The Museum of Fine Arts, Police Athletic League, The Ronald McDonald House Charities of Tampa Bay, Heroes of the St. Pete Police, Derrick Brooks Charities, Inc., Community Service Foundation, Suncoast Hospice, Clothes to Kids, Inc., Wilderness Trail, The First Tee of Saint Petersburg and a wide array of other organizations.
About AMIKids Pinellas
AMIKids Pinellas is one of more than 50 programs across the country affiliated with nationally-recognized AMIKids, headquartered in Tampa, Florida. AMIKids Pinellas is a non-profit organization dedicated to providing our community’s kids an opportunity to transform into responsible young adults. AMIKids Pinellas offer young adults a promising future through positive and motivating programs that inspire learning, leadership and personal growth. AMIKids Pinellas operates by the values and standards of AMIKids, Inc. and creates an environment in which students of all types can learn and thrive. With a strong belief in positive reinforcement and individualized attention, AMIKids Pinellas consistently holds true to the following principles: bonding (social development model), family atmosphere, productive discipline, positive learning environment, gender responsiveness, cultural relevance and a high expectation for success.
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. 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; www.ucfunding.com
Article Posted On: February 22, 2014