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.
What Is A Factoring Company?
There are many organizations out there claiming to help you better run your business. Get-rich-quick schemes and snake oil salesmen are everywhere. Your business is too important to risk with false claims or bad deals. But sometimes, you are in need of increasing your cash flow. You might feel like your only options are selling equipment, letting employees go, or taking out loans. Before you take any of those steps, learn more about what a factoring company can do for you.
The Factoring Company 4-1-1
First off, we’ll explain what a factoring company is. Factoring is when a business sells its accounts receivable to a third-party factoring company. The factoring company charges a small fee and takes over the payment collection entirely. Businesses often find this useful to meet immediate cash needs. Think of it this way: money tied up in accounts receivables and outstanding invoices is YOUR money, a factoring company just helps you access it quicker.
How does Factoring Work?
Factoring is not a loan, it’s a way to get your money sooner. It starts with contacting a factoring company to see if you qualify and get a quote for their services. Then, you literally sell your selected accounts receivable to them. They pay you 80-90% of the invoice in cash, within five days. The factoring company is then responsible for collecting the payments, you don’t have to worry about it anymore! Once the invoice is paid in full to the factoring company, they give you the remaining 10-20%, keeping a small fee for their service. There are no interest charges, no hidden fees, and no risk. Because it’s your money!
Who Uses Factoring Companies?
Businesses of all sizes benefit from factoring. Small businesses can sell their accounts receivables to free up much-needed capital. They then can use it to fund marketing, payroll, or new equipment during growth periods. There are some industries in general that find it especially beneficial. If a business’s billing cycle differs from its customers, factoring can fill in the gaps. This is perfect for government contractors and business-to-business (B2B) service providers. Staffing businesses and security guard companies can also benefit from payroll factoring for similar reasons.
UC Funding: Intelligent Working Capital
If you think selling your accounts receivable could be a good strategy to grow your business, contact us at United Capital Funding. Our fees tend to be significantly lower than other companies, and we can move quickly. Call us as now at 877.894.8232 to see if you qualify and we can give you an instant quote. You can also contact us online. Let us be a partner helping you to achieve your business goals.
Article Posted On: October 02, 2018