bargain business loans

Bargain Business Loans

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Bargain Business Loans: Unlocking Financial Flexibility for Small Businesses

In the dynamic landscape of small business financing, the quest for “bargain business loans” often tops the priority list for savvy entrepreneurs. Business loans can be a lifeline, providing the essential capital to fuel growth, manage cash flow, or navigate unforeseen challenges. However, the true cost of a loan extends beyond its face value. To ensure you’re securing a genuine bargain, it’s crucial to understand and weigh various cost factors that could impact your financial health over time.

Key Costs in Business Loans

When considering a business loan, the headline interest rate doesn’t tell the whole story. Here are five critical costs small business owners must consider:

  1. Interest Rates: The most apparent cost, but rates can vary widely based on loan type, term, and creditworthiness.
  2. Origination Fees: Charged by lenders to process new loans, these can be a flat fee or a percentage of the loan amount.
  3. Late Payment Penalties: Missed or late payments can incur significant penalties, adding to the loan’s cost.
  4. Prepayment Penalties: Some lenders charge fees for early loan repayment, potentially negating savings from paying off a loan early.
  5. Service Charges: Additional fees for services like monthly maintenance, reporting, and more can add up over time.

Non-Fee Costs Impacting the Loan Value

Beyond these direct costs, several non-fee factors can significantly affect the overall expense of your loan:

  • Time Value: The speed of funding can be critical. A loan that’s available quickly can prevent missed opportunities, even if its nominal costs are higher.
  • Repayment Flexibility: Loans with rigid repayment schedules may impose financial strain. Flexible repayment terms can offer breathing room during lean periods.
  • Collateral Requirements: Secured loans might have lower interest rates but risk valuable assets. Assess if this trade-off is worth the potential savings.
  • Impact on Credit: Short-term loans or high-utilization lines of credit can affect your credit score, possibly leading to higher costs for future borrowing. Some financing, such as receivables factoring, isn’t considered a loan and therefore doesn’t impact your credit in the same was as traditional loans.
  • Opportunity Cost: The capital tied up in repaying a loan could otherwise be used for investments that might yield a higher return.

Finding the True Bargain

The real bargain in business loans isn’t just about the lowest upfront cost; it’s about aligning the loan’s terms and conditions with your business’s financial health and growth objectives. It requires a holistic evaluation of how a loan’s structure, beyond just fees and interest rates, supports your long-term sustainability and success.

  • Research and Compare: Don’t automatically settle for the first offer. A loan comparison calculator can help you compare multiple loan products and lenders to find the best match for your needs.
  • Read the Fine Print: Understanding all terms and conditions can prevent unpleasant surprises and additional costs.
  • Consider the Total Cost of Ownership (TCO): Evaluate all direct and indirect costs over the loan’s life to ascertain its true cost.

Conclusion

Business loans can create a strategic advantage for small business owners, offering a pathway to financial flexibility and growth. By considering both the visible and hidden costs associated with financing, entrepreneurs can make informed decisions that bolster their businesses’ financial foundation and future.

Navigating the complex world of business financing and “bargain business loans” can be challenging, but understanding the full spectrum of financing costs is the first step towards securing a deal that genuinely serves your business’s best interests.

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Best St. Patrick's Day quotes for business

5 St. Patrick’s Day Quotes for Business

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With 5 St. Patrick’s Day quotes for business, this holiday, rich in history and tradition, offers more than parades and green attire. It’s a celebration of culture, perseverance, and luck, which we often attribute to success. This festive occasion is an excellent opportunity for businesses to reflect on growth and embrace the entrepreneurial spirit. So here are some of the best St. Patrick’s Day quotes for business aimed at motivating and uplifting everyone connected to your enterprise.

Embracing the Luck and Hard Work

  1. “Luck is what happens when preparation meets opportunity.” – Seneca

Though not a traditional Irish saying, this quote perfectly captures the essence of St. Patrick’s Day in the business context. It reminds us that while luck may play a role in success, it is the ongoing preparation and seizing of opportunities that truly drive achievement. This St. Patrick’s Day, let’s commit to preparing our ventures for the opportunities that lie ahead.

  1. “May your troubles be less and your blessings be more, and nothing but happiness come through your door.”

This Irish blessing is a heartfelt wish that can be shared among team members and clients. It embodies the spirit of goodwill and prosperity that every business strives for. It’s among the best St. Patrick’s Day quotes for business, highlighting the desire for fewer obstacles and more triumphs in your entrepreneurial journey.

  1. “The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese Proverb

While not Irish in origin, this proverb aligns with St. Patrick’s Day’s themes of growth and renewal. It serves as a powerful reminder to businesses that the path to success starts with our actions today. This St. Patrick’s Day, let it inspire you to plant seeds for future growth, whether investing in new ventures, nurturing your team, or innovating your product line.

  1. “I’ve found that luck is quite predictable. If you want more luck, take more chances.” – Brian Tracy

This quote speaks to the entrepreneurial spirit of risk-taking and venturing into the unknown. St. Patrick’s Day is a fitting time to reflect on the risks we’ve taken and to remind ourselves that every leap of faith is a step towards greater luck and opportunity.

  1. “May your pockets be heavy and your heart be light, and may good luck pursue you each morning and night.”

Embedding wishes of prosperity and joy, this quote is perfect for businesses looking to inspire optimism and positivity among their teams and clientele. It’s one of the best St. Patrick’s Day quotes for business, highlighting the dual goals of financial success and personal fulfillment.

Leveraging the Festive Spirit for Business Growth

St. Patrick’s Day provides a unique opportunity for businesses to connect with their audience on a more personal and cultural level. Sharing these quotes in your communications around the holiday can foster a sense of community and shared aspirations.

Furthermore, these quotes remind us of the importance of preparation, opportunity, and the courage to take chances. Businesses must navigate the complexities of the modern marketplace to succeed. Let the spirit of St. Patrick’s Day encourage a blend of strategic planning and the embracing of serendipitous opportunities.

In conclusion, 5 St. Patrick’s Day quotes for business aren’t just about invoking luck. They are also about inspiring action, fostering a positive mindset, and reminding us of the power of community and tradition in our entrepreneurial endeavors. This St. Patrick’s Day, let’s draw inspiration from these words and pave the way for a year of prosperity, growth, and happiness.

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Ancient Roman wisdom for business financing

Roman Empire Wisdom for the Business-Lender Relationship

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“Beware the Ides of March!”

The Ides of March, famously marking the assassination of Julius Caesar in 44 BC, serves as a potent reminder of the dynamics of power, trust, and fate within the Roman Empire. This historical milestone, alongside the broader narrative of Rome’s rise and fall, offers relevant insights for today’s entrepreneurs building a strong business-lender relationship and seeking business financing. Here’s how ancient Roman wisdom can apply in the modern financial landscape.

1. Understand the Power Dynamics

Julius Caesar’s fall was partly due to his misunderstanding of the power dynamics within the Senate. Similarly, in business financing, it’s crucial for borrowers to understand the power dynamics between themselves and their lenders. Recognize the lender’s position as it relates to the value and leverage you bring to the table as an entrepreneur. Put yourself in the strongest negotiating position and improve the perceived strength of your business before applying for financing. Lenders want good borrowing partners, so make your business as attractive as possible.

2. Cultivate Trust and Loyalty

Trust and loyalty were central to Roman political life, yet Caesar’s assassination underscored how fragile these bonds could be. For borrowers, building a solid relationship with lenders based on transparency and integrity is vital. Regular communication, honesty about your business’s performance, and adherence to agreed terms help cultivate a trusting relationship that can withstand challenges and uncertainties. The best time to start building and strengthening your relationship with lending partners is before you need the money.

3. Prepare for Unforeseen Changes

The Ides of March was a sudden and dramatic turn in Roman history, highlighting the importance of being prepared for unexpected events. Businesses seeking financing should similarly plan for unforeseeable market shifts or financial challenges. This might involve securing flexible financing terms, building emergency funds, or diversifying revenue streams to ensure resilience in the face of change.

4. Leadership and Vision Are Paramount

Caesar’s ambition and vision for Rome were undeniable driving forces in his rise to power. He also knew how to sell the story of his conquests to strengthen his position. Business Insider says, “The best leaders don’t just do amazing things — they know how to present a compelling story.” For entrepreneurs, having a clearly articulated vision for your business and demonstrating strong leadership are crucial when seeking financing. Lenders are more likely to support a business with a strong direction and a leader who can navigate adversity toward that vision.

5. The Importance of Strategic Alliances

Rome’s history is replete with alliances that shifted the balance of power. In the business world, forming strategic partnerships can enhance your company’s appeal to lenders. These alliances might provide financial stability, expand your market presence, or offer technological advantages that strengthen your business model and, by extension, your financing proposals.

6. Adaptability and Innovation

The Roman Empire endured for centuries due to its ability to adapt and innovate, from military tactics to administrative systems. For modern businesses, adaptability and innovation are just as critical, especially in a rapidly changing economic landscape. Demonstrating to lenders that your business can pivot and innovate in response to market demands will make your financing application more compelling.

7. Legacy and Long-Term Planning

Finally, the Roman Empire’s legacy, in terms of culture, law, and governance, is a testament to the power of long-term planning and vision. Businesses should approach financing not just as a means to an immediate end but as part of a broader strategy for strengthening a business-lender relationship to support long-term growth and legacy building. This perspective can help in selecting the right financing options that align with your company’s long-term goals and values.

In essence, the Ides of March and the broader sweep of Roman history offer timeless lessons for today’s entrepreneurs navigating the complex world of business financing. By understanding power dynamics, cultivating trust, preparing for change, demonstrating visionary leadership, forming strategic alliances, embracing adaptability, and planning for the long term, borrowers can secure the financing they need to build their own enduring empires.

how to improve cash flow with factoring

How to Improve Cash Flow with Factoring

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Despite its long history, invoice factoring remains a lesser-known financing option among many small business owners in the U.S., especially those in the B2B sector. This age-old method, also known as invoice discounting or receivables financing, offers a practical solution for managing cash flow and fostering growth.

What Is Invoice Factoring?

At its core, invoice factoring is straightforward: businesses sell their accounts receivable (i.e., outstanding invoices) to a third party, the Factor, at a discounted rate. This transaction not only simplifies financial management but also turns pending payments into immediate working capital.

Why Consider Invoice Factoring with Corsa Finance?

  1. Immediate Access to Working Capital: Factoring your invoices means unlocking up to 95% of the funds tied in accounts receivable, often within the same or the next business day. This swift access to cash supports essential operations, from payroll to new orders, without the wait.
  2. No Hidden Fees, Flexible Options: Transparent pricing at competitive rates makes factoring attractive to many businesses. The transaction is easy to understand and process.
  3. Expertise Across Industries: With decades of experience, our partners supports a diverse range of sectors, including temporary staffing, supply chain management, trucking, commercial cleaning, manufacturing, and more. Invoice factoring works successfully for businesses of all sizes and types, ensuring your specific needs are met.
  4. Personalized, Customer-Centric Service: Our partners offer fast approvals and funding without long-term contracts or minimums. Our dedication to personal service ensures you receive the support and guidance needed to navigate your financing options effectively.

How Does Factoring Benefit Your Business?

By choosing to factor invoices, you not only expedite your cash flow but also open doors to new opportunities. This financial strategy allows you to:

  • Immediately reinvest in your business, stimulating growth and expansion.
  • Manage payments and operational expenses more effectively, ensuring stability.
  • Embrace larger projects and orders with confidence, knowing your financial base is solid.
  • Reduce accounts receivable collection activities so you can focus on growing your business.
  • Take advantage of early-pay price discounts.
  • Access working capital without putting more debt on your balance sheet, keeping your bank covenants intact.
  • Keep your vendors, contractors, and creditors happy with on-time payments.

Get Started Today

Ready to explore how invoice factoring can transform your business finances? Contact Corsa Finance for a no-cost, no-obligation quote. Discover the amount of working capital you can unlock by leveraging your accounts receivable. Whether you’re seeking to understand more about our services or ready to apply, we want to be a financial resource for you.

Empower your business with invoice factoring and turn your accounts receivable into a strategic asset that is working for you today. Contact us today to learn more or to start the application process.

Bridging Financing Challenges for Black Business Owners

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During Black History Month, it’s important to recognize the contributions of Black entrepreneurs and business owners to our economy and society. Securing business financing is a factor in nurturing and expanding a business. However, Black business owners often encounter obstacles when seeking capital to fuel their growth.

The Obstacles Faced in Accessing Capital

Having access to capital is vital for any business’s survival. Unfortunately, Black-owned businesses can face steeper challenges in obtaining bank loans compared to their counterparts. This disparity can be attributed to factors including conscious or unconscious systemic biases, wealth disparities, and differences in credit scores. As a result, many entrepreneurs face limitations in their ability to expand, innovate, and compete.

Efforts are underway to address these challenges. There are organizations and programs specifically tailored to supporting Black entrepreneurs. For example, the National African American Small Business Loan Fund offers affordable loans designed to support the growth and expansion of Black-owned businesses. Investment platforms like WeFunder actively encourage investments in startups led by entrepreneurs fostering an inclusive ecosystem for business financing.

Innovations Transform Access to Financing

Developments in financing technology and innovation have also opened up opportunities for Black business owners.

Crowdfunding platforms, venture capital firms that focus on supporting startups owned by minority individuals and digital lending solutions are creating new, modern opportunities. These platforms not provide the financial resources but can also offer valuable mentorship networking opportunities and support systems that can propel long term success.

One standout example is the initiative by the Small Business Administration (SBA) to enhance its outreach and programs for minority-owned businesses. The SBA offers resources, loan information, and grants specifically aimed at supporting minority entrepreneurs. Additionally, the expansion of fintech company financing innovations focused on serving underrepresented business owners has also made it easier to access capital quickly and without the need for traditional credit requirements.

Supporting Black Business Owners Beyond Financing

While securing financing is key for many businesses, success also depends on networking, mentorship, and community support. Black business owners can access resources through organizations like the National Black Chamber of Commerce for networking opportunities, business advice, and advocacy. Participating in local and regional business organizations can provide new insights and open doors to new possibilities and cusotmers.

Conclusion

It’s important for the business community in general prioritize our support for Black-owned businesses and their access to financing opportunities not during February but throughout the year. By contributing to an equitable business environment we can create opportunities for growth and success for all. Lets take this moment to celebrate the achievements of business owners and the rich diversity they bring to the business world. We can show our support by investing in Black owned startups, advocating for equitable lending practices, and making an effort to patronize Black-owned businesses in our everyday lives.

 

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Cost Of Financing Weighs Heavily on Business Funding Decisions

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Thinking about the cost of financing is key when deciding if business financing is right for you. Business financing can provide the capital needed for growth, but it also comes with responsibilities and costs. Plus, there are many types of financing that help in different ways. Consider these business funding topics to help you make an informed decision.

  1. Evaluate Your Business Goals:
    • Start by defining your short-term and long-term business goals. Consider whether financing is necessary to achieve these objectives. Financing is often used for expansion, purchasing assets, covering operational expenses, or handling unexpected financial challenges. To meet your goals, how quickly do you need financing?
  2. Assess Your Financial Situation:
    • Take a close look at your business’s financial health. Analyze your cash flow, profitability, and current financial resources. Determine if you have any outstanding debts or financial obligations. Understand your financial position before choosing a funding source.
  3. Determine the Purpose of Financing:
    • Clearly define why you need financing. Is it for a specific project, to increase working capital, or to refinance existing debt? Is the cost of financing less than the benefits from financing? Once financing is in place, will you be able to meet your goal and subsequently repay the funder?
  4. Explore Different Financing Options:
    • Research and compare various financing options available to you. Common choices include traditional bank loans, lines of credit, equipment financing, venture capital, angel investors, crowdfunding, invoice factoring, receivables factoring, merchant cash advances, or business grants. Each option has a different cost of financing, plus other advantages and disadvantages, so choose one that aligns with your business operations.
  5. Assess Risk Tolerance:
    • Consider your risk tolerance and the impact of taking on debt or bringing in investors. Taking on financing typically involves a degree of risk. You’ll be responsible for repaying the borrowed funds or providing returns to investors.
  6. Create a Business Plan:
    • Develop a comprehensive business plan that outlines your strategy for using the funds. A well-structured business plan can help you secure financing and ensure that you have a clear roadmap for achieving your business goals. If your funder doesn’t expect you to clearly explain how you will use the money and how you will repay them, you are not talking to a reputable lender.
  7. Evaluate the Cost of Financing:
    • Understand the cost of financing, including interest rates, fees, total cost of the credit over time, or any equity you may need to give up. Calculate the total cost of financing and understand how the financing will support your business and its ability to generate sufficient returns to cover these expenses.
  8. Consider Your Personal Finances:
    • Assess how business financing may impact your personal finances. Some financing options may require personal guarantees or collateral, putting your personal assets at risk in case of business failure.
  9. Review Your Creditworthiness:
    • If you’re considering loans or lines of credit, evaluate your creditworthiness. Lenders will assess your credit history and business financials when determining eligibility and terms. If your credit needs improvement, consider evaluating funding options that do not require strong credit, such as invoice factoring and receivables factoring.
  10. Evaluate Timing:
    • Timing can be crucial. Consider whether the current market conditions, interest rates, and economic climate are favorable for obtaining financing.
  11. Assess Your Ability to Manage Debt:
    • Thinking about debt financing? Assess your ability to repay the debt in a way that does not your business. Consider how much you can repay each month, taking into account potential fluctuations in your business’s income.
  12. Consider Alternatives:
    • Explore alternative options to financing. Can you reduce or delay costs or expenditures? Could a strategic partnerships be helpful? Are business grants available? Do you quality to participate in a business incubators? Do you need additional funding, or will speeding up cash flow meet your business needs?
  13. Seek Professional Advice:
    • Don’t hesitate to seek guidance. Financial and business advisors can provide valuable insights and help you make informed decisions.

Ultimately, the decision to pursue business financing should align with your business goals, financial capacity, and risk tolerance. Careful planning and research are essential to deciding how to determine if business financing is right for you.

10 Common New Year’s Financial Resolutions

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The new year is a great time to think about financial affairs. While financial New Year’s resolutions vary, 10 of the most common ones include:

1. Save More Money. Many people resolve to save a percentage of their income. The same resolve applies to business savings.

2. Pay Off Debt. This often involves paying down credit card debt, student loans, or other outstanding loans. Do you know your debt-to-income ratio — how much are your debt payments compared to your income during the same time period?

3. Create a Budget. Establishing a budget helps individuals and businesses track spending, identify areas for improvement, and allocate resources wisely. A budget creates a measuring stick against which you can compare your financial decisions throughout the year.

4. Reduce Unnecessary Expenses. Cutting back on non-essential expenses can free up money for more important goals. Expenses are only half of the equation, however. And often, you need to spend money to make money, which is why the next item can be even more impactful.

5. Increase Income. Whether it’s negotiating a raise, taking on a side gig, or pursuing a new opportunity, many people aim to boost their income in the new year. Can you take on a new client? Deliver services through a new channel? Create a new market?

6. Build an Emergency Fund. People typically aim to set aside three to six months’ worth of living expenses. For businesses, a good benchmark is being able to cover at least the next two payrolls to keep your team working and earning.

7. Improve Credit Score. People or businesses with lower credit scores can often improve their creditworthiness by paying bills on time, reducing credit card and loan balances, and disputing errors on their credit reports. Poor credit can increase your costs of financing, insurance, and rent.

8. Review and Update Insurance. Reevaluating insurance coverages can help ensure adequate protection without overpaying. Does your business insurance cover the loss of key personnel, data breaches, or closures due to issues out of your control, such as the COVID-19 shutdowns?

9. Track Financial Progress. Regularly monitoring and evaluating progress can help individuals stay on track with their goals.

10. Contribute to Retirement Accounts. Increasing contributions to retirement accounts can help secure your financial future. Whenever possible, maximize contributions that are matched by an employer.

If financial matters aren’t your specialty, you may want to consult with a financial advisor or accountant. Getting expert and unbiased advice can help you weigh options to choose what’s best for you, your family, and your business.

Remember that the key to successful financial New Year’s resolutions is setting specific, achievable goals and creating a plan to work toward them. Follow up throughout the year by tracking progress and making adjustments to support your short and long-term goals.

slow periods in busienss

Slow Periods in Business Create Cash Flow Challenges

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Cash flow management during slow periods can be challenging for a business owner. However, understanding how to manage your cash flow during these times is critical to long-term success. In this post, let’s explore some strategies for managing cash flow during slow periods.

  1. Create a cash flow forecast. The first step in managing cash flow during slow periods in business is to create a cash flow forecast. This forecast should include your projected cash inflows and outflows for the upcoming period. It should also include any expected changes in revenue or expenses. A cash flow forecast will help you identify potential shortfalls so that you can take action to address them before they become a problem. If you project running short of cash during the slow period, consider looking into invoice factoring. Turn the invoices into cash now to cover shortfalls during the slow period.
  2. Minimize expenses. It’s important to minimize expenses as much as possible during slow periods. This may mean cutting back on non-essential expenses, renegotiating contracts with suppliers, and reducing employee hours. Consider outsourcing select business operations. One of the benefits of invoice factoring is that you can turn your accounts receivables function over to your factoring company. Reducing the labor needed to manage and collect outstanding invoices can help offset the factoring costs.
  3. Offer incentives for customers. Do you have creative ways to incentivize customers to shop with your business now? Offering discounts is one method; however, rather than cutting your costs, consider adding value to your product or service. For example, if your company offers commercial cleaning services, add an upgrade service such as window washing now or during a future visit if the client books during your slow period. The value of adding cash flow today could offset the marginal labor expense to provide the incentive service.
  4. Increase marketing efforts. One of the first expenses many business owners cut is marketing. But that’s comparable to turning off the water faucet when you’re thirsty. It can be critical to increase or laser-focus your marketing efforts for slow periods to reach new customers and encourage existing customers to continue shopping with your business. This may mean using social media and email marketing, hosting events to attract new customers, or partnering with other businesses to host sales or promotions.
  5. Review payment and credit terms. During slow periods, reviewing payment and credit terms with your suppliers and customers can improve your cash position. This may mean negotiating more favorable terms with your suppliers or offering incentives to customers who pay early or in full. Work with a factoring company that doesn’t require you to sell all invoices. You can offer customers who pay within ten business days a lower rate and then factor the invoices for the slower-paying customers with the increased rate offsetting the factoring fee while you net the same amount regardless of payment timing.

In summary, managing cash flow during slow periods requires thoughtful planning and management. But you have tools available, and depending on your circumstances, you can weather the downturn and be prepared for future growth.

 

Comparing Factoring Benefits - Which Invoice Factoring Company Should You Choose?

Apples to Apples – Which Invoice Factoring Company Should You Choose?

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Compare key components found in factoring proposals including factoring advances and fees, client obligations and invoice factoring company benefits.

Key Components of Invoice Factoring Proposals

The key components that you will find in proposals for invoice factoring services generally come down to three things: The amount of factoring advances and fees, client obligations and factoring company benefits.

Here are some things to compare when choosing between invoice factoring services:

  • Advance Rates
  • Reserve Rates
  • Factoring Fees
  • Add-on Fees
  • Funding Options
  • Account Limits and Debtor Limits
  • Monthly Minimums or Factoring Requirements
  • Contract Length and Termination Clauses
  • Buy Back Stipulations
  • Factoring Client Obligations
  • Factoring Program Benefits – Factoring Company Promises

Invoice Advances, Reserves and Factoring Fees

Advance Rate

This is the amount (usually expressed as a percentage) of the face value of an invoice that the factoring company will fund when you factor an invoice.

Reserve Rate

The reserve is an amount (usually expressed as a percentage) of the face value of an invoice that the factoring company will hold back “in reserve” pending payment from your customer on a factored invoice.

Factoring Fee

This is the cost of factoring an invoice. Like the advance and reserve, it is often expressed as a percentage of the face value of an invoice the factoring company will retain as it’s fee when you factor an invoice.

Added together, the advance rate, reserve rate and factoring fee should equal 100%. Here is an example of their application:

  • Day 1 – Factor an invoice and get fast funding of 90% of the invoice amount, with 5% held in reserve and a 5% factoring fee.
  • Day 30+ – Receive the 5% reserve after your customer has paid the invoice (factoring company retains the other 5% as their factoring fee).

Introductory Advance Rates and Factoring Fees

Some factoring companies use low introductory rates or progressive fee structures that sound appealing, but in actuality represent a higher invoice factoring fee than many of their competitors.

Some factoring fees are flat – meaning a small percentage is the only cost of factoring an invoice regardless of how quick your customer pays the invoice. Other factoring fees might sound low but when reading the fine print you may discover fees are assessed weekly instead of monthly, or are progressive in some other way.

Because of this, a flat, one-time 5% factoring fee might ultimately be less costly to your business than a lower fee offered by a factoring company that assesses the fee weekly, especially if your customer takes several weeks or even longer to pay. Just like compounding interest, the longer the invoice remains outstanding, the higher your cost of financing will be. Given that payment terms are often 30, 60 or even 90 days, a competitive, one-time flat fee will often be far more economical than a low fee applied progressively.

To avoid increasing the cost of factoring, look for proposals where a one-time factoring fee is your “all in” cost of factoring. I.e., there are no additional costs for processing schedules, funding advances, maintaining your account, and so on.

Add-On and Hidden Fees

Some factoring companies have add-on and hidden fees that should be taken into consideration when comparing invoice factoring services; such as fees that will be charged for:

  • Schedule processing
  • Collection activities
  • Due diligence
  • Customer credit checks
  • Online account access
  • Account administration or maintenance
  • Funding fees (which may vary depending on method of funding)
  • Buy-backs / chargebacks

When reviewing a proposal for invoice factoring services, look beyond the advances and factoring rates to determine if there are add on or hidden costs that might drive up the real cost of invoice factoring, thereby reducing its benefits as a cash flow management tool.

In addition, your proposal for invoice factoring services should also outline the account limit (how much money the factoring company will have out on advances at any given time for all factored invoices) and account debtor limits (the amount the factoring company is willing to have out on advances at any given time for an individual debtor).

Factoring Client Obligations

As the factoring client, your obligations are any and all conditions you agree to fulfill in your relationship with the invoice factoring company (or the Factor). These terms may include personal guarantys, buy back stipulations (especially when factoring with full recourse), monthly minimums, contract termination and notification requirements, and monthly reports your company agrees to provide to the factoring company.

The terms which define your obligations as a factoring client could vary greatly, depending on which invoice factoring company’s services you are considering. Some of these obligations can radically impact how effective the factoring company’s program will be in helping to expedite cash flow for your organization.

Invoice Buy-Back Stipulations

Buy-back stipulations are conditions that require you to buy back an invoice previously factored. Full recourse factoring companies may require you to buy back invoices if they go unpaid for a set period of time, such as 30, 60 or 90 days, etc. They may also require you to buy back invoices if they are not paid due to credit reasons, such as insolvency of your customer. Buy-back stipulations may also require you to reimburse a factoring company for collections or legal activities undertaken in trying to recover unpaid customer payments.

Opting to factor with a non-recourse factoring company may afford your business additional financial protection. If an invoice that has been factored is not paid due to insolvency of your customer, in most cases the non-recourse factoring company will absorb the loss, not you. With non-recourse factoring, clients aren’t usually required to buy back invoices unless an invoice is disputed by the customer.

Factoring Minimums

Some factoring proposals require that you factor a minimum dollar amount or a minimum number of invoices each month, or may stipulate a higher factoring fee be charged if minimums are not met. Some proposals require that a client factors any and all invoices generated for a given client, or even that they factor all of their receivables.

Working with a factoring company that doesn’t require you to commit to factoring minimums can keep you in the driver’s seat, so that you can do what is in the best interest of your organization and factor only when you choose. We offer spot factoring and no-minimum factoring proposals so you can stay in control.

Contract Termination and Notification Clauses

If you decide to stop factoring or you have determined that the invoice factoring services offered by another company would be better for your business, some factoring contracts will require that you provide advance notification – sometimes as much as 120 days in advance.

Failure to meet the notification requirements might make it impossible for you to make a change without absorbing significant financial penalties, or you may have to wait another 8-9 months before you can stop factoring or change factoring companies.

Before signing a factoring agreement, find out what penalties or notification requirements will apply should you decide to stop factoring or take your business to a different factoring company. You may also look for a factoring company (like Corsa Finance) that doesn’t require you to sign a long-term contract or penalize you if you decide to stop factoring with us.

UCC-1 Filing

As a client, you should never sign a proposal that gives a factoring company authorization to file a UCC-1 financing statement on your business before you have been allowed to review all of the closing documents (e.g., factoring contracts) that will apply to the relationship.

Benefits to Look For in an Invoice Factoring Agreement

The benefits outlined in proposals for invoice factoring services that will be provided by the factoring company are the promises and perks that their clients will enjoy, in addition to expedited cash flow from factoring invoices.  This includes factoring advance rates but may encompass promises of good customer service, knowledgeable account managers, client online account access, reports, funding options, credit checks on customers, etc.

Since the program benefits provided by factoring companies may vary greatly, here are some of the benefits you might want to look for in a factoring agreement.

  • Fast funding on advances (ACH) – within 1-2 business days (or even faster)
  • Additional funding choices (wire funding, etc.)
  • Free credit checks to help you vet new customers or establish limits
  • Consistently high level of professional customer service
  • Dedicated account managers who understand the client’s business and preferences
  • 24 x 7 online account access
  • Transparency – no hidden fees
  • No application or account administration fees
  • No long-term contracts or monthly minimums
  • Spot factoring and micro-factoring
  • Competitive advances and factoring fees
  • Non-recourse factoring to reduce credit risk
  • Non-notification factoring to white label a seamless experience for your clients

Benefits of Working with the Best Invoice Factoring Companies

The primary reason companies factor invoices is to expedite cash flow, whether to meet expenses or grow an organization more quickly, and often both. When comparing invoice factoring services, take into account the extent to which the program seems designed to help you speed up cash flow so that you can reinvest in your organization more quickly.

  • The best factoring companies look for reasons to say “yes” when it comes to approving a client or approving an account debtor, even when it means looking past a credit score or list of assets.
  • The best factoring companies offer competitive rates and fees and have a program that is transparent, so that their clients are not hit with unexpected fees or surprises.
  • The best factoring companies leave more decisions up to the client so that they can do what is in the best interests of their organization.
  • The best factoring companies become trusted financial partners because they design their programs, operate and provide professional customer service – day in and day out – with a view for the long-term.

Get a free, no-obligation proposal for invoice factoring services or request more information about our programs by applying online, calling us at 866-855-6772 or completing the form below. We’ll listen to what’s most important to you and your business and work with you to design a factoring program that represents a good match, so you can stay focused on your business.

7 Intangibles the Best Business Invoice Factoring Companies Provide

7 Intangibles the Best Business Invoice Factoring Companies Provide

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Intangible assets are real, they just aren’t physical in nature. The best business invoice factoring companies are set apart by the added value their intangibles provide.

Apart from factoring rates and advance amounts, what factoring companies do — the services they provide — are basically the same from Factor to Factor. We offer competitive factoring rates and high advances with fast funding, yet we believe it’s the things you don’t see — the intangible qualities which characterize our services — that help our clients the most.

Investopedia describes intangible assets as items which don’t exist in the physical sense, yet “are valuable because they represent potential revenue.” When comparing business invoice factoring companies’ rates and fees, it’s important to remember that the value they add in the way they do business and how they treat their clients could impact your bottom line, too.

7 Intangible Characteristics the Best Business Invoice Factoring Companies Provide

1. Speed

The goal of business invoice factoring is to speed up cash flow. When you factor with a company that provides fast approvals and fast funding, you can stay focused on your business instead of chasing customer payments or waiting on cash flow.

We know that the faster the factoring company’s team works, the more they can help you grow your business. Factoring with a company that provides a consistent, high level of customer service saves your company time and money.

2. Cost Savings

Some business invoice factoring companies advertise low factoring rates, then charge add-on fees or apply fees progressively in order to increase revenue. Unfortunately, these additional fees reduce your profits.

Our goal is to help you grow your company to the next level, so we avoid hidden invoice factoring costs that reduce your profits, from the application process to schedule processing. We offer factoring programs with:

  • Program transparency – no hidden fees
  • No application or due diligence fees
  • No charge for processing factoring schedules or notifying you that the work has been done or your account has been funded

In addition, we work with you to tailor a factoring program so that it’s well-suited to your company’s financial needs; with:

  • Competitive factoring rates – and ask about bundle discounts!
  • Competitive advances to help you unlock working capital
  • Fast, free funding

3. Trust

Some business invoice factoring companies lock you into contracts for the long term with penalties and lengthy auto-renewal clauses. We believe that the best invoice factoring companies choose to earn your trust, long term business and referrals through their performance.

We don’t require factoring clients to sign long term contracts, nor do we have factoring minimums. As the client, you stay in control so that you can always do what you think is best for your business.

4. Partnership Mentality

We want to help you grow by empowering you to take control of your cash flow, so you can take your company to the next level. From the way our factoring services let you stay in control to fast approvals and dedicated account managers who understand your needs and preferences, we want you to have  tools your business needs to become more profitable and grow.

5. A “Yes” Culture

Every business is more than a credit score or an asset list. From evaluating your application for business invoice factoring services or a potential new customer, credit limit or rate request, we look for reasons to say “yes!” and say yes quickly.

6. Added Value

We will work with you to tailor a factoring program that aligns with the unique needs of your business, instead of forcing you into a one-size-fits-all service. The best invoice factoring companies add value whenever possible, giving you added value in the form of:

  • Dedicated account managers
  • Ability to serve any-size organizations, including independent contractors and SMBs
  • Manual credit review when higher approval amounts are needed
  • Credit reporting to help you vet new customers
  • A growing library of articles and tools on our blog to help with business growth, many specific to your industry
  • Partnerships with other alternative financing companies to make sure you find the financing tool that is most appropriate for your business

7. Flexibility

Corsa Finance is unique in being able to offer multiple types of factoring under one roof, including:

  • Non-notification factoring with a white-labeled factoring program that provides your clients with a seamless customer experience
  • Full recourse factoring
  • Non-recourse factoring that offers additional business protection by limiting your credit risk from bad debt
  • Spot factoring for a company that wants a one-time or only very occasional factoring solution
  • Micro-factoring for small companies and independent operators that other factoring companies might not consider

If you’re ready to work with one of the best invoice factoring companies in the U.S., we would love to partner with you and help you grow your business. Apply online or request a free, no-risk factoring proposal by calling 866-855-6772 or completing the form below.

The Hidden Costs of Invoice Factoring

The Hidden Costs of Invoice Factoring

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Six hidden costs of invoice factoring could make factoring invoices more expensive and less beneficial as a cash flow management tool.

6 Hidden Costs of Invoice Factoring Reduce Benefits and Drive Up Cost

When comparing the invoice factoring proposals of U.S. factoring companies, remember to look for additional costs and add-on fees in addition to the factoring fee that is being offered.

These fees and charges may seem small but when you do the math you can clearly see that they quickly eat into your business’ profits and jack up the real cost of invoice factoring.

1. Add-On or Administration Fees

Though it seems like administrative services should be part of the service provided, some invoice factoring companies tack on extra fees for the administrative tasks that are part of the invoice factoring process.

Any add-on cost drives up the real cost of invoice factoring. Some of the other hidden fees factoring companies might tack on include things like:

  • Application fees
  • Proposal fees
  • Due diligence fees
  • Credit check fees
  • Notification fees
  • Schedule processing fees
  • Invoice processing fees

We don’t charge any application, due diligence, credit check or account set up fees that drive up the cost of factoring. Nor do we assess extra fees to process paperwork, transfer funds or notify you of account actions. We view these types of tasks as intrinsic to the invoice factoring process, not as add-ons.

2. Long Term Contracts

Some factoring companies require clients to sign long-term contracts that might range from 6, 12, or even 24 months, and harbor strict renewal and notification clauses. If a client doesn’t adhere to the contract’s conditions or needs to be released from the contract before the terms are up, significant penalties are often assessed.

We don’t require clients to sign long-term factoring agreements, so they aren’t locked into an agreement that may no longer be right for their business. We believe the best factoring companies earn their clients’ continued patronage through professional customer service and outstanding performance, not long-term contracts with stiff penalty clauses for leaving.

3. Monthly Minimums or Other Minimum Factoring Requirements

Some factoring companies require clients to commit to factoring a minimum number or dollar amount of invoices every month or every quarter. If they fail to meet these minimums a penalty fee is assessed. Being locked in to factoring minimums may not be what is best for an organization. Factoring is a financing tool meant to help an organization grow more quickly, but mandated factoring isn’t always what’s best for a business. We don’t require clients to commit to factoring minimums. They have the freedom to factor only when it’s best for their business.

4. Introductory Rates, Fees or Other Conditions

Some factoring companies offer low introductory rates to new clients, then down the line they lower advance rates and raise factoring fees, quickly wiping out any savings enjoyed during the introductory period. In other cases, factoring companies offer what sounds like a low fee, but fine print reveals the fee is applied weekly or progressively, which then also costs the client more. We value transparency and simplicity. As our client, you will know what your advance rate and factoring fees will be from the outset, so you can make financial decisions in the best interests of your organization.

5. Lost Customers

When an organization factors invoices, the relationships they have with their customers may also be impacted by the factoring company they chose to do business with. A factoring company that engages in strong-arm collections tactics or pressures customers to pay more quickly could result in lost customers for a business. We view factoring as a tool our clients can use to grow their business and we want clients to use our services for as long as it benefits their bottom line. This view to the long term means we extend a high level of professional, courteous customer service to our clients’ customers as well.

Another way we help improve cash flow without jeopardizing customer relationships is through non-notification factoring. With non-notification factoring, the customer may never know an company is utilizing invoice factoring because the process is white-labeled to the organization almost completely, providing a seamless customer experience.

6. Recourse Factoring Buy-Back Stipulations

Most U.S. factoring companies factor invoices with recourse. Organizations that factor with full-recourse may be required to buy back an invoice at its full face value if a customer does not pay within a given period of time, if the customer cannot pay due to insolvency or for any other reason.

We do offer full-recourse factoring, but we also offer non-recourse factoring services that help minimize the organization’s risk from bad debt. With non-recourse factoring, we assume the credit risk for the invoices factored by an organization, and (in most cases) absorb the loss if a customer is unable to pay.

Eliminate the Hidden Costs of Invoice Factoring

Transparency with our customers is one of our guiding values. We are proud to offer receivables financing that is free of the hidden costs of invoice factoring, including the add-on costs some other factoring companies use to produce additional revenues. Ideally, your factoring fee will be your “all in” cost of financing.

Since it is likely your intention to utilize invoice factoring to speed up the incoming cash flow from invoices currently on your books (and thus get that working capital back into your business more quickly) it stands to reason you should compare the advance amounts and factoring fees offered by factoring companies (or Factors). As an educated, astute shopper of these services, you should never sign on the dotted line until you know exactly how the program works, all the fees that may apply, and how factoring your invoices could impact your profitability.

If you have questions about your factoring contract, want a quote for comparison or would like to find out more about our services, request a quote. We will be happy to provide you with a factoring proposal which you can compare against your current agreement.

6 Reasons to Revise Your Receivables Factoring Agreement

6 Reasons to Revise Your Receivables Factoring Agreement

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As your business changes and grows, its financing needs will too. Here are six signs you should have your receivables factoring agreement reviewed and re-quoted.

6 Signs You Need a New Receivables Factoring Agreement

As with any other supplier or vendor, it’s only natural that you will review your invoice factoring agreement from periodically to ensure you have a factoring agreement in place that’s best for your business. Here’s why “now” might be a good time to take a fresh look at your agreement and your receivables factoring company.

1. The end of the invoice factoring contract term is approaching.

Just as you would review any other type of contract, before you renew your receivables factoring agreement you should review it and compare it against other offers. Factoring companies might be willing to eliminate unwanted clauses or offer you better terms or rates – or you may find that another factoring company is willing to do so.

You should pay very close attention to the fine print in your current agreement that would require you to provide your current factoring company with 30, 60, or even 90-day notice to terminate your agreement. Unfortunately, if you miss the termination window you may be forced to continue factoring with the same organization for another year or more.

What is receivables financing?
Receivables financing (also known as accounts receivable invoice factoring) is a business finance tool that provides your organization with immediate access to money owed to your business by your customers, without waiting weeks – or months – for the invoices to be paid. Find out more about Receivables Financing.

2. Increases in factoring fees or rates.

Since improving cash flow is an important priority for most businesses that factor receivables, when profits are negatively impacted by increases in costs or rates it’s important to evaluate whether your current agreement is the right one for your organization.

3. Disappointment with the customer service your receivables factoring company provides.

Poor customer service impacts more than just the client who is factoring invoices, it often affects their customers as well. When evaluating how satisfied you are with your factoring company, you may also wish to speak with some of your most valuable customers to ensure that the communications and collections being conducted by your factoring company are also beneficial to the relationship between your business and its customers.

Our goal is to provide the level of service that leads to high client retention and referral rates. We want clients to choose to stay with us throughout the time they employ invoice factoring as a finance tool and to feel comfortable referring colleagues to us on a regular basis.

4. Hidden fees are adding up.

An invoice factoring fee (usually a percentage) is only one of the potential costs that could be hiding in an invoice factoring agreement. We will review any agreement presented to you to explain the fee structure.

We help our clients get factoring contracts that are transparent and simple, with factors that don’t tack on fees for administrative work, schedule processing, proposals, due diligence, customer credit checks or notifications. Hidden fees might seem small but can quickly add up and negate some of the benefits that factoring invoices should be generating when it comes to your organization’s cash flow and working capital.

5. Not meeting monthly minimums (you want to factor fewer invoices).

If your current factoring agreement requires that you factor a minimum number (or amount) of invoices each month and you find that you do not need to (or do not want to) factor up to the minimum, it is a good time to reach out for new terms from your factoring company or to explore competitive proposals.

We have clients who want to use factoring only when its right for their business with contracts that enable them to factor as many (or as few) invoices as they desire. We believe that letting factoring clients retain control of these types of decisions is important, because it has a big impact on their organization as well as how satisfied they will be with our receivables financing service. Invoice factoring becomes an even more practical and helpful financing solution when you stay in control.

6. You simply don’t want to be locked in to a long-term contract.

Depending on the agreement you choose, you won’t have to sign a long-term factoring contract. Remember that this can be a matter of negotiation which could encourage Factors to offer you an agreement with lower rates, higher advances or some other perk.

We want to earn your business and referrals. We believe that once work with us you’ll be so pleased with the level of professional and personal service that you won’t want to leave. If at any time, you feel that the level of service provided by our team isn’t meeting your needs anymore, you’re free to leave without the fear of a long-term contract or exit penalties hanging over your head.

Ready to get a new receivables financing quote?
Whether this is your first request for an invoice factoring proposal or you’re already factoring invoices, we would be happy to give you a free, no-obligation invoice factoring proposal – you could go from approval to funding in days.