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.

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.

 

Staffing Agency Loans

9 Ways to Compare Staffing Agency Factoring Companies

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Expertise in recruiting, hiring and placements and customer service sets the best staffing companies apart from their competitors, and the same holds true for the best staffing agency factoring companies. Here are the questions to ask when considering which invoice factoring company to choose.

What the Best Staffing and Temp Employment Factoring Companies Do

The business model of most staffing agencies and temporary employment agencies makes invoice factoring almost a must-have financing tool. With time, money and payroll expenses preceding client payments by weeks (or even longer), factoring staffing invoices can provide an employment agency with improved, more consistent cash flow, the money needed to cover operating expenses and payroll, and funding that can be reinvested more quickly to help the agency grow.

Find out more about invoice factoring for staffing and temporary agencies here.

Evaluate Staffing Agency Factoring Companies by 9 Measures

Companies that factor invoices for temporary employment agencies and staffing agencies have policies and contracts governing the way that they do business. These practices can vary widely and there can be all kinds of hidden fees or potential penalties in the fine print.  It is important to ask questions and read the fine print that resides in the contracts and agreements staffing agency factoring companies require clients to sign.

Depending on which terms are most important to your agency, we can design an agreement for your agency with these types of characteristics:

1. Retain Control: Factor only when it is in the best interests of your staffing agency! You will not be required to factor a minimum number or dollar amount of invoices. Plus, you may have the option of retaining control of sending invoices or delegating the work of generating and mailing invoices to the factoring company, thereby reducing the amount of money and time needed for receivables management in the process.

2. Professional Customer Service: A high level of service and performance earns client patronage and referrals.

3. Competitive staffing agency factoring fees and factoring with low or even no holdbacks.

4. Competitive Advances: Clients often receive up to 95% of the face value of invoices factored (or even higher on large invoices or with volume discounts).

5. No Long Term Contracts: No requirement to sign long term contracts; we  want to earn your repeat business and referrals through performance.

6. No Early Termination Fees or Hidden Auto-Renewal Windows: Check the fine print! Some factors charge hefty early termination fees and hide other penalties in auto-renewal windows that might require as much as 120 days advance notice. Early withdrawal penalties are often as high as 10% of a client’s line of factoring credit, making them almost un-payable.

7. Non-Recourse Factoring: Non-recourse factors assume the credit risk for invoices purchased, which reduces (or completely eliminates) the client’s financial risks from bad debt.

8. Fast funding with no added funding fees.

9. Transparency—No hidden fees: Factoring agreements that are free of application fees, notification fees, reserve release fees, schedule or invoice processing fees, credit check or due diligence fees – any / all of which can drive up the real cost of receivables financing.

We understand that the way a company does business day in and day out is what builds their reputation and long-term success. So we offer staffing agency factoring programs that reflect the clients’ needs and preferences.

When we help you evaluate the pros and cons of staffing agency factoring companies, we work through questions like these so you can decide which agreement is best for your business. Use this checklist to evaluate which staffing agency factoring companies you should consider as a partner who can help you grow:

  • What is the factoring fee structure?
  • Can I get a free quote?
  • Are there costs for setting up my account or doing due diligence?
  • What are the terms?
  • How long does it take to get set up?
  • How quickly will I receive funding on factored invoices?
  • How do you evaluate debtors?
  • Can I retain control of my invoicing?
  • Do you have monthly minimum requirements?
  • Will I have to sign a long term contract?
  • Is there a penalty for early termination?
  • Is there an auto-renewal window?
  • How fast can you process invoices?
  • Can I get fast funding?
  • Do you charge for processing invoices or schedules for payment?
  • Can I get credit checks on my customers?
  • Are you a non-recourse factor?
  • Do you have the capital to grow with me?

How Factoring Benefits Staffing and Temporary Employment Agencies

Let’s say that your agency has been working hard to land a big employer in your area, and they’ve finally given you a chance to earn their business. It is a great opportunity, but one that comes with financial challenges, too.

For instance, you may need to quickly flood several recruiting channels with new ads and place sponsored content on social networks. With applications coming in, you also need to interview candidates and conduct background and possibly even drug testing of all viable candidates. For those selected and placed, you will then need to meet one or even two payroll runs – all before your client’s first invoice is due!

This dynamic is unique to the temporary employment and staffing industry and makes invoice factoring such a valuable cash flow management tool for staffing agencies. Factoring invoices allows your staffing or temporary employment agency to access the money that is locked down in accounts receivables.

Leveraging assets on the books frees up working capital for faster reinvestment in the agency and ensures your agency will have the money needed to meet payroll and cover expenses such as the advertising and marketing costs incurred to attract new employers or fill your talent pool with qualified candidates. Here’s how it works:

  • Complete services for a client and generate an invoice, then factor the invoice for a small fee.
  • Receive a fast advance of a large percentage of the face amount of the invoice, with any remainder held in reserve (a.k.a. “a holdback”)
  • Your customer remits full payment, then any reserve (or holdback) amount is returned to you.

In addition to the immediate benefit of improving cash flow, your staffing agency also benefits in other ways by factoring invoices. Factoring with a non-recourse factoring company reduces – or even eliminates – your organization’s financial risk from bad debt.

Factoring means less time and resources needed to manage receivables and perform collection-related tasks. Plus, having more money on-hand could allow you to negotiate better terms with your suppliers or extend more favorable payment options to your customers, creating a competitive advantage.  Take the next step and work with one of the best staffing agency factoring companies.

Request a quick quote! This service doesn’t cost you anything, but it will save you time and you can take advantage of our expertise to assist in evaluating proposals.

  • Average monthly sales or amount of invoice to factor
5 Ways Invoice Factoring for Trucking Companies Speeds up Growth

5 Ways Invoice Factoring for Trucking Companies Speeds up Growth

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Factoring is a financial tool trucking companies can use to strengthen operations and grow faster. Here are five ways invoice factoring for trucking companies speeds up growth.

Factoring for Trucking Companies Fuels Growth in 5 Ways

We have yet to work with a freight factoring client that did not want their business to grow. Invoice factoring is one of the tools that is particularly well-suited to the trucking industry, especially for those that want to add more trucks to their fleet, take on new business more quickly or attract the attention of larger shipping clients. If you will forgive the pun, the one thing we have found to be true about all of our freight factoring clients is that they are on the move. Here are five ways invoice factoring for trucking companies speeds up growth.

5 Benefits of Factoring for Trucking Companies

1. Freight Factoring for Trucking Companies Eliminates Cash Flow Slow-Down

Growing companies need consistent cash flow to meet operational needs, take on new business, make needed repairs or invest in new equipment. Our clients commonly cite slow-paying customers or customers with extended terms as one of the reasons that freight factoring is beneficial to their trucking business.

2. Factoring Invoices Facilitates Competitive Advantages

By extension, getting payment on customer invoices within days (or hours) or when they are issued – without waiting for customers to pay – can create an instant competitive advantage for a trucking company. Since slow-paying freight customers or customers with extended terms no longer affects their cash flow, they can extend better payment terms that can help them bring on new accounts.

3. Factoring Freight Bills Frees Up Working Capital

No business can grow without access to working capital. If working capital is locked down in customer receivables, it cannot be put to work to pay operating expenses, meet payroll, cover the cost of taking on new business or be put to work to add new trucks to the fleet. Lack of cash flow can stall your growth; access to working capital lets you reinvest in your business more quickly!

Trucking companies that factor invoices get almost immediate access to the working capital that could otherwise be locked down for weeks – or even months – while waiting for customers to pay. You can calculate how much working capital may be tied up in your receivable invoices using our freight factoring calculator.

4. Factoring Invoices Provides a Trucking Company with Financial Leverage

Not only does factoring freight bills give you the ability to become more attractive to potential customers, it also gives you leverage with suppliers and vendors. With working capital in hand – instead of locked down in customer receivables – you can negotiate more favorable terms and savings.

This type of cost savings means improved profitability for your trucking business. The amount you save with vendor quick-pay discounts could even be far more than the factoring fees needed to speed up cash flow.

5. Factoring Freight Bills Reduces Operational Costs

Saving money with vendors and suppliers is only one way that factoring produces a cost-savings for a trucking company. In addition, operational costs associated with bookkeeping for accounts receivables and any associated collections activities are reduced – or even eliminated altogether.

In addition, trucking companies that factor without recourse (non-recourse factoring) can also reduce or eliminate their risk from bad debt, since the factoring company assumes the credit risk.

Freight Factoring Companies that Put You Driver’s Seat

Freight factoring (or invoice factoring) refers to the act of selling freight bills and/or customer receivable invoices to a factoring company. Using factoring for trucking companies means the carrier does not have to wait for customers to pay. They can make instant reinvestments that allow them to get back on the road and take on new business, add trucks or leverage their availability and reputation to serve bigger freight accounts.

Every factoring program is a little bit different. Our goal is to provide freight factoring services tailored to the unique needs of your business. We want you to be able to retain more control and eliminate any unpleasant surprises. Our factoring agreements include favorable terms like:

  • Low freight factoring fees
  • Competitive advances
  • No long-term contracts
  • No monthly minimums – factor only when it’s right for your trucking business!
  • Small invoices welcome – factoring for trucking fleets of all sizes!
  • Spot factoring and micro-factoring
  • Fast funding options
  • Credit checks to vet new customers and set limits
  • No application or due diligence fees
  • No hidden administrative fees to drive up the cost of factoring
  • Professional customer service with an assigned account manager
  • Non-recourse factoring for additional financial protection
  • Non-notification white-labeled factoring options

It’s free and easy to apply to see if freight factoring makes financial sense for your trucking business. Complete an application or request a quick quote and you could go from approval to funding in a matter of hours.

 

what is invoice factoring

What is Invoice Factoring?

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Invoice factoring is a business finance tool that gives an organization nearly immediate access to money their customers owe them without waiting 30, 60, 90 days – or even longer – for the invoices to be paid.

Instead of waiting for customers to pay, the business can factor an invoice with a factoring company for a small fee (called a factoring fee) and receive an immediate advance, which could be up to 95 percent (or even more) of the invoice amount.

Why do companies factor invoices?

Though the need for expedited or more consistent cash flow is the reason most companies factor invoices, some of the other common reasons factoring clients cite include:

  • Need to unlock working capital to fuel business growth
  • Working capital can be leveraged for better terms with suppliers
  • Customer accounts with generous terms, often 30-90 days
  • Need working capital to take on larger accounts or big orders
  • Slow-paying customers
  • More consistent cash flow
  • Better ability to meet operating expenses and payroll
  • Capital expenditures like equipment purchases, repairs, renovation, or expansion

The practice of invoice factoring is centuries old and has played an important role in business finance. Any organization of any size that provides goods or services to other businesses, government agencies, retailers, or other commercial organizations on payment terms may be able to factor receivables to improve cash flow and unlock working capital.

What type of businesses factor invoices?

Factoring clients come from many different industries where invoice factoring is commonly used to expedite cash flow, including:

  • Staffing and temporary employment agencies (security services, nursing, etc.)
  • Business consulting and B2B business services
  • Trucking, transportation, logistics
  • Supply chain distributors and manufacturers
  • Vendors selling through Costco, Walmart, and other mass retailers
  • Textile, clothing, accessories, and other wholesalers
  • Oil and gas (and all gas and oil field contractors)
  • Energy and utilities companies and contractors – and others

Nearly any type of company that invoices customers for payment or waits more than 15 days or more to get paid after completing delivery of goods or fulfillment of services might be able to improve cash flow immediately by factoring invoices.

How does the invoice factoring process work?

Invoices factored are typically funded within 1-2 business days – up to 95 percent (or even more) of the face value of the invoice, with the remainder placed in reserve as a holdback, pending customer payment of the invoice.

As an example, if a businesses completed delivery of goods or services to a customer and generated an $18,000 invoice, with net 30 (or even longer) terms, they could unlock most of that working capital within hours instead of waiting weeks or even months on payment.

Assuming a factoring fee of 3% and an advance rate of 95%, here’s how it would work:

Invoice Factoring Process Overview
Day 1 – Generate a $18,000 client invoice and factor it
 – 24-48 hours Receive an advance of $17,100 (95%)
Factoring company earns $540 (3% factoring fee)
Day 30+ Receives the $360 holdback (2% of the invoice amount) after the invoice is paid

What are the benefits of invoice factoring?

Faster cash flow!

Businesses that want to expedite payment of accounts receivable invoices can turn to a receivables factoring company. Instead of waiting on customer payments, they can factor a customer invoice on the same day it is generated and receive an advance of up to 95 percent of the face amount of the invoice right away.

Advance rates may be even higher, and factoring fees even lower for larger invoices or for companies who factor on a regular basis and receive a volume discount.

Factoring receivables enables you, a business owner, to focus on growing your business rather than chasing invoices or performing collections. They gain almost immediate access to working capital by speeding up cash flow so they can reinvest in their company much more quickly.

Factoring receivables could also be the key to positioning your business to be able to take advantage of emerging opportunities.

Organizations that factor invoices expedite cash flow, which means they have more flexibility to meet operational expenses. They have the flexibility to extend more generous payment terms to their customers as a competitive advantage and can reinvest working capital in their business more quickly in order to expand, service larger accounts, or take on new customers.

There are also additional benefits for businesses that choose non-recourse invoice factoring over factoring with full recourse.

Non-recourse factoring is less common in today’s economy because non-recourse factors assume the credit risk for the invoices they purchase. When you factor invoices with a non-recourse factoring company, you may be able to completely eliminate financial risk from bad debt. Find out more about factoring invoices with recourse vs. non-recourse factoring companies.

Speed up cash flow and grow your business faster by factoring invoices instead of waiting 30, 60, 90 days or longer for customers to pay.

Since we have competitive rates and fees, working with us will not cost your business more, but it could help you get a better factoring agreement. You want to work with an invoice factoring company that goes from approval to funding quickly and looks for reasons to say “Yes!” when you submit invoices for factoring. Our factoring services offer low fees, high advances, and flexible terms, such as:

  • No long-term contracts
  • No monthly minimums (you choose when and how much to factor)
  • Retain control of billing your customers, or let the factoring company do the work
  • Non-recourse factoring (the factoring company assumes the credit risk)
  • Spot factoring
  • Micro-factoring
  • Small invoices welcome!
  • Credit checks to help you vet new customers
  • No application or due diligence fees
  • No hidden fees
  • Fast approvals and funding

Most importantly, we promise a high level of customer service to our factoring clients. We want you to work with a financing partner who understands your preferences and unique business needs, saving time and reducing the stress of managing receivables. Take the next step and request a free, no-obligation factoring quote to determine if this business finance tool could help your company grow faster.

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.

  • Average monthly sales or amount of invoice to factor
The Benefits of Non-Recourse Factoring

What is Non-Recourse Factoring?

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When an organization is considering expediting their cash flow through accounts receivable factoring it is important for that organization to understand the value that is provided by choosing to work with a non-recourse factoring company.

Comparing non-recourse factoring to factoring with full recourse shows some of the benefits of choosing a non-recourse factoring company.

Beyond Factoring Fees and Advances – The Benefits of Non-Recourse Factoring

When a business is comparing quotes for factoring services, they are often solely focused on the fee that will be charged or the advance rate they will receive on factored invoices. But fees and advances are just the tip of the iceberg. Astute business owners will also look at the additional benefits provided to them by choosing to work with a non-recourse factoring company in order to reduce – or even eliminate – their financial risk from bad debt.

First, an invoice factoring (a.k.a. receivables factoring) primer. Invoice factoring is a finance tool that can be used by organizations that invoice business customers upon delivery of goods or completion of services.

When an organization (called a “factoring client”) factors an invoice, they sell it to a factoring company, or “Factor”. The Factor that buys the invoice provides the factoring client with an advance on the invoice (we offer fast funding on advances as high as 90 percent of the face value of the invoice) for a small fee (our factoring fees start at 5 percent).

Using invoice factoring, your organization gains immediate access to cash flow that might otherwise be tied up in a customer invoice for weeks – or even months. With improved cash flow, you can take on new business more quickly and ensure that money will be on hand to meet operating expenses.

There are other benefits to factoring invoices as well. Organizations that choose to factor invoices might do so for a variety of reasons; such as:

  • speeding up cash flow in order to take on new business more quickly
  • maintaining more consistent cash flow in order to meet expenses more easily
  • reducing costs (payroll, supplies, mailing, etc.) attributable to receivables activities, including collections costs
  • eliminating cash flow challenges caused by slow-paying customers
  • extending longer payment terms to customers as a competitive advantage
  • or to resolve other common cash flow challenges

Comparing Non-Recourse Factoring to Recourse Factoring

As it pertains to a factoring company, the word “recourse” references the extent to which the factoring company is willing to assume risk of non-payment on factored invoices.

Recourse factoring companies fund advances on invoices with the understanding that the organization will be obligated to buy them back if they go uncollected (for any reason). If an invoice remains unpaid for a certain period of time, the factoring client may be required to buy it back and may also be obligated to compensate the factoring company for administrative and collections costs incurred while trying to collect payment from the organization’s customer. Reduced financial risk for the factoring company sometimes means factoring with recourse offers lower rates, but not always.

Non-recourse factoring companies assume more financial risk from bad debt than those that factor with recourse. When a non-recourse factoring company buys an invoice, the Factor assumes the credit risk. If the factoring client’s customer is unable to pay due to insolvency and other credit-related risks, the non-recourse factor assumes the financial loss.

Organizations that factor invoices with a non-recourse factoring company can reduce, or even eliminate, their financial risk from bad debt, since the non-recourse factor assumes the credit risk. Generally, the only time a factoring client would be required to buy back an invoice from a non-recourse factoring company would be in a case where the invoice itself is in dispute, such as when an order has been returned for some reason.

How the Factoring Process Works with Non-Recourse Factoring Companies

Working with a non-recourse factoring company is important to many of our clients. They use factoring services to free up working capital in order to operate more efficiently and grow more quickly. But they also enjoy the peace of mind of knowing that, once an invoice has been factored, they no longer need to worry about financial risk from bad debt, performing collections activities or even invoicing the customer, depending on their factoring agreement.

Get a Free Quote for Non-Recourse Factoring

We would be happy to answer any questions you might have about invoice factoring with a non-recourse factor or provide you with a no-risk, free, no-obligation quote for non-recourse factoring services so that you can determine whether this type of finance tool would benefit your organization.

Ready to apply? Complete a one-page application online or request more information about non-recourse factoring using the form using the form below.

  • Average monthly sales or amount of invoice to factor
5 Benefits of Using a Staffing Agency to Improve Quality of New Hires

Staffing All the Way to the Bank – 5 Benefits of Using a Staffing Agency

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Hiring costs for even an entry-level employee might be several thousand dollars. Here are five benefits of using a staffing agency that make them an invaluable resource for hiring managers.

Steep Recruiting and Hiring Costs Highlight Benefits of Using a Staffing Agency to Get Better New Hires

For hiring managers and business owners, turnover is a four-letter word. The cost of recruiting, hiring and training new staff – even entry level staff – can run into the thousands of dollars. In fact, data recently published on Investopedia.com indicates that the real cost of hiring a single employee at just $8 per hour could be as much as $3,500.

Of course, that’s only the cost of making a good hire. The Society for Human Resources Management (SHRM) estimates that the cost of making a bad hire could be as much as 5x their annual salary, and that number goes up the longer they remain in the position.  Among the benefits of using a staffing agency are reduced direct costs when it comes to hiring activities and the ability to get better new hires from the start.

5 Benefits of Using a Staffing Agency to Improve Quality of New Hires

1. Focus

Working with a staffing agency allows your team to stay focused on the tasks and tactics that make your business most profitable. With fewer tasks to be completed in-house, distractions are minimized. Let a staffing agency do the busy work of filling your candidate funnel and eliminating those who are not qualified or who are not likely to be a good fit for your company’s culture.

2. Expert Advice

Staffing agency recruiters are trained and experienced experts who can efficiently sift through the hundreds – or even thousands – of responses your job posting may solicit and bring you a short list for consideration. What’s more, their insights about candidates or their resumes can be invaluable in helping you decide which candidates should make the cut and move on to an interview.

3. Better-Informed Candidates

Few things are more frustrating within the recruiting and hiring process as moving a candidate all the way through the process to the point of making an offer, only to discover that they had unrealistic expectations about the job, its salary range or responsibilities. One of the benefits of using a staffing agency is that they give candidates information about your company and the position ahead of time, so that candidates who want to self-select out of the process for any reason can do so, saving you time and resources in the process.

4. Pre-Screened for the Fast Track

Recruiting and hiring processes can take months! You can short-cut the process by working with staffing agencies who have already recruited, interviewed and pre-screened candidates who can be in place within a day or two, instead of weeks or months.

5. Try Before You Buy Options

Having the ability to work with candidates on a trial basis as temporary employees placed through a staffing agency gives you the opportunity to bring in top talent and see how they fit within the team and perform without making a long-term commitment. It can be equally positive for candidates themselves as they have a chance to find out whether the job and your corporate culture is a good fit for them. If you have experienced the pain and high cost of making a bad hire, this reason alone might make the benefits of using a staffing agency preferable to doing the recruiting and hiring yourself.

Benefits of Using a Staffing Agency – Calculating the Cost of a New Hire

The cost of a new hire is far greater than the cost of posting position openings or running a new hire screening, and not all costs can be measured in dollars. For instance, how can you calculate the negative impact of turnover on an understaffed department, or time lost to productivity when new hires are shadowing other employees?

If you are trying to come up with the real cost of recruiting and hiring in your organization in order to weigh the benefits of using a staffing agency against completing the work in-house, here are some costs to consider:

  • Time spent writing job post ad copy
  • Time spent researching job boards, social networks and publications for placements
  • Cost of placing position openings in print and online job boards
  • Time spent reviewing submissions, monitoring all placement channels and responding to applicants
  • Resources (time, money and materials) spent on written responses to applicants
  • Time spent doing pre-interview phone screenings and setting up interviews
  • Time spent conducting interviews and lost productivity for interview participants
  • Time spent conducting reference checks
  • Time and resources spent on pre-employment screening/s
  • Food, beverages, lodging or travel costs
  • Cost of reimbursement for parking or transportation

It’s a lot! When you begin to tally up the cost of time spent on-boarding new hires, doing paperwork, setting up payroll and benefits, completing training and lower productivity while they get up to speed, you can begin to understand the high cost of employee turnover and better appreciate the benefits of using a staffing agency, especially when it comes to improving the cost of new hires.

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Corsa Finance offers competitive staffing factoring rates, high advances and fast funding. If you are looking for a staffing payroll funding company or staffing factoring services, we invite you to get a free, no-obligation quote. You could go from approval to your first funding in a few hours!

  • Average monthly sales or amount of invoice to factor
6 Invoice Factoring Benefits Can Turn a Small Business into a Big Player

6 Invoice Factoring Benefits Can Turn a Small Business into a Big Player

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If your small business invoices its customers using accounts receivable invoices, invoice factoring benefits could help you turn your small business into a big player – in nearly any B2B industry in the US.

Competitive Advantages Among Invoice Factoring Benefits for Small Businesses

Often, a small business can provide a higher, more personalized level of service to its customers than its larger competitors; but this does not always translate into a true competitive advantage for one simple reason: bigger organizations have access to more working capital.

While a small business may be waiting for customers to pay or resources to be freed up, larger competitors already have the money needed to invest in the next project, shipment or production run as well as spare resources at the ready to carry them out.

When it comes to cash flow, why play the waiting game?

By factoring invoices instead of chasing customer payments, a small business can gain access to the working capital tied up in open receivables, without waiting for customers to pay. This could give your small business or startup the edge needed to compete with large rivals in order to take on new orders more quickly, fulfill larger orders or serve larger customer accounts.

6 Invoice Factoring Benefits for Small Business

1. Reducing Overhead and Expenses

Your invoice factoring company can handle your receivables from beginning to end if that’s what works best for you. Your organization reaps the savings in overhead for the time, money and personnel that would be needed to first generate invoices then the time and energy to track and receive payments.

2. Eliminating or Reducing Bad Debt Risk

Many factoring companies provide clients with access to commercial credit checks on both new and existing clients. This gives you, the business owner, added peace of mind in trusting that you will be paid for the goods and services delivered by your company. You can vet new customers for credit worthiness and periodically reassess customer limits.

Working with a non-recourse factoring company gives your small business additional financial protection. When you use non-recourse factoring, the factoring company assumes the credit risk for the invoices we factor. If one of your customers can’t pay their invoice for credit-related reasons, the factoring company absorbs the loss, not your business.

3. Giving You Leverage with Suppliers and Vendors

Having working capital in hand (instead of only on the books) provides you with leverage you can use to negotiate better terms, including cash discounts or volume discounts with your own suppliers and vendors.

4. Improving your Credit Rating

Since factoring invoices gives you more predictable, steady cash flow, you can pay your bills on time or pay down debt more quickly, which can help to improve your business credit score and may help you improve your personal credit score as well.

5. Reducing Unnecessary Expenses

If you are forced to wait for customers to pay invoices before you can pay your own bills or creditors, you may also incur late fees and additional interest charges. Factoring invoices so that you have the money needed to pay your bills, loan payments and other expenses on time means that you won’t incur unnecessary late fees and interest.

6. Giving You Access to More Business Growth Resources

Our goal is to help you grow your organization from where it is today to where you want it to be tomorrow. From your account manager to the business resources and articles you’ll find on our website and blog, we continually work to provide our clients with more resources they can use to grow.

Bring invoice factoring benefits to your small business.

Get a free, no-obligation quote – you could go from approval to your first funding in hours. 

  • Average monthly sales or amount of invoice to factor
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.

  • Average monthly sales or amount of invoice to factor
Business Turnaround Strategy and Invoice Factoring Go Hand in Hand

Business Turnaround Strategy and Invoice Factoring Go Hand in Hand

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The top priority in most business turnaround strategies is to speed up and stabilize cash flow, giving a company time to cut expenses, grow sales and regain momentum. Invoice factoring can play a key role as part of a business turnaround plan; here’s why.

Top Business Turnaround Strategy Priorities for Distressed Companies

Implementing tactics for stabilizing cash flow and collecting payments on invoices as quickly as possible is usually priority one when business turnaround consultants come in to help a struggling business. Why? Simple: Speeding up cash flow buys time for a struggling business – time that is critical to allow business restructuring, operational, personnel and procedural changes to be enacted, take root and begin making a difference.

In Best Practices for Turning Around Distressed Companies: The First Steps, the CEO and managing partner of NYC Advisors LLC advises that step one in a business turnaround strategy is to get control of cash and cut unnecessary expenses, including “Collecting your accounts receivables as quickly as possible,” even if it means offering cash discounts for faster payment.

In lieu of offering cash discounts to customers for remitting payments within the first few weeks after an invoice goes out, a struggling business could receive payment on a customer invoice within 1-2 days of when the invoice is generated by factoring, or selling, the invoice to a factoring company for a small fee (called a factoring fee). Furthermore, the factoring fee charged for same day payment on customer invoices will probably be significantly less than a quick-pay customer discount and may even be tax deductible.

Invoice factoring could be preferable to offering customers early payment discounts for many different reasons; such as:

  • Early pay discount still means a delay in collecting on receivables of a few or even several weeks
  • There is no guarantee that a customer will take advantage of an early pay discount, especially if it’s a fairly minimal percentage
  • If early pay discounts are offered to all customers, over time a business could earn significantly less than it might have otherwise collected
  • Customers may come to perceive early pay discounts as “the real price” of goods or services and devalue them in the process
  • Customers may compare terms and demand that their terms be equally favorable to others
  • Early pay discounts may need to be fairly significant (5%, 10% or even more) to get customers to pay right away, whereas your factoring fee will likely range between 4-8%.

Invoice factoring offers a business tools that can stabilize cash flow right away, at a minimal cost. We have programs with factoring fees that start as low as 4 percent which is less than many customer early-pay discounts. In addition, instead of waiting a couple (or several) weeks for customers to pay, factoring clients can get free same-day funding on invoices factored with us, with advances up to 90 percent of an invoice amount.

How Invoice Factoring Can Fuel a Business Turnaround Strategy

For struggling or distressed companies, low cash flow is often the most pressing challenge to address. Speeding up cash flow is a top priority. Without adequate and consistent cash flow, a struggling business will not have time to remediate the problems with its pricing, personnel, marketing, purchasing, overhead and other operational areas that can turn a struggling company back into a thriving enterprise. In other words, speeding up cash flow gives a struggling business the working capital needed to put other components of its turnaround strategy into motion.

Invoice factoring enables businesses that invoice customers for payment on terms to collect payment on invoices immediately, without waiting for customers to pay, for a small fee (called a factoring fee). We can help distressed companies get agreements into place so they get an advance of over 90 percent of the face value of the invoice within 1-2 days of when an invoice is factored at a small cost (or factoring fee) which could be as low as 4 percent.

Here’s how the process works:

DAY ONE Client factors a $10k invoice $10,000
Receive a 93% advance on the invoice $  9,300
Factoring company earns 4% $     400
3% held in reserve $     300
DAY 30, 45 or even 90+ Customer remits payment in full
3% reserve returned to client $     300

 

In this example, factoring the invoice gives a struggling business access to as much as $9,300 on the same day the invoice is generated, and ultimately collects another $300 for a total of $9,600 collected. If the same business elected to extend a 5 percent within 14 days early pay discount to its customer instead, it might wait up to two weeks to collect any money on the invoice at all, and still only receive $9,500 of the invoice amount.

If the customer elects not to take advantage of the early pay discount, the business could receive the full amount but may wait 30, 60 or even 90 days to collect on the invoice. In addition, the business owner or bookkeeping staff may have to invest hours of time on collection phone calls and reminders before the customer pays.

Another advantage of choosing invoice factoring to speed up cash flow as part of a business turnaround strategy (instead of offering customer fast-pay discounts) is that the business can continue (or begin) to extend favorable payment terms to its customers as a marketing advantage. Since the business can collect on the invoice on the same day it’s generated, it does not have to spend time or resources chasing payments or worrying about how quickly a customer will pay.

Benefits of Our Invoice Factoring Services for Your Business Turnaround Strategy

Our goal is to help our clients grow their organizations from where they are today to where they want to be tomorrow. This mantra has impacted the way Corsa Finance tailors invoice factoring programs for our clients and how we do business. For distressed companies, our program can make invoice factoring even more effective as part of a business turnaround strategy, with potential benefits such as:

  • No factoring minimums – clients only factor when it’s best for their business
  • No long-term contracts – use factoring as a transitional, short-term or long-term solution
  • Low factoring fees
  • Competitive advances and fast funding
  • Personal, professional customer care with a knowledgeable account manager
  • Program tailored to the needs of the business instead of a “one size fits all” approach

A free, no-obligation quote is all it takes to find out how factoring invoices can instantly speed up and stabilize your organization’s cash flow, creating a consistent flow of working capital that enables your business to regain market share, keep customers, employees and vendors happy and put your company on a faster track for growth.

We would be happy to provide you with a free, no-obligation quote for invoice factoring services, even it you simply want to compare it with your current factoring agreement to be sure your business is getting the maximum benefit from receivables financing: 

  • Average monthly sales or amount of invoice to factor
Solving Slow Cash Flow with Invoice Factoring

Beyond Price and Profit – How Slow Cash Flow Can Hurt You

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Profitable business can still be poor ones. Slow cash flow can slow or stall growth. Plan for healthy cash flow, not just profit margins, to build a growing, sustainable business.

High Profit Margins Won’t Keep Slow Cash Flow from Hurting a Growing Business

The number one reason businesses go under is not lack of profits, but lack of cash, or slow cash flow. It is not enough to plan and price for profitability. To be successful, grow and thrive, you have to accurately forecast and plan so that your business has adequate money coming in.

In 10 Things Every Small Business Needs to Do, Bplans.com cites the number one reason small businesses go bankrupt as slow cash flow — not lack of profits. It’s a good reminder that accurately predicting the ebb and flow of your small business cash flow and planning accordingly is going to be a key factor for your success.

Small business cash flow is represented in financial statements in essentially three forms:

  • Operational cash flow is money coming in or going out as a result of an organization’s business activities; obviously to be sustainable, a business needs to have more money coming in than going out (although short term periods of negative cash flow should occasionally be planned for and *managed).
  • Investment cash flow is money received from the sale of long-life assets or spent on capital expenditures (things like investments, acquisitions or assets expected to have a long life)
  • Financing cash flow is money received from the issue of debt and equity or money paid out as dividends, share repurchases or debt repayments

Small business cash flow can be impacted positively or negatively for a number of different reasons:

  • Sales (volume) higher or less than expected
  • Payment terms that you extend to your customers
  • Naturally occurring seasonal or cyclical highs and lows
  • Interruptions to the customer buying cycle, such as economic recession or concerns
  • Introduction of new technologies, additional competitors or other changes to the marketplace
  • Influx or depletion of numbers of potential customers in your target markets
  • Equipment failures or facility deficiencies
  • Lack of inventory or space needed to achieve adequate sales volume

Apart from the unexpected, many of these factors that can create slow cash flow should be considered as you draw up your business plan and revisit your long-range plan from year to year. In fact, many of these conditions should reveal themselves in the SWOT and PEST exercises common to most (formal) small business plans, long range plans or marketing plans.

Solving Slow Cash Flow with Invoice Factoring

One way to mitigate short term slow cash flow challenges is to take advantage of small business funding options, like those provided by Corsa Finance. We offer small business cash flow financing through invoice factoring (also called accounts receivable factoring).

Small business funding through invoice factoring occurs when a company that invoices their customers for payment factors – or “sells” – the invoice to a factoring company at a discount (for a low factoring fee). When they do so, they receive up to 93% of the invoice amount immediately instead of having to wait for customer to pay the invoice. Once the small business’s customer has paid the invoice any amount held in reserve goes back to the small business, too. Factoring can eliminate the problem of slow cash flow completely, since invoices can be factored on the same day a customer invoice is generated.

Better cash flow = better business performance and growth!

Whether you employ one of our business finance tools to improve cash flow and get access to working capital or you have another means of financing, having adequate cash flow to meet operational needs and to execute business growth strategies is critical for the long term health and success of your small business.

With slow cash flow, you may have trouble meeting day to day operational needs, you might come up short for payroll, or you might find yourself unable to make capital investments in order to grow. With expedited cash flow, you will be able to execute many business growth strategies, such as:

  • Expanding, renovating or remodeling
  • Meeting expenses on time, including payroll
  • Replacing broken, aging or obsolete equipment
  • Hiring additional employees
  • Purchasing larger quantities of inventory or new product lines
  • Adding new service capabilities to your service menu
  • Executing large-scale marketing initiatives
  • And more

We would be happy to help you decide if invoice factoring can help your business. Feel free to contact us at 855-882-6772 or request a free, no obligation quick quote for cash flow financing online and get answers in as little as 24 hours. 

  • Average monthly sales or amount of invoice to factor