Bridging Financing Challenges for Black Business Owners

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.

 

Find out more about financing opportunities

5 Places to Find Creative Startup Ideas

Creative startup ideas abound, if you know where to look for them. If you are an entrepreneur in search of your next creative startup idea, here are five places you might find the next big thing.

Creative startup ideas can help you beat the startup failure odds.

90 percent of 2019 business startups didn’t make the one year mark. But that didn’t quell the enthusiasm of U.S. entrepreneurs! More than 800,000 startups had opened their doors as of March 2020, up over 30,000 from the year before (Statista.com). With COVID-19 changing the way people work in the United States and around the world, the number of individuals dipping their toes into the startup business waters could be even higher going forward.

how many business startups launched in 2020

 

Among businesses that did not survive the first year, reasons for failure included money running out (inadequate financing), being in the wrong market, a lack of research, bad partnerships, ineffective marketing, and not being an expert in the industry.  So where can you find the type of startup business idea that can overcome the odds?

You might also like: Top 10 Reasons B2B Startups Might Fail

5 Places to Look for Creative Startup Ideas

Up or Down the Chain

If you already own one business or were part of a startup, you probably have a lot of expertise in the industry. It might make sense to consider a startup business that would be a natural customer or your last venture or which would be a supplier, vendor or service provider within the same industry. In either case, you will probably come to the table with an idea of how to “do it better” because of your experience.

Emerging Technologies

Keep your eye out for emerging technologies, especially those that have the ability to disrupt business for companies that aren’t able to respond quickly or refuse to recognize that their marketplace is changing.

Abandoned Ideas

Just because someone else failed at something does not mean that the idea does not have merit; plus, you can learn from their mistakes. Think about some of the new products or services that competitors put into play to determine which deserve a second look, and perhaps a second chance.

Under-served Markets

It’s simply not possible for an organization to completely serve multiple market segments; usually one or two will get the most attention in product or service development as well as marketing. When you see a market that is under-served by a particular industry, you are seeing opportunity for someone willing to startup a niche business tailored to their needs and demographics.

Gaps

Did you ever say, “I wish there was a solution for this problem?” You probably aren’t the only one. When you spot an industry, field or community with a gap between a consumer need or want and a business solution, you may be seeing the perfect opportunity for a startup business to fill the opening.

Entrepreneurial Addiction? Solid Planning Turns Startup Ideas into Reality

Since one out of every four startups fail in year one, the right startup ideas could make or break your chances of success. In many cases, clients come to us in the early years of their business when they come up against a need common to many startups and young businesses, that of a need to access working capital more quickly in order to grow. One of the things that gives us the most satisfaction is knowing that we were able to put financial tools into place to help a client with great startup ideas grow to the next level.

While we do not provide true start-up financing, we can help an organization access working capital almost immediately. Companies that sell B2B (business to business) can factor invoices in order to speed up cash flow, instead of waiting on customer or third party payments.

We hear from individuals startup ideas on a pretty regular basis. Hey – we’re entrepreneurs too! We thought that it might be helpful to talk about the types of startups that may do well in the coming years as well as directions that entrepreneurs might look for startup inspiration as they ponder what their next new venture will be.

Several of the reasons startups fail (inadequate funding, poor research, lack of market demand, etc.) can be addressed at least in part through business planning. No matter how excited you are to launch your startup idea, take the time to write a business plan that includes solid projections, a marketing plan, realistic costs, and market research.

 

infographic - startup ideas business plans

6 Ways to Spot Fake Money and Protect Your Small Business from Scams

6 Ways to Spot Fake Money and Protect Your Small Business from Scams

When a rash of fake money found its way into an Oregon community it left residents and many small business owners holding the bag. Cautionary tales provides a good reminder to provide information and training to employees in how to spot counterfeit currency.

Counterfeit Currency Scams a Good Reminder – US Small Business Owners Need to Know How to Spot Fake Money

Can you (and your employees) spot fake money?

Residents selling items on Craigslist in the Corvallis, Oregon area fell victim to thieves using counterfeit $20 dollar bills to purchase electronic devices. Though two of the suspected counterfeiters have already been arrested, the incidence serves as a good reminder to all – including small business owners – of how important it is for employees to know how to spot a fake.

In another example, in 2014, a Richmond, Virginia-based hairstylist and janitor produced (and distributed) between $10,000 and $20,000 in fake bills over the course of two years. She took $5 bills and soaked them in a degreaser, scrubbed off the ink with a toothbrush and let them dry. Then she used a Hewlett-Packer ink jet printer to print images she’d scanned of $50 and $100 notes onto the blank bills. Technology was also a key player when a Lawndale, California resident put more than $7 million in fake bills into circulation between 2004 and 2008. He pulled it off, in part, using ink jet and laser printers purchased from a local Staples store.  (Mental Floss)

In fact, more than $147 million (and as much as $200M) in fake U.S. currency is circulating globally (according the most recent data available from the U.S. Secret Service), and roughly 60 percent of that is circulating in the United States itself. In the U.S., the $20 bill is the most common counterfeit denomination, but the $100 bill is the most common outside of the United States. (CNBC)

The US Secret Service shares how to spot fake currency in their “Know Your Money” pdf including key differences in the portrait of the president or statesman on the bill, differences in the Federal Reserve and Treasury Seals, differences in the printed borders, differences in serial numbers and in the paper itself, including photos.

Download the Know Your Money pdf to email or print out to share with your staff. 

One other way that scammers try to fool unsuspecting sellers is by using real money, but altering the denomination (called “Raised Notes”). It would be easy for cashiers in a fast-paced setting to quickly scan the denomination numbers on the corners but fail to notice that the portrait and words don’t match.

Training clerks, cashiers, wait staff and others who accept money in your organization to review these key areas can help them spot fake currency before counterfeit money scams result in theft from your organization.

6 Ways to Spot Fake Money and Protect Your Business

A wikihow article provides detailed instructions for evaluating money to see if its counterfeit. You could easily take the steps they recommend and turn it into an internal training session for employees and incorporate this training into new hire training and employee policy and procedure manuals.

 They recommend these steps for detecting counterfeit money:

  • Feel the texture of the bill (people who handle good money on a regular basis can often feel the difference in the paper itself between real money and counterfeit bills)
  • Did you know? All denominations of US currency, with the exception of $1 and $2 dollar bills have been redesigned at least once since 1990; compare the bill with another of the same denomination and series.
  • Compared to real US currency, fake bills will often be flat, lack detail and have poor print quality – look for blurry areas, especially in detailed printing areas such as borders.
  • All US paper money has tiny red and blue fibers embedded in the paper. Counterfeiters try to replicate this by printing red and blue onto the paper.
  • Check the serial numbers. Serial numbers on a single bill should match and be evenly spaced and clearly printed. But serial numbers are unique to each bill; if you receive multiple bills that all have the same serial number, they’re counterfeit!
  • Look for security features in all denominations (except $1 and $2 dollar bills). The list of security features included on $5, $10, $20, $50 or $100 can all be found in step 3 on the wikihow article page, as can more detail about each of the recommended steps, and photos that could enhance your employee training materials.

If you do fall victim to a scammer and end up with counterfeit money, you should hand it in to the U.S. Department of Homeland Security. When you hand in the counterfeit note, fill out the Department of Homeland Security’s Counterfeit Note Report located at http://www.secretservice.gov/forms/ssf1604.pdf.

Once a note is handed in with this form, it is considered counterfeit unless proven otherwise. Unfortunately, if you do receive counterfeit currency, you will not be reimbursed for handing it in, so it is truly important for you to ensure that your team is up to date on best practices for spotting counterfeit money.

10 Musts for Small Business Restart Programs

10 Musts for Small Business Restart Programs

These key components should fuel small business restart programs across the United States as the economy tries to rebound from COVID-19 related closures and slowdowns.

  1. Lean ops
  2. Cleaning
  3. Financing
  4. Cash flow
  5. Workstations
  6. Common spaces
  7. Communications
  8. Customer contact
  9. Marketing evolution
  10. Well-being and peace of mind

Small business restart programs must address COVID-19

It’s not just the elephant in the room, it’s the iceberg that sank the economy. In early 2020, COVID-19 disrupted what was inarguably one of the fastest growing economies in nearly all sectors, and for nearly all segments. The U.S. went from all time low unemployment overall and for women and minorities to record high unemployment when many states imposed COVID-19 lockdown and business shut down emergency orders.

Are you ready to restart a small business in the wake of COVID-19?

As elected officials and business owners seek ways to reopen and reignite the economy so that the temporary economic stall doesn’t become lead to long-term negative economic effects, small business restart programs are popping up across the country. If you are a small business owner who is ready to restart or expand operations, here are ten things to consider.

10 Musts for Small Business Restart Programs

1. Lean operations

The pre-pandemic economy was robust and many businesses enjoyed being able to spend more on discretionary items, hire more employees, pursue growth opportunities and expand employee perks, benefits and “extras.” The post-pandemic reality is that many small businesses shut down completely or experienced a significant slowdown. As you restart your small business it would be beneficial to “think lean” when it comes to operations.

Planview.com lists seven principles of lean operations:

  • Eliminate waste
  • Build quality in
  • Create knowledge
  • Defer commitment
  • Deliver fast
  • Respect people
  • Optimize the whole

It is worth noting that lean operations is not just about cutting costs or eliminating waste, but it is also about adding value for customers, employees and other stakeholders. Small business restart programs must focus on efficiency throughout operations.

2. Cleaning and disinfecting the workplace

One of the more challenging aspects of restarting a business after COVID-19 is that the dangers of the virus are often invisible. You cannot spot virus particles on a surface and many people who have the virus are 100 percent asymptomatic or experience only light symptoms, which might mimic allergies or the common cold.

Americans do not want to infect one another or unintentionally bring potentially dangerous germs home to their loved ones or friends. Small business restart programs must address cleaning and disinfecting of the entire workplace, for both customers and internal stakeholders like employees and vendors.

It be advisable to do a thorough cleaning of your business before restarting and to develop a plan for how you will continually re-clean and sanitize commonly touched items (such as door handles, restrooms, break rooms, keypads, etc.) as well as a thoughtful plan for cleaning and disinfecting every area of your business on a regular, and probably more frequent, basis than before.

3. Small business financing

You may be wondering whether to use small business financing tools in general or specific to COVID-19 to restart or resume full operations. The U.S. Small Business Administration lists both regular SBA financing programs and guidelines for Coronavirus funding options including:

  • PPP loans – loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program
  • EIDL loans – economic relief to small businesses and non-profit organizations that are currently experiencing a temporary loss of revenue
  • SBA express loans – small businesses who currently have a business relationship with an SBA Express Lender may be able to access up to $25,000 quickly
  • SBA debt relief – financial reprieve to small businesses during the COVID-19 pandemic

Government programs are only one type of small business financing that might support your efforts to restart your business or return back to more normal revenues. Your bank may also be offering small business financing programs and your business banker could be a good resource for financial advice at this time.

Non-traditional small business invoice factoring could also help you speed up receivables collections, especially if some of your customers are paying more slowly due to current economic conditions. If you are a B2B (business to business) company or you sell goods and services via third party platforms (such as software developers, Amazon merchants, Zulily vendors, etc.), you may be able to get paid in 1-2 business days instead of waiting weeks or months on payments by factoring invoices.

4. Speed up cash flow

Cash flow has always been a key concern for most small businesses; speeding up organizational cash flow might be crucial to restarting and resuming normal operations. Inadequate cash flow can make your company vulnerable to several potential problems, such as:

  • Inability to fund payroll
  • Higher costs (inability to take advantage of early or quick-pay vendor discounts or incurring service and interest charges for late payments)
  • Creating concerns among investors and creditors
  • Failing to reduce long-term debt or increase equity
  • No reserves for short or long-term emergencies
  • No cash to fund repairs, maintenance or growth

Cash flow is our business! We help clients leverage invoice factoring as a financial tool to speed up cash flow. If your company invoices clients on terms or you sell through third party stores or platforms, you probably wait weeks or months to get paid. By factoring invoices, you can eliminate the wait and get paid within days (or hours) of when an invoice is generated or from the time you receiving an earnings statement.

You might also like: 10 Ways to Maximize Business Cash Flow

5. Safe workstations

We all watched as grocery stores and big box retailers updated cashier stations with plexiglass, added plastic, easily-cleanable coverings to keypads and instituted other protections for workers and customers. Whether your business serves customers on-site or not, your employees still expect that their workstations will be conducive to social distancing and contactless interactions. You may also want to provide employees with cleaning and disinfecting products like wipes, hand sanitizer and with masks and other essential PPE (personal protective equipment).

6. Common spaces in the workplace

Employee workstations are not the only spaces that employers must address as part of small business restart programs. Before COVID-19, many small business teams worked in open environments, took meal and rest breaks together in common kitchens and cafeterias, regularly crossed paths in hallways and corridors, met together in conference rooms and utilized communal restrooms.

Employers must take all common spaces into account when restarting as part of their efforts to keep employees safe and healthy. Some ways to mitigate risk in common spaces in the workplace might be to:

  • Temporarily suspend use of common spaces for breaks or meals
  • Redesign common spaces for social distancing
  • Require employees to wear masks, gloves or other PPE in common spaces
  • Designate traffic flows in hallways or corridors
  • Contactless cafeterias and food lockers
  • Provision of food options on-site (so employees do not have to leave work for meals and/or where there are only limited food service options available due to closures)
  • Ensure regular and frequent disinfecting of common spaces and frequently touched areas (appliances, appliance handles, faucets, door handles, chairs and tables, restrooms, etc.)

7. Communications

Customer and employee communications have changed due to COVID-19 and those changes will probably linger far after viral infections subside or disappear altogether. Many employers have decided to extend work-from-home opportunities indefinitely to those workers who can effectively perform remotely. Likewise, businesses are evaluating whether customer and client communications that were previously done in person or at events can be moved online.

Virtual meeting tools like Skype, Facetime, Zoom, StartMeeting and similar platforms have all enjoyed exponential growth as a result of the change in communications. Your business may also want to consider whether now is a good time to expand or revitalize communications programs for social media, email and other online tools that can help you connect with customers and employees in the ways needed to grow your business.

8. Customer contact

For many small businesses, face-to-face customer contact is the most personal and sometimes the most effective option for helping prospects move through the buying journey, supporting new customers, generating referrals and creating an overall positive customer experience. In the current environment, however, it is not the safest form of customer contact and may not even be an option anymore. Laws in your area may even preclude customer contact, at least temporarily.

In other small businesses, such as retail and restaurant businesses, it is an absolutely necessary factor for restarting and resuming business operations. Just as with on-site employees, small business restart programs must address safety conditions for serving customers at your place of business. Modifying the shopping and payment stations, cleaning and disinfecting, and PPE for both employees and customers will all be considerations for restarting.

9. The evolution of marketing

As with other aspects of customer contact, marketing has changed dramatically, and those changes will probably continue indefinitely for the foreseeable future. Businesses plan to decrease investing in in-person marketing tactics, as well as advertising and paid marketing in favor of online events and organic search.

How COVID-19 has impacted marketing for small business restart programs

According to MarketingCharts.com, the percent of businesses that plan to decrease these marketing investments:

  • 80% – events / experiential marketing
  • 39% – out of home marketing
  • 33% – TV (advertising)
  • 25% – paid social advertising and marketing
  • 23% – online display advertising

Conversely, the percent of businesses who say they plan to increase marketing investments are choosing:

  • 67% – webinars
  • 56% – organic social media
  • 44% – online video
  • 39% – paid social media
  • 34% – SEO / search
  • 34% – online display advertising

10. Well-being and peace of mind

Before COVID-19 stalled and disrupted the economy, American workers and customers largely went to work, shopped and did businesses free from fear of health concerns. With COVID-19 still dramatically affecting the business environment across the nation, and even as it subsides, the “new normal” will not be like it was before.

Small business restart programs must account not only for addressing the physical safety of employees and customers, but also the perceived well-being and peace of mind promoted by the “new normal” of how they plan to do business going forward.

Perceived well-being and peace of mind is a real concern for business owners. Many people have experienced extreme fear and anxiety as a result of the pandemic. You may want to consider whether to offer counseling services to employees as a part of their return to work program.

Employees and customers do not just want to be safe, they want to feel safe at work or while doing business with you. It will be vital for you to effectively communicate what steps you are taking to promote health and safety at your place of business to all of your internal and external stakeholders.

The bottom line for restarting a small business after COVID-19

We all want to get back to the business of doing business! From making changes to physical aspects of the customer and employee experience with your business, you can foster a safer workplace that contributes to the health and well-being of your business, as well as all of its stakeholders.

Maximize Business Cash Flow with these 10 Tips

Maximize Business Cash Flow with these 10 Tips

No matter the type or size of an organization, effectively managing business cash flow is always important, and is often a top concern.  Here are ten tips that can help you run a leaner business and maximize business cash flow, so you can grow your organization.

6 Signs You Need to Expedite Business Cash Flow

Cash flow is important to every business – so much so that one of the most commonly used financial statements for any business is called a cash flow statement. Understanding the flow of money coming into, and going out of your business can bring eye-opening revelations, especially if you are experiencing symptoms that point to inadequate cash flow; such as:

  • Scrambling to fund payroll
  • Inability to take advantage of vendor’s early-pay discounts
  • Failing to meet investor’s expectations or repayment schedules
  • Not reducing long term debt or increasing equity
  • No reserves for emergencies
  • No money to buy new equipment or fund expansion

Earlier we published an article titled Which Came First, the Chicken or the Cash Flow Problem where we talked about the ten most commonly cited reasons new businesses fail, noting both their relationship to cash flow and the warning signs that might point to problems on the horizon. With that in mind, here are ten tips that can help you maximize business cash flow so you can stretch every dollar and put it to work to help you grow your organization.

10 Tips to Help You Maximize Business Cash Flow

1. Raise prices.

If it’s been a while since you set or raised pricing, you may be surprised to find that some of your profit margins have been diminished or disappeared altogether.  Schedule a time each quarter to review pricing and profit margins in relationship to not only current expenses, but long-range plans and the competitive marketplace.

2. Improve upgrade and add-on sales.

You’ve landed a new customer – now what? Before you finalize a contract or sale to a new customer, make sure you aren’t leaving money on the table in the form of upgrades, additional services, expediting or add-on sales that could give you a bigger return on the cost of customer acquisition.

3. Cut costs.

No matter how lean your business operations are, over time there will always be new ways to cut costs and eliminate waste. Along with scheduling a regular review of pricing or profit margins, set aside time on a regular basis to review line item expenses and look for those which are no longer needed.

4. Incentivize innovation.

This is a perfect example of a time when you should spend money to make money. Enlisting staff in coming up with ways to improve your business, cut costs, become more efficient and eliminate waste is a great investment for the long term.

5. Speed up collections.

Yes, you can speed up collections (and expedite cash flow) by putting the pressure on your customers or setting up quick-pay discounts; but you can also get immediate access to unpaid customer invoices by factoring them with a factoring company like Corsa Finance.

The minimal cost of invoice factoring (as low as 5% of an invoice amount for small invoices and less for larger balances) can often be more than offset by the competitive advantage you gain when you can extend longer payment terms to your own customers.  Factoring fees can also be more than offset when expedited cash flow means that you can take advantage of vendor and supplier’s early pay discounts yourself.

We would be happy to help you discover whether factoring would represent an overall cash flow gain for your business – at no cost to you. Use the form below to request a free, no-obligation factoring quote; you could go from approval to your first funding in hours, instantly expediting business cash flow.

Request a no-cost, no-obligation quote:

  • Average monthly sales or amount of invoice to factor

6. Take advantage of industry discounts and offers.

From group buying discounts to industry or networking group offers, there could be many opportunities for you to get more from every dollar you spend.  Sometimes the only investment that you will need to make to take advantage of these offers and discounts is time!

7. Eliminate petty cash.

Once upon a time it was smart for business owners to keep a little – or even a lot – of cash on-site for emergency use or to fund incidentals.  The problem with petty cash is that keeping track of what the money was used for or removing the temptation to dip into it unnecessarily can be difficult.  If maximizing cash flow is your goal, make sure that you can account for every dollar that is leaving your business.

8. Negotiate.

Some people have a natural talent for negotiating. For the rest of us, it must become a learned skill. Failing to negotiate (or at least find out whether there is room to negotiate) with vendors, investors, customers, lenders, landlords and other entities that impact your business cash flow – in-coming or out-going – will nearly always mean that you spent money unnecessarily or did not receive as much money as you could have earned.

9. Audit.

It’s easy to set it and forget it when it comes to vendors and suppliers. Make sure you have a time established, especially before auto-renewals or in the case of perpetual agreements where you will review terms, renegotiate, and compare other options.

10. Flex your muscles!

Cash flow represents buying power and leverage.  Make sure you ask vendors and suppliers for early-pay discounts and take advantage of all that exist. Remember that factoring invoices can speed up cash flow, which could give you the ability to negotiate lower prices and reduce your expenses. These discounts may not show up on your cash flow statement or any other financial statements, but that doesn’t mean they won’t add up quickly.

12 Ways to Protect Yourself and Your Business from Internet Scams

12 Ways to Protect Yourself and Your Business from Internet Scams

Even before personal tech devices – and internet scams – became commonplace, scammers existed. They used the postal service and wall-mounted telephones to scam people out of money and identities. Sometimes they succeeded.

Internet Scams, Spam and Phishing – Oh My!

As technology advanced, along came the internet scams. Now they use email, SMS (text) messaging and mobile phones to try to get access to identities, bank accounts or to persuade their victims to send money.

If you have a mobile device, if you get email, if you purchase things online, or even if you just do business with companies that store information in the cloud, you are unfortunately at risk in some way.

Think about all of the stories you have seen recently about a large retailer or financial institution whose customer data was breached. Even social media use can put you at risk, as scammers often impersonate accounts by creating a “mirror” account using the images and text of another or posing as someone in order to interact with potential targets.

12 Ways to Protect Yourself and Your Business from Internet Scams

There are some basic ways you can protect yourself and your organization from internet fraud, and you can also learn to spot red flags that may indicate someone is trying to scam you. The FBI’s website has many great resources for this, including a list of recent email scams and warnings. They estimate email scams alone cost over $26 Billion in 2019!

  1. Refrain from giving personal or financial information out to incoming sources. Your bank is never going to email you and ask you to verify your account information – they already have it!
  2. Check the sender information. Email scams often come to you as though they are being sent by a friend, retailer, bank, or some other entity you do business with. However, when you look closely at the actual return email address, the address isn’t a match to the organization. The URL/domain names are different.
  3. Verify, verify, verify! One common email and telephone scam is to contact someone pretending to be a colleague or loved one who has an emergent financial need. Before sending money or giving out account information, get in touch with the actual person (colleague or loved one) or someone who knows them well and can verify the need is legitimate.
  4. Ask for a call back number and see if it matches publicly available information for the organization.
  5. Google some of the terminology, sender information, subject line, company name, etc., from the email to see if it matches up to known scams.
  6. If the communication contains some kind of threat, such as a threat to shut down your network, request for ransom for your domain name or if your website gets hacked, or a personal threat, contact local or federal law enforcement, your web hosting provider, your lawyer, etc., to see how to proceed.
  7. Protect your website with a firewall, antivirus, anti-spyware/malware and anti-spam software, and an SSL certificate that encrypts the data submitted to you via the forms on your website. With all of this security comes updates, so be sure to update your software on a regular basis.
  8. Shut it down! Shut down your computer when it’s not in use to prevent attacks from happening and/or stop any attack in process.
  9. Download with care. Many forms of malware are sent via email and if you click on a link or download a file from the internet, you may be unwittingly installing malware or spyware that can make your business vulnerable to attacks, ransomware or a data breach.
  10. Don’t click. You might think you’re closing a malicious popup only to find that the “X” you clicked on to close the box started an action instead. Instead of clicking to close a pop-up window or ad, close the browser window instead.
  11. Clear your devices’ cache, cookies and history. Clear out any unwanted internet activity by clearing your devices cache, which are temporary files stored on a device to make loading re-visited websites more efficient. You can also clear your devices internet browsing history and delete cookies to free up space on your device. This type of device “housekeeping” can make your devices run faster, frees up memory, and helps keep your device safer in the process. If you’re unsure about how to do this, contact your IT department, a local IT (information technology) or computer repair/maintenance specialist, or google information about how to do these types of tasks on device’s operating system.
  1. Institute protocols. Make training about internet fraud part of your employee orientation and on-going training. Institute protocols and rules for use of company devices on the internet (including for email).

What – Exactly – Are Scams, Spam and Phishing?

Here are some of the common terms it’s important to understand, in order to protect yourself and your organization.

Scams – Internet Fraud

The FBI defines internet fraud as “the use of Internet services or software with Internet access to defraud victims or to otherwise take advantage of them. Internet crime schemes steal millions of dollars each year from victims and continue to plague the Internet through various methods.” It describes several types of internet scams including:

  • Business Email Compromise (BEC) wherein legitimate business email accounts are compromised “through social engineering or computer intrusion techniques” in order to conduct an unauthorized transaction of funds
  • Data Breach – Unauthorized access (copying, transmitting, viewing) to business data which might include customer accounts, employee information, bank or financial information, etc.
  • Denial of Service – When a hacker is able to interrupt access to any system or network, such as when a website gets “hi-jacked” or rerouted to another URL, users are unable to login to systems, network access is cut off, etc.
  • Email Account Compromise (EAC) which is similar to BEC but may also extend to the general public, and in which compromised or impersonated email accounts are used to solicit funds from victims
  • Malware – Malicious software, codes, scripts, etc., used to disable or damage computers, networks or other devices
  • Scareware – Similar to malware but includes the use of scare tactics to get victims to click on something, send funds or take some other action
  • Phishing, a.k.a. “Spoofing” refers to use of forged or faked electronic documents. Spoofing is when an email is disguised to appear as though it’s coming from a legitimate source (such as a financial institution or brand) rather than its actual source (also referred to as vishing, smishing or pharming). In both cases, the intent is usually to get the victim to provide personal or sensitive information like passwords, credit card information, bank account numbers or to redirect the victim to a malicious website.

And finally

  • Ransomware – A form of malware and/or phishing or email compromise in which money is demanded in order to restore access to data, a network, or even suggesting the recipient has committed crimes or done something else (e.g., “we caught you doing ___________ and we’re going to release this information if you don’t pay!”)

Internet fraud schemes frequently occur as investment schemes, the infamous Nigerian prince letter fraud, non-delivery of merchandise, internet auctions, business or credit card fraud.

If you believe you or your business has been the victim of one of these schemes, you should report it to your financial institution, any organization that the scammer was posing as (such as when they pose as your bank, a retail store, a charity, or some other organization), and you can also report internet fraud directly to the FBI to assist in their efforts to discover and prevent these types of costly and malicious crimes. If you haven’t been victimized per se but want to report a tip about internet fraud to the FBI, you can do that as well.

You might also like: Understanding Common Business Financial Statements

Overview of Common Business Financial Statements

Understanding Common Business Financial Statements

Improve your ability to understand and interpret the most common business financial statements needed to run your organization.

Financial Literacy is Essential for Running a Thriving Business

PreferredCFO.com cites several business finance challenges being at the heart of why young businesses failed, with financial literacy coming in on the top of the list:

  • 82% – Didn’t understand cash flow or had poor cash flow management skills
  • 79% – Didn’t have adequate working capital at the outset
  • 78% – Didn’t have an effective or well-developed business plan
  • 77% – Didn’t price products or services properly
  • 73% – Didn’t predict sales or costs accurately
  • 70% – Didn’t know what to do to succeed and failed to seek help from those who did

It’s nearly impossible to overstate the importance of financial literacy. While a business owner can learn along the way, having a strong understanding of the financial needs and performance of their company can help them avoid making some of the costly mistakes that can hurt an organization.

This need only grows over time, from knowing how much money you need to start up, to understanding when it’s time to make changes in your business. Paying close attention to the common business financial statements produced each month, quarter or year can give you invaluable insights into sales trends, vendor costs, payroll and other business expenses so that you can take action before a small problem escalates.

Overview of Common Business Financial Statements

What is a Balance Sheet?

The balance sheet shows an organization’s assets, liabilities and net worth. The organization’s assets must be equal to the sum of its liabilities (debts) plus equity in order to balance.

Assets are items an organization owns that have value; meaning, they can be sold or leveraged to make services or products which can be sold.

Liabilities are debts owed by the business to another organization or individual.

Net worth, or equity, is what an organization would have if all assets were sold and all liabilities satisfied. An organization’s net worth belongs to its owner and/or any and all shareholders.

What is an Income Statement?

The income statement shows how much revenue, or income, an organization earned over a specific time period (often over a quarter or year). And it also shows the costs and expenses attributed to earning that revenue.

The commonly used phrase, “the bottom line…” is derived from the actual bottom line of the income statement because it shows an organization’s net income or net loss after costs and expenses are deducted.

What is a Cash Flow Statement?

While income statements have a bottom line of net earnings or loss for a given period, cash flow statements show the movement of cash in and out of an organization.

Understanding the flow of cash going in and out of your business is important because you need to know whether you have enough money coming in to cover operating and capital expenses. It can also help show you where your cash is coming from (or whether activities, such as operating activities) are not generating enough cash to cover operating expenses.

So what if you do have slow cash flow? Apart from growing your business or increasing sales, another way to speed up cash flow is to factor customer invoices instead of chasing down payments. Some companies do this on an on-going basis until they have grown to the point that incoming revenue from sales more than cover business expenses. Other companies choose to factor invoices only occasionally or to spot-factor invoices in order to free up working capital to meet payroll, invest in emerging growth opportunities, pay vendors more quickly for fast-pay discounts, and so on.

The more you understand your organization’s cash flow, the better you can leverage financial tools that expedite working capital. This can help you run your business more effectively and efficiently, or put you in a position to grow your company faster.

Why Understanding Common Business Financial Statements is Important

In business, chances are that sooner or later you will need to be able to read and interpret common financial statements in order to make good business decisions for your organization and avoid costly mistakes.

A better understanding of the financial position of your business can help you determine whether, and how, business financing options like invoice factoring could provide you with expedited working capital or a more consistent flow of cash so that you can focus on growing your business to the next level.

7 Things to Do Before Launching a New Product or Service

Launching a New Product or Service? Do These 7 Things First

When you’re launching a new product or service, answer these seven questions to ensure it gets the customer attention it deserves and produces the new sales you desire.

Don’t Fly by the Seat of Your Pants! – 7 Point Checklist for Launching a New Product or Service

All too often a stellar product or service launch falls flat simply because the groundwork for product launch success was not done. In fact, data suggests that 64% of small businesses (or even more) don’t even have a documented marketing plan.

What you do before launching a new product or service option could be just as important as the product or service itself. Position your new product or service for faster client adoption using this seven-point new product launch checklist.

7 Things to Do Before Launching a New Product or Service

1. Identify “who” will want it.

If you’re launching a new product, chances are it fits one or more segments of your existing customer base (and target markets) better than others. Or you may be planning to add products or services that will attract new target markets, outside of those your business normally serves. In either case, successfully launching a new product or service requires that you identify “who” will want it.

Based on purchasing history, identify pioneers and early adopters among your customer base, or use your marketing to target pioneers and early adopters among members of your target audiences.

2. Specify “why” members of your target audience should want it.

Value propositions and competitive differentiators aren’t just for brands. You should be able to accurately describe – in detail – why members of your target markets would want any new product or service you plan to launch.

3. Court influencers and put them to work when launching a new product.

Based on purchasing history, identify pioneers and early adopters among your customer base, or use your marketing to target pioneers and early adopters among members of your target audiences.

  • Invite them to pre-launch events
  • Employ their feedback for product or service refinement before the launch
  • Use their comments as testimonials and social proof
  • Invite influencers to sample new products or services and share their experiences on social networks
  • Share recommendations from celebrities and experts on your social networks and marketing communications

4. Create anticipation and demand before launching a new product.

Initiating communications about a new product or service beginning weeks – or even months – prior to its launch gives you the ability to create anticipation among your customers and prospects. Additionally, by creating demand prior to a product or service launch you will have a better idea of the level of product inventory (or service supplies) you will want to have on hand for the launch period.

5. Extend a no-risk trial proposition.

Money-back guarantees, free add-ons and other incentives can help to allay any concerns that your customers or prospects may have about trying a new product or service.

6. Make it an offer too good to refuse.

Reward those who are willing to pioneer adoption of your new product or service by extending a special trial period offer, free gift with purchase, financing options (for big-ticket items), or another inducement that makes it easier for customers and prospects to say “yes” than it is to say “no thanks” when it comes to trying your new product or service.

7. Create urgency.

Special offers and incentives should be time-limited, so that your customers are encouraged to try new products or services before they disappear. Likewise, if sales are less than anticipated or less than needed to keep a newly-launched product or service in your line up, encourage customers to purchase and to recommend it to their friends, co-workers or loved ones in order to step up demand.

You might also like: How-To and Marketing Tips for Vendors Selling on Zulily

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

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
5 Small Business Superpowers Big Rivals Can’t Touch

5 Small Business Superpowers Big Rivals Can’t Touch

It’s not always about growing to the next level. Some of the small business superpowers your not-so-big business has are things larger competitors lack, which might mean staying small is better for your organization.

Mergers, Acquisitions and Partnerships – Oh My! 5 Benefits of Keeping Your Small Business Small

If it seems like a lot of companies got bigger by joining forces in the past couple of years, it’s because they did. Deloitte’s Merger and Acquisitions Trends report for 2019 found that 79 percent of responders anticipated they would close more deals over the next 12 months, up from 70 percent in 2018. In addition, more than 80 percent planned to sell off assets in 2019, up from 70 percent the year before.

It can be difficult to watch social media feeds and newswires light up with stories of larger competitors making acquisitions, merging with other companies and forming partnerships for lead acquisition, especially when you know that there are things your small business does better.

Rather than worrying about competing on scale, it might be smarter to leverage those things a small business can do that larger rivals cannot, to make your business more profitable without actually getting bigger. Since you might not know how to leverage these small business superpowers to outpace bigger rivals, we also included a few tips to help you turn advantages like these into growth.

5 Small Business Superpowers Big Rivals Can’t Touch

1. Access

Unless they go on a reality show like Undercover Boss, most CEOs and executives in large organizations have little contact with real customers on a day in, day out basis. They don’t have a chance to engage in two-way dialogue, collect first-hand feedback about the customer experience or find out what customers wish the brand would do next.

Take every opportunity to listen when customers complain, ask questions, or make suggestions. The insights they provide can tell you exactly what you need to do to make your business better, more profitable and guide your choices when it comes to adding to new products and services.

2. Accountability

In a big organization responsibility for mistakes can be passed along until a furor dies down, and accolades for success don’t always trickle down to the employees who really made the difference. For better and for worse, a small business offers their customers accountability and gives every employee a chance to shine.

Leaders who aren’t afraid of taking responsibility for mistakes, missteps and misfires often earn the respect not only from customers, but employees as well. Take responsibility for the mistake and make the solution happen. Worry about tracking the details back later to ensure product or service performance in the future. Be generous with praise. Make sure that everyone on the team has a chance to shine and understands that the success of the one can only ever happen as a result of the effort of the whole.

3. Agility

Bureaucracy, processes, committees and getting the-powers-that-be to change direction or add new projects mean that big companies will almost always take longer to react to marketplace changes and emerging opportunities than a small business. A small business can react and make course corrections quickly. They can communicate almost immediately with all staff who need to make adjustments. They can move resources and redirect efforts in a short period of time when new opportunities emerge. These small business superpowers enable smaller companies to move faster than big ones.

Agility isn’t a verb; rather, it’s a passive state of energy. A small business that prides itself on agility but never takes action is wasting this small business superpower. Make sure that you have a process for discovering and evaluating suggestions, ideas and marketplace changes so that when opportunity strikes, you can strike right back.

4. Simplicity

As companies get bigger and bigger, it’s not just their offices that start to look like a maze. Trying to figure out who to contact with a question or when a new product or service will hit the floor can be a job in and of itself. A small business can keep things simple. From processes to communication channels and corporate announcements, customers and employees can feel confident that they are in the know about where to go and what’s coming next.

The routes might be clear, but they still need to be mapped. Make sure that you establish methodology for tracking and reporting stats and progress to the team on a regular basis — and then do it — so that everyone knows what they need to do next.

5. Consistency

Big companies are often stretched in many different directions, so much so that departments could even end up working to cross purposes or unknowingly undermine one another with prospects and customers. A small business has the luxury of finding and focusing on a few or even one common purpose. Employees not only understand the mission but can work together to achieve the goals with a minimum of disruption, since communication is practically instantaneous, everyone can be apprised of the status of all the projects underway at any given time.

The more consistent a brand experience is, the stronger the impression can be; but remember that a consistently boring experience might be just as bad as a negative one. Decide what type of customer experience your brand should deliver and what you will do to get it done. Ensure that all staff have a clear understanding of how what they do impacts and have the ability to improve the customer experience.

Regardless of size, your company has small business superpowers big competitors can’t replicate. The question is, have you discovered them, and how will you use them for good?

***

We offer small business invoice factoring, a financing tool you can use to expedite cash flow and even create competitive advantages.

Ask us for a free, no-risk, no-obligation small business financing proposal. Get immediate answers and get access to working capital within days of approval – or even faster.

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Top 10 Reasons B2B Startups Might Fail

Top 10 Reasons B2B Startups Might Fail

There is as much to be learned from failures as there is from success. Find out the most common reasons why B2B startups might fail during the first five years.

10 Areas Where Incompetence and Inexperience Can Cause B2B Startups to Fail

From cash flow to customer terms, unless you’ve run a business before, what you don’t know might hurt your new business. Find out how to protect and strengthen your startup or young business by shoring up knowledge and expertise in these ten areas that account for 75 percent of all young business startup failures.

Unless you have launched a startup or small business of your own, it is hard to describe the feeling of excitement and limitless opportunities that startup owners experience when they first open their doors (whether brick and mortar or virtual.) Equally difficult to describe is the vast disappointment that same small business owner will experience if they are forced to close those doors permanently within a few years (or even months) because their young business is no longer viable.

As alarming as it sounds to say that half of all startups are no longer in business by the five-year mark, it’s not like the five-year mark is magic. In fact, more than seven out of every ten startups will fail within the first ten years. (statisticbrain.com)

The industries with the highest failure rates by year four (when 50 percent of all new young business startups are said to have failed) include:

  • Information – only 37% still in business after 4 years
  • Transportation / Communication / Utilities – only 45% are still in business after 4 years
  • Retail – only 47% are still in business after 4 years
  • Construction – only 47% are still in business after 4 years
  • Manufacturing – only 49% are still in business after 4 years

On the flip side, the industries which have the higher success rates by year four are listed as follows:

  • 58% of Finance / Insurance / Real Estate organizations are still operating after year 4
  • 56% of Education / Health organizations are still operating after year 4
  • 56% of Agriculture organizations are still operating after year 4
  • 55% of Services organizations are still operating after year 4
  • 54% of Wholesale organizations are still operating after year 4

From Startup to Young Business to Out of Business, Top 10 Reasons B2B Startups Might Fail

Statisticbrain.com listed the top ten reasons that a young business might fail under two main categories: incompetence and inexperience. One could make the argument that incompetence occurs largely due to inexperience or lack of knowledge needed to put the right policies into place; but for now let’s stick with their categories and talk a little bit about the most common reasons that startups tend to fail within the first five years.

Top 10 Reasons Startups Fail

Incompetence accounts for 46 percent of small business failures within the first ten years of operation. The specific areas of incompetence that derailed these startups included:

  • emotional pricing
  • living too large
  • not paying taxes
  • no understanding of pricing
  • lack of planning
  • no understanding of financing
  • no experience in record-keeping

As you read through the list, it’s easy to conclude that many of these small business failures could have been prevented if the entrepreneurs had educated themselves in the areas of finance, taxes, record keeping and pricing. What’s more, the problems that result in all seven of these areas directly affect cash flow, which is the lifeblood of any business, of any size.

Inexperience accounts for 30 percent of small business failures occurring within the first ten years of operation. The three specific areas where lack of knowledge and experience resulted in startup failure were:

  • poor credit granting practices (lack of experience in setting the right customer terms)
  • expanding too fast
  • inadequate borrowing

Even more than the previous reasons cited for startup failure within the first decade, these three reasons point back to an inadequate understanding of cash flow management, which, in turn, is just about certain to result in inadequate cash flow needed to sustain a small business.

Cash flow is simply the movement of money into and out of your business. Positive cash flow results when revenues exceed expenses; conversely, negative cash flow occurs when money is going out of a business more rapidly than revenue is coming in. Inc.com lists five ways to improve cash flow (collecting receivables, tightening credit requirements, increasing sales, discounting for early payment and obtaining financing).

However, it’s not always possible to implement some of these suggestions. For instance, if extended customer credit terms are being employed as a competitive advantage, it may not be possible – or even advisable – to demand that customers pay up more quickly.

How to Speed Up B2B Business Cash Flow

Any of the reasons cited for the demise of 76 percent of the small businesses that failed in their first ten years could have been experienced by any type of B2B (business to business) organization. Though some could have been prevented by entrepreneurs educating themselves or working with experts in the areas of planning, financing, record keeping, taxes, etc., some of the problems are more complex.

For instance, a small business might want to require customer payment up front or on delivery but may need to extend more favorable terms to their customers in order to compete with larger, well-funded competitors. Likewise, some small business owners may have a good handle on financing and record-keeping, but that does not ensure cash flow from customer sales will always match up in a timely manner with operating costs, expenses and payables.

That’s where invoice factoring can help. Invoice factoring is a financing tool most B2B organizations who invoice their customers for payment after delivery of goods or performing of services can use to better manage cash flow. Rather than waiting for their customers to pay, they can factor – or sell – a customer’s invoice to an invoice factoring company like Corsa Finance and get payment for the invoice within days – or even hours.

Factoring invoices allows an organization to gain immediate access to the working capital that might otherwise be locked down in their receivable invoices for weeks (or longer). With immediate payment on invoices, cash flow can be maintained at a more consistent level, and revenue can be matched up more closely with correlating operating expenses.

Speed Up Cash Flow by Factoring Invoices Instead of Chasing Customer Payments

Get a free, no-risk quote for invoice factoring:

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5 Ways to Make Your Business More Profitable by Factoring Invoices

5 Ways to Make Your Business More Profitable by Factoring Invoices

Few businesses can say they don’t want improved cash flow. From budget deficits to delinquent accounts, here are five signs your business might be more profitable by factoring invoices instead of waiting on customer payments.

Getting paid more quickly can help entrepreneurs, startups and small businesses in a big way by improving cash flow and supplying the cash-on-hand needed to grow.

Small businesses often dream of landing a big account but find that large corporations hold all the cards when it comes to setting terms, including pricing, profit margins and timing of invoice payment. Slow-paying customers make for fast cash flow drains that can hurt a small business, erode profits and even threaten viability.

The good news is that there is more than one way to improve cash flow. Factoring invoices can put the power back in your hands and give your organization the money it needs to become more profitable and grow more quickly over the short or the long term.

5 Signs a Business Should Consider Factoring Invoices to Become More Profitable

  1. Discouraged by Delayed Payments

By the time you make a sale, the math is already upside down. When you consider that you have incurred costs for marketing and advertising, manufacturing, shipping, supplies, transportation, payroll and all of the other costs of doing business, it’s easy to see why it would be discouraging to wait for customers to pay on time, let alone waiting on customer payments that are past due.

Analyzing 409 companies from Standard & Poor’s 500-stock index puts the average time to pay suppliers at 46.5 days, but also notes that small businesses wait even longer to get paid, two months on average. Delayed payments mean delayed reimbursements for the costs you’ve incurred as well as delayed reinvestment in order to grow your business.

When you factor invoices, you collect payment immediately. This empowers you to maintain more consistent cash flow and ensures that you will have money on hand to meet expenses.

  1. Dealing with Budget Deficits

When you are waiting for customers to pay, cash flow challenges can compound. If you make late payments, you may incur penalties that further erode your company’s profits. When you factor invoices, you gain immediate access to the money customers owe you. As a result, you can pay your creditors more quickly. Knowing that you will have the cash needed to pay can even give you leverage with suppliers that will enable you to save money by negotiating more favorable terms with vendors or allow you to take advantage of volume discounts. When you cut your costs and save money, you improve your profit margins!

  1. Desire to Limit Risk of Defaulting Customers

Slow-paying customer accounts are bad enough; but what happens when your customer can’t pay at all? Dealing with bad debt is one of the costs of doing business that can cut into your profit margins in a big, bad way.

Bad debt is a big problem. In 2010, US businesses placed $150 billion with collection agencies, who were only able to collect about $40 billion of that total (www.debtcollectionanswers.com). The SBA (Small Business Association) reports that only about 1/3 of all new businesses will still be around after 10 years. If a customer has filed for protection or gone out of business, even costly recovery efforts may prove fruitless.

Factoring invoices with a non-recourse factoring company is one way to protect your company – and your profit margins – from the negative impacts of bad debt. Non-recourse factors assume the credit risk for factored invoices, which can reduce or even eliminate your organization’s risk from bad debt.

  1. Looking for Competitive Advantages

Being able to improve profits and better manage cash flow can lead to additional perks that can help your business become even more profitable. Factoring invoices gives you access to the money locked down in customer receivables right away – without waiting for customers to pay. Since waiting on customer payments is no longer a problem, you can create a competitive advantage for your organization by extending more favorable terms to your customers.

  1. Pursuing Bigger Opportunities

Since factoring invoices allows you to reinvest in your business more quickly, you can also grow more quickly. Whether you want to take on more work simultaneously, pursue bigger projects or land bigger fish, factoring gives you the ability to put more capital to work to promote and market your business, to expand, or to pay for supplies and the up-front costs needed to serve larger accounts or take on more jobs at the same time.

Request a free, no-obligation quote and expedite cash flow by factoring invoices instead of waiting on customer payments. Contact us at 855-882-6772, speed up the process by applying online or email us using the short form below.

  • Average monthly sales or amount of invoice to factor