Did your cash flow problems create your business problems?

Cash Flow Problems or Business Challenges – Which Came First?

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Whether or not you deploy invoice factoring or other financing tools to resolve cash flow problems, drill down to the root of the problem to prevent it from impacting your growth again in the future.

Cause or Effect? Exploring the Relationship of Common Business Challenges and Cash Flow Problems

“Access to capital” is commonly cited among the top cash flow problems for small business owners and startups. But often, slow cash flow is a symptom, not the cause.

Earlier, we published an article listing the top ten reasons B2B startups fail – or fail to thrive – during their early years. While “access to working capital” was not explicitly listed among the reasons, many of the reasons that these small businesses failed tie back to cash flow problems in some way. So much so that someone on LinkedIn asked why “access to capital” was not on the list:

“Good info to share. I have read several articles that say the #2 reason for failure is the lack of revenue / cash flow / financing.”

Is inadequate cash flow the cause or just the symptom when things are going sideways in a B2B startup or young business? This is a classic “which came first, the chicken, or the egg?” type of question. It’s easy to point to lack of working capital or slow cash flow as the problem, when actually, cash flow problems are the result of another issue whose roots lie elsewhere.

Here’s another look at the list we shared, along with an analysis of what symptoms might be present within a business experiencing the same type of challenge. We also share some steps you can take to address the challenges.

More than Cash Flow Problems: Warning Signs of the Top 10 Challenges that Derail Startups and Small Businesses

Emotional Pricing and Not Understanding Your Pricing (#1 and #4 on the list)

When goods or services aren’t priced high enough to produce the margins needed for a business to be profitable. Conversely, products priced too high  can result in inadequate sales volumes and revenues required to meet operational needs. Both cases result in low cash flow and an unsustainable business model.

You may be able to fix your pricing strategy by conducting some competitive research or establishing a value proposition that resonates with more buyers. Determine whether there is an adequate number of buyers in your target markets to support a particular product or service. If the market is inadequate, it might be necessary to scrap or table the item for the time being, or find a new market for your product.

Living Too Large (#2 on the list)

Many entrepreneurs become small business owners out of a desire to build a better life for themselves. They often want to enjoy the fruits of their labor as quickly as possible. Low cash flow can be symptomatic of the removal of too much operating revenue by an owner or investors. (I knew a store owner whose spouse would come to the store and take money directly out of the till for personal use. It didn’t take long for the business owner to be forced to sell the business at a fire-sale price.)

Proper financial planning and having transparent cash controls can help to ensure that the business retains the revenues it needs for day to day operations and growth initiatives. Best practices suggest you separate personal and business finances, even as a sole proprietor.

Not Paying Taxes and No Experience in Record-Keeping (#3 and #7 on the list)

Most tax preparation professionals can share at least one story about doing taxes for a small business owner who had failed to set aside money for payroll, state, or federal taxes. Not paying taxes at all, or not paying enough in taxes is a sure-fire way to hurt a small business.

Inadequate or sloppy record-keeping often combines with non-payment of taxes. Both issues can be fixed by working with a professional accountant or bookkeeper in order to ensure that the paperwork is done right and taxes are filed and paid on time.

Shoddy record keeping often hides the root causes of low cash flow. And , it’s important to include projected tax expenses as you calculate margins and set prices for your goods or services.

Lack of Planning (#5 on the list)

Want an easy way to negatively impact your numbers?  Lack of planning.  What can happen? You stock too much or too little inventory, resulting in price reductions or missed sales opportunities.  Too many or too many or too few staff members can make payroll numbers balloon. Materials costs skyrocket with rush charges because you didn’t order raw materials soon enough. Missed deadlines mean lost clients and sales. Some small business owners are inherent planners, others are more inclined to be visionaries. Some see the big picture, others the details.

One important thing for any business leader to remember is that it’s rare for any one person to have all the skills needed to do everything well. Solve this challenge by hiring to your inadequacies, finding good mentors and recognizing where you need help. Pull your team together to lean on each other’s strengths.

The bottom line: If planning in many or even just one vital area of your business is not your strong suit, don’t be afraid to ask for help.

No Understanding of Financing and Inadequate Borrowing (#6 and #10 on the list)

Meet with a business finance expert as you launch your organization and as you grow. A specialist can help to ensure that your finances will be correctly set up and understandable. Clarity in this area can help you identify problems as they emerge, before they hurt your business, and while there is still time to act to resolve them.

Additionally, it’s important for small business owners and entrepreneurs to understand that there are financing alternatives available that can help resolve common cash flow challenges. For instance, Corsa Finance partners with business financing professionals who can help small businesses with low or slow cash flow. Options include cash flow loans and invoice factoring that allow companies to “speed up” collection of customer invoices in order to create more consistent cash flow and take on new business more quickly.

Poor Credit Granting Practices (#8 on the list)

As with setting prices, organizations can make the mistake of extending terms that are too generous.  Alternatively, if payment terms are too tight, customers may look for competitors with more lenient payment options.

Good news for companies that invoice their customers after delivering goods or performing services! Invoice factoring can alleviate this challenge altogether. When companies factor invoices, they can receive payment the same day the invoice is generated, without waiting for customers to pay. The factoring company will do the waiting while you’re growing your business.

Expanding Too Fast (#9 on the list)

When organizations try to expand too quickly, they often deplete resources (including working capital) to the point that the business may have trouble meeting operating expenses. This is another instance where simply working with a financial  expert and creating a thoughtful growth plan can prevent the problem from occurring.

***

Get more information about speeding up cash flow:

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.

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.

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

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

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

Key Components of Invoice Factoring Proposals

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

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

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

Invoice Advances, Reserves and Factoring Fees

Advance Rate

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

Reserve Rate

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

Factoring Fee

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

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

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

Introductory Advance Rates and Factoring Fees

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

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

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

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

Add-On and Hidden Fees

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

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

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

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

Factoring Client Obligations

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

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

Invoice Buy-Back Stipulations

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

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

Factoring Minimums

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

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

Contract Termination and Notification Clauses

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

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

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

UCC-1 Filing

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

Benefits to Look For in an Invoice Factoring Agreement

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

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

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

Benefits of Working with the Best Invoice Factoring Companies

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

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

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

8 Ways Invoice Factoring Can Help You Grow Your Business Faster

8 Ways Invoice Factoring Can Help You Grow Your Business Faster

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Is lack of working capital a problem? Grow your business faster with a financing tool that speeds up cash flow.

Business Cash Flow Financing – 8 Benefits of Invoice Factoring

Few things are more frustrating in business than watching opportunities pass you by because of a lack of working capital. In fact, lack of working capital is repeatedly cited as one of the main problems business owners face when trying to grow their business – or even just keep it afloat.

Having your organization’s growth constrained by a lack of working capital can be especially frustrating when you have assets you can’t access, such as outstanding receivables, and you find yourself waiting for customers to pay so you can take on new business. If a lack of working capital is keeping your business from growing or cash flow is a problem, invoice factoring could be an ideal cash flow financing tool for your organization.

8 Ways Invoice Factoring Can Help You Grow Your Business Faster

You can access the working capital locked up in outstanding invoices by factoring invoices instead of chasing customer payments. Having this working capital in hand, instead of on the books, could be the ideal business financing tool to enable you to:

  • Take on new business more quickly
  • Service larger customers
  • Purchase additional equipment, facilities or real estate needed to grow, expand or hire additional employees
  • Repair or replace aging or deficient assets
  • Improve cash flow to maintain a more even, predictable flow of money to meet operational expenses and fund payroll
  • Engage in strategic marketing and business growth initiatives
  • Negotiate discounts from your own suppliers or vendors
  • Extend more favorable terms to your customers to gain an edge over the competition

Our financing tools are especially appropriate for organizations that want to grow but find that cash flow is not keeping pace with operational needs. Low cash flow often creates difficulty in taking on new projects, new customers or larger accounts not because they aren’t profitable – but simply due to lack of working capital. Factoring can be used as a financing tool to unlock working capital that would otherwise be tied up in customer invoices for weeks, or even months.

Use our invoice factoring calculator to estimate the amount of working capital you could unlock by factoring unpaid customer invoices:

Our team has years of experience in factoring for a variety of industries, and now we are putting that experience to work helping our clients get tailored invoice factoring agreements, so they can maximize the benefits of this business financing tool.

We invite you tap our expertise. We will work with you to come up with a flexible plan that is customized to the financial needs of your business and the way you do business. Here are some of the advantages of factoring with Corsa Finance:

  • No long-term contracts or factoring minimums – factor only when you want to, and only those invoices you choose
  • No application, due diligence or credit check fees
  • No notification, funding or reserve release fees
  • Free funding on advances as soon as the same or next business day
  • Competitive advance rates – as high as 90 percent
  • Competitive factoring fees – factoring fees as low as 5 percent for small invoices or lower for larger balances
  • Choose full recourse, white-labeled non-notification factoring, or non-recourse factoring with additional financial protections
  • Flexible options – retain control of your own accounts receivables billing or let us do the work
  • High level of customer service to you and your customers – we want to earn your business and referrals!

When you think about all of the ways you could be growing your business if only you had access to the money locked up in customer invoices, the idea of using a financing tool that can expedite cash flow becomes even more compelling. We invite you to apply for a free, no-obligation invoice factoring proposal (even if you’re already working with another factoring company and just want to compare).

 

7 Intangibles the Best Business Invoice Factoring Companies Provide

7 Intangibles the Best Business Invoice Factoring Companies Provide

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

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

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

7 Intangible Characteristics the Best Business Invoice Factoring Companies Provide

1. Speed

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

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

2. Cost Savings

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

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

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

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

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

3. Trust

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

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

4. Partnership Mentality

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

5. A “Yes” Culture

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

6. Added Value

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

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

7. Flexibility

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

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

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

The 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.

post-it note that states we are recruiting, for recruiting ideas article

3 Innovative Recruiting Ideas for Staffing Agencies

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The recruiting and staffing landscape has never been more competitive. Agencies that want to land the best candidates need to stand out from the rest; these three innovative recruiting ideas for staffing agencies can help.

Innovative Recruiting Ideas for Staffing Agencies Can Set Your Services Apart

You aren’t likely to come across a job posting from a company or a staffing agency that says “ho-hum candidates wanted.” Without an innovative approach, however, your staffing agency runs the risk of looking just like all the rest, and that “rest” is growing quickly. The staffing industry grew by 4 percent in 2018. With the economy at full employment – and more job openings than jobs – the recruiting competition for staffing agencies in 2019 is tougher than ever before.

You might be concerned that your agency will have to spend a lot of money on advertising or gimmicks in order to become more successful at attracting top candidates. However, these innovative recruiting ideas for staffing agencies can help set your services apart, and they don’t have to break the bank to deliver a big return on investment.

3 Low-Cost Innovative Recruiting Ideas for Staffing Agencies and Recruiters

1. The Power of a Voice

Today’s technology makes it easy for everyone to see information all the time, but at the same time makes swiping information and updates away or deleting information from an inbox equally easy and immediate. Within seconds, people decide whether to read an update, comment or click on an image. Sites like LinkedIn make it possible for prospective candidates to find and connect with company and agency recruiters instantly; indeed, it’s not uncommon to see updates about position openings throughout the news feed on LinkedIn and other social platforms.

All of these voices have power, especially when updates come from people a prospective candidate knows personally, or when a “real employee” lends their voice to the recruiting effort by sharing a job post or positive reviews about what it’s like to work for their employer.

When information comes from a reputable voice a candidate will be more likely to click on the content, which then takes them to a company’s job posting or career site. The power of a voice – a real employee’s esteem for the organization they call home, can play a critical role in helping to engage and attract top talent to impact the future of the company.

2. The Impact of Personal Stories

For every job opening there is an employer, title, description and salary. While all of these can get the attention of talented candidates, it’s the culture of the organization, the growth opportunities for an employee, the neighborhoods where they might live or work, and the added perks that make life a little bit sweeter that truly engage.

Many companies recognize this is an advantage to gaining top talent, and so seek to engage candidates using short funny or inspirational videos in order to give prospective hires a peek behind the curtain. Although professional video production can be expensive, the cost to make your own short videos runs the gamut from free (using a cell phone, webcam or owned equipment) on up.

Amazon has released many videos that give candidates insights as what it’s like to be a part of the culture and what they to expect working at Amazon on a daily basis, such as this one titled What is it like to work at Amazon: Go Beyond the Badge with Janna.

This video was published in May of 2015 and since then has garnered more than 18,000 views. Another Amazon example is a video that talks about Seattle, where the company is headquartered, focusing on the e-commerce giant’s relocation package and why Seattle is a great place to live.

3. The Prove It Test

A “prove it test” is any type of test a recruiter might use to determine whether an applicant has the skills needed to succeed in a given role. When you combine the idea of a prove it test with a personal challenge, you create intrigue that can motivate ambitious, talented candidates to take action. Think of this as one of the few times “if you build it, they will come” might actually work.

In one example, when Google was recruiting engineers they put up billboards that simply had a white background with an algorithm listed. Those who responded on their website with the correct equation and then succeeded in additional problem solving online were then redirected to a final recruiting page. Giving proof to the message displayed to those who reached the final recruiting page that “One thing we learned while building Google is that it’s easier to find what you’re looking for if it comes looking for you,”

Google has continued to use unconventional recruiting techniques in order to attract the uniquely talented employees they are looking for. In another instance, the MGM hotel in Vegas put together their own version of the reality show Iron Chef to test the mettle of applicants for a top chef job at one of their best restaurants (MGM and Iron Chef Contest).

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Staffing Agency Factoring and Staffing Payroll Funding Services

We offer staffing agency factoring services and staffing payroll factoring with low fees – as low as 5% – plus free same day funding, with advances as high as 90%. Get a free, no-obligation quote to compare against your current factoring program or find out how our staffing agency factoring or payroll funding could help you grow your agency more quickly.

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!

The Hidden Costs of Invoice Factoring

The Hidden Costs of Invoice Factoring

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

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

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

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

1. Add-On or Administration Fees

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

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

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

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

2. Long Term Contracts

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

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

3. Monthly Minimums or Other Minimum Factoring Requirements

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

4. Introductory Rates, Fees or Other Conditions

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

5. Lost Customers

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

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

6. Recourse Factoring Buy-Back Stipulations

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

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

Eliminate the Hidden Costs of Invoice Factoring

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

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

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