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Recession is one area of disaster where every industry, be it big or small, flays fears all around. There is talk of fear everywhere, about the impending credit crunch that would affect one and all. In such tough times, your business and families too would be affected. There may be sales, though at a slower rate, with strict terms and slow paying customers. In such a situation, when your finance needs are greater, invoice factoring can be of great help and the factoring services are expected to stand solid in the face of recession.

Your business may not be completely hit to go down low due to recession, but the situation could be tough. The sales may reduce to a certain extent. Moreover, the customers may not pay you immediately, depending on the terms of payments. You may even receive payments after a period of 60 to 90 days. In such situations your cash flow is severely affected. This is a situation that hampers the growth of your business, more so if yours is a small or startup company. It can equally be tough for the bigger ones too. The stability of the company is surely affected.

Factoring can help all sorts of businesses face these tough situations. If you have invoices raised on your customers, then you have an asset in hand that can be of great help. But, if you have an invoice for which the payment would be received after a long time, then you may sell the invoice to the factoring companies, who will pay you immediate cash within a short time. It is a matter of credit worthiness of your customer (and not yours) that matters for these factoring companies. If you have a credit worthy customer, you can get a higher percentage of cash on the sale of these invoices. The factoring company may pay you even up to 85% to 90% of the invoice value.

The balance amount is paid when they collect the entire invoice amount from your customer. They would only deduct some percentage of factoring fees from that amount. In the initial stage, when you approach the factoring company, the factoring process may take 2 weeks. When the relationship is established between you and the factoring company, you may even submit your invoices online and get cash wired into your account within 48 hours. Such easy availability of cash is not possible, if you had to opt for a loan from a bank. Moreover, for small businesses, bank loans may not be easily available.

Factoring companies rely entirely on the sales that you do. If you have constant sales, you will have invoices for factoring. And if you have invoices, you can get cash to take care of your expenses. Your working capital would be taken care of. You can even benefit from your timely payment for your purchases of raw material etc, as this helps you to get the benefits of trade discounts. Factoring is beneficial for small and medium sized companies, as well as for bigger organization. Though it may affect the margins to a certain extent, the finance needs are satisfied at the right time. Trucking companies, staffing services, health care providers etc can benefit from such factoring.

For small and medium businesses, factoring is a boon in the face of recession, especially where startups are slow and the cash flow situation is critical. It is important to find out the available options for finances and use the facilities, so that the business keeps running even during the recession period.

Resources: Freight Bill Factoring with the best rates and service. Current factoring rates can be found here: http://www.phoenixcapitalgroup.com

The ill effects of recession and a credit crunch is felt by businesses big and small. No one is spared during these difficult times and therefore it is very important for you to take a few steps to sustain your business through these hard times. One of many ways to keep your ship sailing is to avail of factoring services. Factoring can help you manage your funds better. Your working capital needs can be taken care of by wisely distributing you invoices to be factored over a period of time as and when the need for funds arises.

Factoring involves selling one of your asset i.e. accounts receivables to the factoring companies. These companies will buy your invoices and give you an advance payment of 85% to 90% of the invoice value. Once they receive the payments from your customer you will be paid the remaining amount. A factoring fee is deducted from the amount. The initial amount is wired to you in 48 hours. The initial paper work to build a relationship with the factoring company may take approximately 2 weeks. After that, assuming your invoices are from good customers, you can easily obtain your funds in no time.

Once you start factoring, you should carefully determine when the funds would be required. You ought to schedule what invoices to sell and when. Rather than selling off all at once, planning their sale as per your need will ensure that you have something in hand to stand you in good stead in an emergency. For this you should keep a tab on your cash balances regularly. Preferably maintain a sufficient balance to last for at least 3 months in case of any further financial ups and downs. With factoring, your funds can be made available in a short span, so keeping some invoices for future needs is a good option.

Your collections for those invoices that may not have been factored should be pursued actively. By doing so you can ensure that you receive payments on time. You need to follow-up with customers wherever necessary. Similarly, by using the factoring services you can even obtain enough funds to pay your creditors. This can get you some good discounts for prompt payments. Any amount of money saved from these can also be of great help. You should also manage your creditors sensibly, ensuring your profitability in the entire process of factoring and payment to creditors.

Do not rely on the banks entirely for the funds. They may not be able to provide you with funds in a short span of time, when you need them urgently. You may be able to take the opportunity of bagging a bigger contract if you choose to factor your invoices. Similarly, your accounts receivables are reduced from your balance sheet and there is a lesser amount of bad debts. This indicates a better financial position and new companies may be interested in dealing with you because of your sound condition.

With factoring you have a very good facility in hand which you should carefully and wisely use to survive the recession.

Resources: Freight Bill Factoring with the best rates and service. Current factoring rates can be found here: http://www.phoenixcapitalgroup.com

Managing your cash flow is extremely important during normal times, but if you are in the midst of a recession, then this aspect assumes gigantic proportions. The very survival of your business depends on your cash flow during lean periods. Here are some vital tips on how to manage your cash flow during a recession with invoice factoring.

If your ledger contains a lot of credit customers, then it is natural that you would need to wait, until the due date for your payments to arrive. However, during a recession, it just might not be possible to wait for those payments, especially if some of them get delayed. A lack of ready cash would also not allow you to expand your business, since all your energy would normally be spent in just trying to survive. Instead of being dictated by your clients who could be facing the heat from the trends of recession themselves, you could opt for invoice factoring to ensure ready cash even while issuing credit invoices to your clients.

Invoice factoring is a process wherein a factoring company “buys” your credit invoice from you and provides the amount of that invoice minus a factoring fee within a day or two. This fee could range from 1.5% to 5% depending on various factors, such as the credit limit extended by you to your client, your client’s credibility in the factoring company’s eyes, and the amount of business that you can provide for your factoring company.

In factoring, there are two methods that you can follow, one being ‘non-recourse factoring’, where the factoring company will assume the risk of any non-payment by your client even after the due date, and ‘recourse factoring’, where the factoring company can demand the invoice amount back from you, if your client fails to pay the money after the due date. The fees for ‘non-recourse factoring’ will be higher due to the additional risks involved. Either way, you will certainly receive your invoice amount within a couple of days of raising your credit invoice.

Thus, even during a recession you will still be able to maintain a positive and healthy cash flow by getting your invoice amount immediately, instead of waiting for 30 to 90 days based on your credit terms and industry. This will enable you to pay your suppliers, vendors, and even your employees on time. It will also enable you to go in for any bulk purchases to gain additional discounts on your purchases. You will also be able to embark on an expansion spree that could help you to further lower your costs.

All these factors will not only help you to survive and thrive in the times of recession, but will ensure that you come out of this phase with all your guns blazing and shoot ahead of your competition, when the recession is over. If the factoring company takes over the task of collecting your receivables, then you will also be able to concentrate on increasing your sales, rather than rushing after delayed payments.

Thus, instead of dreading the phases of recession that afflict the economy from time to time, you can get in touch with the right invoice factoring company that can ensure a smooth cash flow to carry you through rough weather. You will be able to weather out the recession without sacrificing your growth and will be ready to surge ahead, once the economy improves.

Resources: Freight Bill Factoring with the best rates and service. Current factoring rates can be found here: http://www.phoenixcapitalgroup.com

Recession and a credit crunch have hit every market and many businesses are facing a tough time dealing with the situation. It is important for businesses big or small to draw up a plan to overcome these times. One very useful tool to recession proof your business is by factoring invoices that you have in hand. You are sure to feel the pinch with payments trickling in and increasing costs. In these circumstances, factoring should be top of your agenda.

During a credit crunch your cash flow needs to be managed extremely carefully. Monitor it regularly with a substantial amount set aside for at least 3 months. You may have big customers but your payment terms flexible. To add to that your customer may pay up later than the stipulated period. Your need for capital does not diminish. There would be certain payments that you cannot forgo or postpone. You require funds to take care of rent, taxes, bills and overheads. Factoring can be of great use to you if you have an important asset in your hand. That asset is the invoice receivables that you have in hand. You can sell them off to the factoring companies for a small fee. Depending upon your cash requirements you can choose to sell your invoices to the factoring companies. Factoring companies may pay you an advance of even 85% to 90% depending upon certain factors.

It is important for you to have a steady flow of working capital and therefore necessary to beef up collections. However, in tough times that will be limited. By factoring your invoices you get the cash you urgently require. This is useful to make prompt payments, which can help get you better trade discounts. You should keep a check on your creditors and stretch them sensibly without hampering your cash flow or loosing out on good discounts unnecessarily.

You cannot depend on you bank for your funds and more so if yours is a small business. It takes a lot of time to get loans and can be expensive. Similarly, banks may or may not give you loans if your credit scores are low. In such instances, if you have a big invoice from some credit worthy customer you can get funds from a factoring company with ease. For them your credit scores are not as important as those of your customers. You can get funds in a matter of 48 hours once you have established a good relationship with the company. Another advantage is that you can also bring some discipline to your financial matters. You can plan on what invoices to use and when as per the need. You need not sell out all in one go and then have nothing left in hand. You can ensure that your finances are well managed and planned well in advance.

With the enumerable advantages that factoring has to offer, keep it on top of your list to counter the recession. Planning in time will help you tide through these tough times.

Resources: Freight Bill Factoring with the best rates and service. Current factoring rates can be found here: http://www.phoenixcapitalgroup.com

Recession seems to be inevitable with the current turmoil seen in the world financial markets. It appears that the business fraternity would find it hard to run their businesses. Hence, it is necessary to take precautions to recession proof your business. Invoice factoring can be one tool that can help your business wade through the turmoil in the market. A steady cash flow that is monitored on a regular basis and substantial amount of working capital is critical to keep the businesses running. You may have to find finance options and use them wisely and avoid approaching banks for loans to keep your business moving.

Invoice factoring is considered beneficial to recession proof your business, even when bank loans are available to fund your business. But, the banks would take time to approve the loans. For small startup businesses with low credit scores, bank loans may not be easily available and banks would be reluctant to offer loans, since they do not have assets with them. In such situations, invoice factoring comes to your rescue.

The major benefit of Invoice factoring is the instant availability of working capital. Since your customers pay you late, and you have to do your payments like taxes, rents, bills etc on a timely basis, such cash requirement can be rescued by factoring the credit invoices. Moreover with immediate payments, you may even get the benefits of trade discounts. Taking into account all these factors, like payments of bills, taxes etc. for the month; you can then plan factoring of your invoices accordingly.

Rather than factoring all your invoices at once, you could select invoices to factor and cater to your immediate needs. This way, your cash flow is regulated. Similarly, if the need arises for urgent cash to undertake new projects, these invoices can be factored and you can receive funds within 48 hours. This way you do not lose any opportunity to grow. With improved sales, you would have more invoices.

Another advantage of factoring is that your receivables are reduced from your financial statement and there would be lesser bad debts. If you choose non-recourse factoring, the factoring company takes the risk and responsibility for non-payment by the customers. Your cash and fund flow statement also would show that you are in a better financial situation. This also helps to improve your credit scores. This way you would build up your company’s finances. With some assistance from the factoring companies, you can bring in a lot of discipline in your finances. With proper selection of credit worthy customers, your risk of losses is substantially reduced. Another advantage is that the factoring companies undertake the responsibilities of collection of payments from the customers, which reduces your burden of collections that would have otherwise raised your related costs.

During recession, it is important that you are careful to deal with your customers. You make sure that you have good relations with them and take some efforts to ensure that your invoices get paid on time. Check you receivables regularly and plan to recession proof your business. It is important that you are constantly aware of your financial status and make efforts to retain your customers.

Resources: Freight Bill Factoring with the best rates and service. Current factoring rates can be found here: http://www.phoenixcapitalgroup.com

The fear of recession looms large and it is better to be safe than sorry. The credit crunch is affecting the economy and difficult times are predicted ahead. Recessions are not the best things to happen, as you would find number of people losing their jobs, which in turn would affect families and businesses. But, if you take some precautions now, when you really can, then you can survive and face recession. In situations like this, Invoice factoring can be of great help to keep your business running during the recession period. The improvement in the cash flow would do you good to keep your business moving in these tough times.

Invoice factoring is selling invoices that you have raised on your customer. There are factoring companies, who are prepared to buy good factors and pay you up to 80% to 85% of the invoice value. They will collect the invoice amount from your customer and pay you the balance amount after deducting factoring fees.

Benefits of invoice factoring

. Instant cash: The factoring process is a boon to businesses that face situations like slow payments from customers. Though a customer may be an owner of a big business, yet payments may not be received from him immediately on raising the invoice. Sometimes smaller companies are affected by not getting new business due to the lack of instant cash flow. They cannot bid nor have provisions required to start a newer project. In such situations, if the business invoices are sold, instant cash is made available. They may have to agree on different terms to acquire a new business. The complete factoring process may not even require more than 48 hours, if your relationship with the factoring company already exists.

. Working capital: Though the customers may pay you later, any business is required to have a working capital. You require money to take care of some immediate expenses like payments of rent, taxes, salaries etc. In such times, if you sell your invoices to the factoring companies, you can get cash to take care of these expenses. If your sales increase, even though with a lower rate during recession, you can make use of these sales to gain some capital. Your financial needs would thus be taken care of.

. Eliminate bad debts: If you have selected non-recourse factoring, then it eliminates bad debts from your financial statement, as the factoring company takes up the risk of non-payment by customers upon themselves. This helps you not to have many bad debts, which otherwise would reflect badly on your financial status. When you select your customers, you can take the help of these factoring companies and list only those credit worthy customers that matter to these factoring companies.

. Early payment discounts: When you get cash in hand, you can use this to pay all your dues and get an early payment discount. You may also find it useful to make immediate or even down payments on purchase of raw material and gain discounts from these payments, which helps you to reduce your manufacturing costs. Though the margin is reduced due to factoring, such discounts help you to improve your earnings.

By using the factoring company’s services, you can face recession to some extent. With your finances in order and with the help from these factoring companies would ensure that you are careful in your financial matters and thus sustain through the tough times.

Resources: Freight Bill Factoring with the best rates and service. Current factoring rates can be found here: http://www.phoenixcapitalgroup.com