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Most business to business and business to government invoicing involves extending credit for at least thirty days. When there is a downturn in the economy, the interval between the date of an invoice and payment [url=http://www.ktbruce.co.uk/barbourjackets.php]barbour jackets[/url] increases thus putting additional pressure on [url=http://www.jeremyparendt.com/Barbour-Paris.php]barbour pas cher soldes[/url] the company's cash flow. Even though actual terms are net-thirty-days, the average interval for this type of invoices has gone from approximately fifty-four days to fifty-nine days.
When a company is trying to maintain credit, meet payroll on time, continue to grow, make timely periodic payments and pay accounts payable on a thirty-day cycle, an account receivable cycle of almost sixty days makes it impossible to synchronize with the payments due in thirty days.
Unfortunately, there is kind of a double standard inasmuch as some large companies have a reputation of always paying but taking advantage of their clout by paying late. Smaller companies will tolerate late payment because they need the business and know they will always get paid even though the payment will be delinquent. A volume of business from paying companies is far better than any amount of volume from a company that doesn't pay.
Ideally, a business will be able to operate on a line of credit from a bank or conventional loan institution. However, [url=http://www.giuseppezanottipaschere.com]giuseppe zanotti sneakers[/url] some newer companies or companies experiencing growth cannot always qualify for an adequate line of credit to finance growth and meet their periodic payments and obligations. So it becomes necessary to find alternatives to improve their cash flow.
Leasing is a way a business can buy equipment without a lot of capital outlay. There are two types of leasing. At the end of the lease, the equipment can be bought for one dollar. However, in many cases, a company is more concerned with being competitive by having the most up to date equipment and with lower payments by not taking ownership of the equipment upon termination of the lease. There are also tax advantages [url=http://www.mxitcms.com/abercrombie/]abercrombie milano[/url] to leasing rather than buying. It is best to consult with an accountant to determine whether to lease or purchase.
Another way to finance a business is to do invoice financing also known as invoice factoring. The way invoice factoring works is a third party (factor) advances a percentage of the face amount of an invoice followed by the balance (reserve) minus a discount fee. This type of financing allows the company to receive an advance almost immediately after an invoice has been submitted.
Invoice factoring is a transitional way to increase cash flow, build credit, and grow the [url=http://www.tagverts.com/barbour.php]barbour online shop[/url] business. While factoring invoices is usually more expensive than a conventional line of credit, it allows a company to have access to an additional debt-free line of credit that grows automatically during this transitional period of time until the company is able to qualify for less expensive conventional financing.
Yet another way of increasing cash flow is for a company to accept credit cards. There are still a lot of smaller companies that finance purchases from month to month with credit card financing. A business doing credit card business gets [url=http://www.fibmilano.it]woolrich outlet[/url] paid almost immediately after a credit card invoice has been submitted minus a discount fee. The acceptance of credit cards in principle is [url=http://www.thehygienerevolution.com/hollister.php]hollister[/url] similar to factoring. The main difference between accepting credit cards and factoring is payment for credit card invoices involves one installment whereas factoring involves two installments. [url=http://www.ktbruce.co.uk/mulberrysale.php]mulberry sale[/url] Both are charged a discount fee.
It is worth paying a discount fee to be able [url=http://www.ktbruce.co.uk/barbourjackets.php]barbour[/url] to convert negative cash flow into positive cash flow. The main reason businesses fail if from a lack of capital. A company must have enough capital in order to be able to finance growth while making timely periodic payments.
The application process is simple and quick. A factoring company is interested in a company's aging accounts receivable, accounts payable, type of business, a copy of each type of invoice [url=http://www.teatrodeoro.com/hollisterde.php]hollister[/url] and whether the company is viable.A factor is also most interested in the ability of the clients of a company and their client's credit history and ability to pay the invoices. With the submission of those documents and a perhaps a few others, a factoring company can accept and make a proposal to qualifying companies within a couple of days. Initial funding [url=http://www.rtnagel.com/louboutin.php]louboutin pas cher[/url] can occur within about ten business days after necessary paper work has been submitted.
All of the qualifying outstanding invoices can be funded initially. Thereafter, only new invoices can be funded. An advance on new invoices occurs within twenty-four to thirty-six hours after submission of an invoice.
If you have a viable business, are unable [url=http://www.agentparadise.com]woolrich sito ufficiale[/url] to qualify for an adequate line of credit, and are experiencing growth, you would be well advised to find a reputable broker who can match your company with the right factor. It could be an answer to how to get your business through a period of growth and able to make it to the next increment in the growth of your business.

Russell Wardle is president of Corporate Capital Source with specialization in invoice factoring, purchase order factoring and equipment leasing. Contact at 801.676.0579 or [link widoczny dla zalogowanych]. For more information: [link widoczny dla zalogowanych]
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