Companies with fewer than 50 workers added a net of 1,000 jobs in April of 2010according to payroll processor ADP. But the upswing actually began in March when there was a gain of 4,000 positions, which marked the first month in almost two years that small businesses got to expand payrolls. Even so, there is still a big job shortfall. Small businesses have lost three million workers since the recession began, and there are many small to medium-sized businesses that are still facing challenging times.
If you are a business owner and are having problems meeting payroll or paying your bills, have you ever thought about invoice factoring for your business? Factoring is not a loan – it is the purchase of financial assets from factoring companies, and it differs from traditional bank loans in that bank loans involve two parties, while factoring involves three parties. Banks base their decisions on a company’s credit worthiness, whereas factoring is based on the value of the receivables. With invoice factoring, there is no lengthy application process, no minimums or maximums, and no long-term commitments. Basically factoring can help get you and your businesses back on your feet.
A factoring company is primarily interested in three main things: 1) Is your business properly licensed and registered? 2) Are your products and or services good quality and consistent? 3) Are your invoices accurate, creditworthy and verifiable?
One way businesses are can feel even more secure is to begin a solid invoice factoring program. If you are a business owner, you can choose a reliable factoring company like the Interface Financial Group (IFG), choose one or more invoices that are due in 30 to 90 days, and factor all of them, or simply choose just one for single invoice to factor.
You should know that a factoring company wants to also be in a first lien position on all receivables. Although factoring companies each operate with some differences including different benefits and costs, there are many reputable factors, and some charge more than others. It is also a good idea to check and see how much experience the factor or factoring company you choose has.
There are several things you need to consider, for example, ask if there are any fees being charged besides the discount fee (the cost for the time the money is out) -- such as set-up fee, an application fee, a loan origination fee, administrative fee, or a monthly or annual maintenance fee. Also check and see if there are any penalty fees.
You should also ask if the invoice factoring companies provide reports on account activities, or if they offer credit services on your existing or new customers; then find out if they charge for these factoring services. Now there are many businesses are now successfully using factoring so just make sure that the factoring company is sound and secure. And chances are once you begin to use factoring in your business, you will find it such a useful tool that you will continue using factoring for years to come.
This article was added on Wednesday 11 August, 2010.
