With banks denying credit for most small businesses, companies are increasingly turning to invoice factoring for operating cash and expansion.

Factoring is increasingly popular: It  is a form of commercial financing that uses a company’s oustanding, discounted invoices as collateral. So, instead of getting paid in 30, 60 or 90 days, the company gets cash in just a few days by offering discounted invoices to a factoring company.

There are no banks, loan applications or credit checks involved. The invoice is borrowed against your creditor, not your company.

It’s a simple process: The factoring company buys the invoice, the company is paid immediately, and the client (creditor) must pay the factoring company back. And you get your cash quick, in as little as 24 to 48 hours.

There are many advantages to a factoring company:

Speed: Unlike in a traditional bank loan, factoring can give you quick access to your cash in as little as 24 to 48 hours. It’s ideal for companies who have lucrative contracts, but can’t afford to wait to pay their employees when the client reimburses them in 30 days or longer. Factoring gives you immediate cash.

Financial: Your credit is not under scrutiny; it’s the credit of the company that’s paying your invoice that the funding decision will be based upon. Your company may be a start-up or financially challenged; it doesn’t matter because your client’s credit is under consideration, not yours.

Credit: As long as the client who invoices you is credit worthy, you can have a healthy factoring relationship. Factor as many invoices as you wish.

No loan repayments: Factor as much and as often as you wish — without worrying about interest rates or payments. When the client pays the loan, your factoring amount is paid off.

Minimal set up: Factoring isn’t difficult. There’s very little paperwork involved, with no lengthy credit approval process. Factoring is not a loan, and you don’t have to wait weeks and weeks to get a decision from a loan committee.

The New Year typically is a time for reflection and goal setting, so why not consider invoice factoring in 2010?

Invoice factoring companies provide critical financial resources to small and mid-sized companies. Invoice factoring isn’t a loan, but a discounted advance on your company’s account receivables.

There is no loan, no debt and no banks involved.

It’s the perfect resource for companies that need a little extra cash, but don’t want to take out an expensive and time consuming loan. Plus, loans have all about dried up for most businesses. So, many are turning to invoice factoring companies to meet expenses such as payroll and  financing extra growth.

You factor when you want, and how much you want, according to your invioces.

Invoice factoring offers opportunties for companies who would otherwise not get bank financing.

When times are tough, many small business turn to invoice factoring as a financial resource. It’s a smart financial vehicle that has been used for thousands of years. In fact, invioce factoring is one of the oldest forms of business financing in the world.

There are many advantages to invoice factoring as opposed to traditional bank loans.

When you factor invoices, it’s not a loan that you have to pay back or that accumulates interest over time. Let’s be clear: Factoring is not a loan, but a cash advance  on your company’s account receivables – before the company pays.

This makes it the perfect financial vehicle for start ups or existing businesses that need a little cash, but don’t want to take out an expensive and time consuming loan. As long as you have invoices, you can factor them.

Plus, there is no long-term commitment or complicated repayment plans with factoring; that’s not the case with bank loans and lines of credit. 

You’re able to factor cash when you need it, such as during the holidays when it may be more difficult to collect account receivables or during an expansion.

Factoring has existed for thousands of years. It is used by major companies, particularly retailers. They use it to stock store shelves and advance funds on seasonal merchandise before it’s sold. Retailers such as Wal-Mart and Kohl’s now offer factoring programs to their suppliers.

Factoring is used by major companies such as Dunkin Donuts and major retailers.

Growing businesses often need equipment, and equipment leasing provides options for companies with tight cash flow.

Often, companies with little revenue  find themselves forced to take hefty credit charges when purchaing items. Equipment leasing is a viable alternative for businesses that need equipment that allows you to lease equipment instead of buying it.

Leasing equipment is often cheaper than buying it and offers many advantages.

You can lease many types of equipment such as office phone systems, computers and software, office furniture, vending machines, medical equipment, factory machinery and trucks.

Technology equipment is ideal, because it quickly loses value when manufacturers update technology. Instead of paying for old equipment, you’ll have modern, updated equipment that can help grow your business.

For more information about how equipment leasing can benefit your business, visit MDS Funding at www.MDSFunding.com, contact MDS Funding at 866-394-4637 or email CashFlowConsultants@mdsfunding.com.

One question I’m asked a lot is the difference between a bank loan and invoice factoring.

The two are very different.

Both provide cash to businesses, but a loan is thought of as traditional financing; invoice factoring isnt a loan and doesn’t require any debt at all.

Invoice factoring is another tool for businesses to use.

You don’t have to wait 30, 60 or 90 days for clients to pay an invoice. With invoice factoring, you get cash in as little as a few days. You don’t have to qualify; generally, there isn’t a concern about your credit, but rather the financial health of the customer paying the invoice.

That’s what makes this so ideal for small businesses. There is no debt, and the process is usually quicker at just 24 to 48 hours than a bank loan.

How Factoring Works

You produce two invoices; one invoice is sent to send the customer and the other is sent to a factor. The factor will pay you the pre-arranged advance amount on your invoice.

The customer pays your invoice and the balance of the payment is paid directly to you, minus a pre-arranged fee.

Is Factoring Right For Me?

To find out if it’s for you, answer these questions:

Would more working capital offset operating expenses?
Do you need cash to grow your business?
Has your business exhausted traditional financing?
Would better cash flow strengthen your balance sheet?

If you answered yes to any of these questions, factoring may be a viable solution to fund your business with no debt, no loans and no banks.

For more information about how invoice factoring in Atlanta can benefit your business, visit MDS Funding at http://www.MDSFunding.com, contact MDS Funding at  866-394-4637 or email CashFlowConsultants@mdsfunding.com.

There are many advantages, but  there is one main benefit: Factoring provides immediate cash to companies that can’t wait 30, 60 or 90 days for clients to pay their invoices.

Factoring gives businesses cash upfront for the invoices. And now you have the operating funds to expand your business, meet payroll and cover other expenses.

There are many reasons businesses use it:

*Get working capital
*Relieve stress from no-pay and slow-pay clients
*Fill more orders
*Increase sales with flexible funding
*Take advantage of vendor discounts
*Fund payroll and taxes
*Extend credit to customers on large orders
*Buy equipment or inventory on demand

The Differences Between A Factor And A Business Loan

Factoring is not a loan. You don’t have to “qualify.” There isn’t any credit application and the factor won’t even look at your credit. The invoice discounter only cares about the financial health of the customer paying the invoice. 

There is no debt, and the process is usually quicker at just 24 to 48 hours than a bank loan.

How Factoring Works

It’s quite simple: You produce two invoices; one invoice is sent to send the customer and the other is sent to a factor. The factor will pay you the pre-arranged advance amount on your invoice.

The customer pays your invoice and the balance of the payment is paid directly to you, minus a pre-arranged fee.

Every day, companies use invoice factoring – selling unpaid invoices to a third party at a discounted rate — to provide funds to run and expand their businesses.

It is one of the oldest forms of financing in the world, and dates back hundreds of years.  Major retailers use it every day. A Commercial Finance Association Survey found that asset-based loans totaled $600 billion in 2008, a figure that has grown since the 1970s.

But many people still don’t know about invoice factoring, how to use it, or how it can benefit their business. 

Invoice factoring is more common than you might think. Although it is thought of as “alternative financing,” it is used by many types of businesses, including service industries, retailers and health care companies.

There are many reasons businesses use invoice factoring:

*Get working capital
*Relieve stress from no-pay and slow-pay clients
*Fill more orders
*Increase sales with flexible funding
*Take advantage of vendor discounts
*Fund payroll and taxes
*Extend credit to customers on large orders
*Buy equipment or inventory on demand

I can’t think of anything that allows you to finance your business with no debt, no loans or no credit applications.If you need fund to expand your business, invoice factoring is a viable solution.

For more information about how factoring in Atlanta can benefit your business, visit MDS Funding at http://www.MDSFunding.com, contact MDS Funding at 866-394-4637 or email CashFlowConsultants@mdsfunding.com.

News that Wal Mart is getting into the invoice factoring business sent shockwaves throughout the industry, but now that the dust is settled, it begs the question: Will the world’s largest retailer hurt or help the industry?

Wal Mart, the nation’s largest retailer, is getting into the invoice factoring business.

It plans to offer about 1,000 suppliers alternative financing, according to an article in the Wall Street Journal. On Nov. 2, Wal Mart rolled out a “Supplier Alliance Program.” It  lets about 1,000 eligible suppliers receive payment for their orders in 10 to 15 days, compared to the traditional 60 to 90 days.

The move by Wal-Mart Stores Inc. follows the Chapter 11 bankruptcy filing of factoring giant CIT Group Inc. earlier this month. CIT is the largest invoice factoring company in the world, funding thousands of small and mid-size businesses, including retailers such as Dunkin’ Brands Inc.

The Wal Mart program will work like this: 

Suppliers can sell their Wal Mart invoices to the retailer’s partner banks, Wells Fargo & Co. and Citigroup Inc.  It will offer interest rates based on Wal Mart’s credit rating and the banks will collect payments from the retailer’s customer, in this case, Wal Mart.  

Factoring A Lifeline For Retailers

The program comes at a time of high anxiety for many retailers, especially during the holiday shopping season. Retailers and suppliers around the world depend on invoice factoring to get cash for their receivables before the items are sold in stores.

CIT Group’s bankruptcy filing narrowly avoided a retail disaster. Many companies have already ordered or received their holiday merchandise.  Meanwhile, CIT plans to emerge from bankruptcy protection by the end of the year and operations have continued.

“We know that many of our suppliers are dependent upon factoring and financing companies that are reportedly in financial distress,” Theresa C. Mercado, Wal Mart’s senior director for product extension, said in a letter sent to 1,000 apparel manufacturers and supliers.

The retailer has about 60,000 suppliers.

Will Wal-Mart Corner The Invoice Factoring Industry?

Wal Mart is a retailing juggernaut that dominates the retail landscape worldwide. Now, some are concerned its latest move will dominate the invoice factoring industry as well and elbow out traditional factors.

Wal Mart’s AA credit rating is particularily attractive to suppliers, who will most likely get lower rates with Wal Mart than they’ll get elsewhere.

For more information about how invoice factoring can benefit your business, visit MDS Funding at http://www.MDSFunding.com, contact MDS Funding at               866-394-4637         866-394-4637 or email CashFlowConsultants@mdsfunding.com.