Mind of Money

When Does Invoice Factoring Make Sense?

View of an invoice form from a man's laptop screenInvoice factoring is a financial transaction that turns your receivables into real dollars in no time. Unlike accounts receivable financing, the factoring company would buy your outstanding invoices in this deal. It may not always be suitable for all financial situations, but it’s one of the better ones in terms of value and convenience.

When should you turn to an invoice factoring firm? Here’s when it makes absolute sense:

You Have Creditworthy Customers

TAB Bank shares that one of the qualifications for online invoice factoring is customer creditworthiness. If the suppliers that owe you money have a good history of paying bills, you can get the most money because the other party would feel confident purchasing your unpaid invoices.

You Need to Expand Your Working Capital Immediately

Unlike traditional commercial loans, invoice factoring offers a speedy and straightforward process. You can receive the funds in a matter of days. The approval of business loan applications takes a while because borrowers come under scrutiny. If you need the money ASAP, you can increase your liquid assets without building an excellent credit rating first.

You Want to Use the Money Without Restrictions

You can use the invoice financing proceeds in whichever way you want. There’s no need to come up with an elaborate presentation about how you intend to spend the money. The invoice factoring company only cares about how fast your customers can pay it. Your spending choices are entirely your own business.

You Like to Avoid Debt Collection

Debt collection can strain the years of business relationships you’ve built with your suppliers. Debt collectors are notorious for relentless contact attempts, which might antagonize your customers.

On the other hand, factoring companies don’t do anything that might cause debtors to ignore their financial obligations. If they frustrate debtors, they will suffer because they would solely absorb the losses from non-payment.

Invoice factoring is a smart way to rid your company of receivable. Do your due diligence to find a reliable factoring firm you can quickly deal with.

April 17, 2018 at 4:32 pmMind of Money

The Truth You Need to Know About Small Business Lending

money on a clipboardThe face of small business financing has undoubtedly changed over the years. Nowadays, small business owners can have an average debt load of $195,000. They also have a higher average credit limit amounting to $56,100.

This doesn’t automatically mean, however, that all small for-profit organizations have secured loans or credit lines that big. In fact, many of them continue to apply for financing services, although some have undergone the frustrating and emotionally-toiling experience of receiving a rejection.

As one of the 2.1 million small businesses in New York, what can you do to minimize financing risks?

Explore all possible financing options

Applying for a traditional business loan is one of the most effective strategies to acquire financing, but some are still skeptical about it. The good news is there are alternatives.

A good example is inventory-based loans (also known as inventory financing). This asset-based lending system gives your business a higher chance of getting an approval since you’ll be using your inventory as collateral. Through it, you’re secured to have a revolving line of credit. You’ll be able to keep product supply in safe quantities, which means more opportunities to make sales and gain steady profit.

There are several other uses for inventory loans, such as backing you up in case of a sudden emergency expense or in case you need to manage seasonal limited cash flows.

Start improving your credit

One of the biggest reasons business owners get a loan rejection letter is their lack of creditworthiness. This factor can make all the difference when applying for a loan, as it’s a reflection of how financially responsible you are. Lenders want and need borrowers like you, but they also have to ensure that they can get their money back. Before applying, make sure you have a good credit.

As early as now, find the most suitable loan for your business and start building and improving your credit. This way, you can grow your list of potential funding sources further and find it easier to acquire them.

March 29, 2018 at 1:00 amMind of Money

Get Your First House In Four Easy Steps

Home about to be soldBuying a house and going into the many details involved can be a very challenging task for first-time buyers. That’s why it’s important to know the necessary steps to buying a home.

Get help from a solicitor

It is always important to ask for professional advice from house-buying solicitors before buying a property. Hiring an expert can save you time when looking at a property to buy

Finding the perfect home for you is not an easy task. Some people even schedule at least seven properties at a time just to look for the right house. It’s always advisable to do some research online before you schedule your trip. It’ll save you more time instead of randomly picking homes in the community.

Apply for a loan

It’s not always necessary to get assistance from a mortgage broker before you buy a home, but it’s better to get your loan preapproved in advance. Doing so will let you know how much you can apply for a home loan.

Learn how to negotiate the offer

Some buyers would often fail to compare prices of homes before striking a deal. It’s better to compare each price and see which one fits your budget the most.

Do a property inspection

Check the interior and exterior part of the house for any damage. It’s always important to conduct a home inspection before buying a house. See if there are any cracked ceilings or walls or you might regret it in the future. It’s sometimes even more expensive to pay for repairs rather than the house itself.

These are just some of the things that you may keep in mind when buying a house. Don’t be in a rush to get a house. Take time to think about it and see if you’re financially stable enough handle it.

March 9, 2018 at 1:00 amMind of Money