What Ails Small Business Today!
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Small businesses continue to struggle. Businesses are facing multiple problems, with the single biggest problem being sales. A poll of National Federation of Independent Businesses (NFIB) members, revealed their main problem is a lack of sales. Of those polled, 51% cited lackluster sales as their No. 1 problem, while only 8% said access to credit was their top concern. Without increasing sales there is no growth, without growth there is no new employment and the economy struggles along.
Some small business are experiencing growth and have a need for working capital to support the growth. These are businesses that have discovered a niche, increased marketing efforts, changed products or product mix and are having some success as a result of the efforts. For these businesses, having sufficient capital may be a problem as credit is difficult to obtain.
For these businesses invoice factoring can be a valuable solution for obtaining working capital. Using this type of service allows a company to obtain cash within a couple of days. The owner of the company controls the cost of the service and in most instances the cost will range from 3-5% while allowing the growing company to take on more work, add employees, pay suppliers and increase cash. This service is fast, simple and is "use it as you need it" with no contracts or terms required.
Jan J. Cunningham
The Interface Financial Group
Small Business Credit
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The Wall Street Journal reports, "According to semiannual surveys from the National Small Business Association in Washington, between 22% and 29% of business owners relied on vendor credit to meet their capital needs between August 2008 and December 2009. That number hovered at about 18% prior to the credit crunch, according to other surveys published by the advocacy group.
Vendors may be open to modifying contract terms, particularly if they are smaller and more flexible operations. To keep customers happy and paying on time, vendors have grown increasingly willing to extend interest-free pay cycles or provide trade credit, which discounts a promptly paid invoice. These arrangements can improve cash flow and infuse a business with capital."
The Interface Financial Group has provided invoice discounting services to small businesses for over 38 years. Whether selling a single invoice or a group of invoices, a business can have cash in hand in 24-48 hours immediately improving cash flow and working capital. The service is "use it as you need it" and does not require having to negotiate with vendors for additional credit. A business can continue to grow when it has cash available to meet the operational needs of the business.
This is a valuable financial service for small businesses in today's economic climate when obtaining credit is challenging. This service is available to small businesses throughout North America, New Zealand, Australia and Singapore. Thousands of companies have utilized this service and many are finding it very useful as they begin to grow in these difficult economic times.
Jan J. Cunningham
The Interface Financial Group
HELP YOUR CLIENTS TALK TO THEIR CUSTOMERS
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Hiring a factor can be difficult for some business owners because they may be worried about how their customers will view the new financing relationship.
How does your client tell their customer that The Interface Financial Group will be managing their invoices? There are a number of ways to go about it, suggest the following:
• My new partnership with the Interface Financial Group will allow my business to grow.
Because the demand for your services is so high at the moment, many companies in the industry are using alternative sources of financing to try to grow each day.
• Our business relationship will not change.
Even though IFG will be managing my company's receivables, our business relationship will go unchanged. We will continue to provide you with excellent services and bill as usual. The only thing that will change is the remittance information.
Sabeen Ahmed
The Interface Financial Group
Your Client’s Reputation
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This is a concern of many companies who are considering factoring as a finance strategy. However, establishing a factoring line is a positive statement--not a negative statement--to make to your customers. Not all businesses qualify for lines of credit.
Selling accounts receivable to generate cash is a finance method used by very large corporations worldwide, with the factoring service provided by the largest banks in the nation. In the past, only large corporations with millions of dollars in receivables per month qualified for factoring. Often factoring companies refused to work with smaller companies or companies with a large number of small invoices. Because factoring is widely known, your customers will view this as a positive ability on your part to secure financing, not as a problem with cash flow.
It's likely that many of the companies that you service already deal with factoring companies and may not even be aware of it. Sometimes payments for invoices directed to a P.O. Box are actually going to a factor. Many substantial companies factor millions of dollars of their accounts receivable every year.
Financing obtained through the sale of accounts receivable factoring is most often used by a firm to expand and take on larger projects; not merely for cash flow or payroll. Now that this service is available to companies like yours, you can enjoy both the perception and the reality of being a growing company, moving forward.
Sabeen Ahmed
The Interface Financial Group
How to Manage Your Client’s Factoring Fears
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Fear: I'm nervous to use factoring because I've never heard of it.
Reality: Factoring has been around for over 4,000 years. Many big name companies have benefited from factoring. What's more, every credit-card holder uses factoring daily. When someone buys something from a store on credit, the credit card company pays the store and collects the money from the credit-card holder at a later date. Interest continues to accrue until the balance has been paid in full. Accounts receivable factoring is the same concept.
Fear: Factoring is an expensive financing option.
Reality: It's important to consider the fact that a factoring fee is not the same thing as an annualized interest rate. For example, if a factoring firm charges 3% per month, it cannot simply be translated into 36% APR. Rather, a factoring firm's fees stop the day an invoice is paid. You do not typically wait 12 months to receive payment on an invoice, so the fee is not nearly as large as you perceive it to be.
Fear: Factoring requires a long-term commitment.
Reality: Unlike a bank loan and unlike most factoring companies, the Interface Financial Group does not require a fixed-term financing commitment. You choose when, who, how much and how long to factor your invoices.
Fear: I will lose control over my accounts.
Reality: Invoice Factoring with Interface Financial Group makes it easy for you to manage your invoices. IFG Funding offers its clients access to an online reporting system 24/7/365. You have the ability to review purchased accounts and collections in real time via a secure Internet connection.
Fear: My customers will think I have cash flow problems.
Reality: Remember, lots of businesses use factoring and many large corporations are already familiar with factoring. Once alerted of the change in remittance address, customers simply view IFG as your new accounts receivable department.
Fear: My customers will be bothered by frequent collection calls.
Reality: The Interface Financial Group will initially contact your customer to verify that the invoices are valid. If there is a problem after funding and IFG cannot successfully collect on the invoices, we will contact you to discuss the issue.
Fear: My business model is too complicated for a factoring firm to understand.
Reality: IFG has been operating in the factoring industry for over 35 years and has experience dealing with many and varied businesses, especially construction.
Sabeen Ahmed
The Interface Financial Group
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