Factoring Fort Payne AL

There are many ways to keep the cash flowing when handling your business and dealing with the business world. One of the methods utilized to maintain cash flow, a method that are growing quickly in popularity, is that of factoring. Factoring is the practice of selling your accounts receivable at a discount to another company. You get the money from the company that you sold your accounts receivable to and they become responsible for collecting the money.

The reason this move is often made is to ensure the continuous flow of cash in a business. When you turn over this responsibility to a professional company, you are freed up to concentrate on making more profit. Essentially, the practice of factoring is based on the "one in the hand is worth two in the bush" idea, and companies who use factoring are putting an emphasis on having most of the money now rather than all of it later. It can take time to collect on an invoice, so when a company factors its accounts receivables, they are getting their money faster and without the hassle of collection.

Especially with small businesses, it is important to have working capital, which is what factoring gives them. The money, then, can be invested, used to pay bills, and used toward payroll. The alternative is, of course, to chase the client or customer for the invoice payment and defer everything else while the money is tied up with the customer.

In order to fully understand factoring, you should be familiar with the practice: which companies do it, and a number of other important ideas behind it. So, consider the following ideas so that you can obtain a deeper understanding of factoring. Who knows, it may even be best for your business in Fort Payne. Many businesses have found out that factoring has improved their bottom line, and have stayed with this process for many years.

Obviously, factoring is not free. The company that is factoring their accounts receivable should expect to be charged a fee since this is essentially a loan against an unpaid balance and logical, the company that handles the factoring is in business to make money. The key is to make sure that the factoring is cost effective, and sometimes that means considering all of the factors and then periodically checking to make sure that your company is benefiting from it. The idea is to have money in hand rather than chasing the full amount. So how much can a business expect to give up when factoring? Knowing what to expect can help to make factoring more understandable and can help the business owner determine if factoring is an appropriate avenue to pursue.

Obviously, a business will not receive full value of the invoices they are factoring. As well, the sum that is paid to the factoring company is often a negotiated price that is based on a number of factors. Usually the number comes in at around 65% to 90% of the receivable debt. That means if a company is owed $1,000, a factoring company will pay them between $650 and $900 to take the account off of the hands of the company.

Some factoring fees are flexible depending on the account being sold. For instance, a company may get a more favorable factoring deal for debts over $100,000 than for those under $10,000. Perhaps the company gets 90% on the former and only 70% on the latter. As a final point, it is important that the amounts and any changes are negotiated before such things come up, and the business owner should carefully read all agreements made with the factoring company.

When it comes time to negotiate that rate, it is important to know what influences the rate in the first place. Like with any other service, there are considerations that will affect what a company is willing to offer you. These considerations should be taken into account by you as you enter negotiations; if you want to be successful, you will need to keep an eye out for your own interests.

For one, the financial stability of your customers is a factor. What does that mean? It is a way of saying that a factor is willing to take a smaller percentage if they know your customers can afford to pay their bills. If your customers have poor credit and bad reputation for paying, then you can expect to pay for that extra risk.

Secondly, how much you commit to per month will influence the rates you receive when it comes to factoring. The more you promise to the factor, the less they will be willing to take. Like you, they are willing to take more "in hand" as opposed to "in the bush."

Your contract is also a consideration. The length of the contract you sign with your factor will be a consideration when it comes to rates. The longer you are willing to commit to a company, the more likely they are to commit more to you over the length of that contract.

As you can see, many factors influence your factoring rates. When you sit down for negotiations, make sure you know where you stand. By knowing what you are doing for the factor, then you can make more reasonable demands on what they should do for you. Don't be afraid to spell out exactly what you need, so that the factor has exactly the information needed in order to bring what is needed to the negotiations.

AdvanceMe, Inc.

1.888.700.8181
600 Townpark Lane
Kennesaw, GA
www.advanceme.com

COMPANY OVERVIEW

AdvanceMe, Inc. is the nation’s leading and most-trusted provider of alternative funding and financial services to small-and medium-size businesses. We help to power the growth of these businesses with working capital. Thousands of businesses use AMI financial services as an alternative to small-business loans.

AMI has funded over 18,000 transactions and over 100 franchise concepts and has provided nearly $380 million of working capital since its inception in 1998. AMI invented the alternative funding category and continues to lead it with innovative financial services for businesses.

Our objective is to provide the necessary working capital to help these businesses manage their cycles and existing cash flow and to provide them with carefully timed funding to assure their continued growth.

Located in metro Atlanta, Georgia, AMI has a nationwide sales and customer care staff supporting nearly 10,000 businesses. Founded in 1998 with $9 million in revenue, we have experienced double-digit profit and revenue growth, and are poised to exceed our aggressive target of $265 million by year-end 2005.

AMI's fundamental strengths define our unique position as the capital provider of choice for smart business people around the country.

OUR MARKETPLACE

There are nearly six million small businesses in the United States, each one reflecting the hard work and dedication of its owner. According to the Small Business Association (SBA), “Inadequate or ill-timed financing is a major reason for small business-failure.” Our objective is to provide the necessary working capital to help these businesses manage their cycles and existing cash flow and to provide them with carefully timed funding to assure their continued growth.

OUR STAFF

The AdvanceMe, Inc. sales and customer-care staff are among the most dedicated people in the financial services industry today. These highly trained professionals are frequently complimented by our customers for their responsiveness. Our sales staff is trained to understand you and your business and not treat you like a number. In fact, many of our sales people come from the same industry they sell to, thus providing a more personal and consultative relationship.

OUR SYSTEMS

AdvanceMe, Inc.'s technology-based systems are a benchmark in the financial services industry and the backbone of the company. These systems provide fast, reliable and accurate methods by which businesses can apply and qualify for working capital and an innovative method by which the money is repaid.

A simple “swipe” of a customer’s credit card keeps your working capital advance up to date. Since the rate at which we collect our money is determined by a realistic evaluation of your company's prior monthly credit card receipts, the collection process is both predictable and easy. Our unique credit scoring system provides a “customer friendly” approach to qualification. When most lending institutions seek to "screen out" potential applicants, we work hard to “screen in” qualified business applicants.

OUR FINANCIAL PARTNERS

We believe that our business is only as good as the partners we keep. In this case, AdvanceMe, Inc. stands apart. We are proud to be supported by the most reputable names in the finance industry. Their commitment to our company and products translate into financial strength and stability for our customers and assures us of continued liquidity to meet our aggressive growth initiatives. We believe that there are no finer, stronger relationships in the financial service industry today.

We believe that the entrepreneur is the spirit of American business and working capital its growth engine. As our partners will attest, an investment in AdvanceMe, Inc. is an investment in the backbone of American business.