In today's fast moving economy it is important to understand that accounts receivables are a dead asset. Waiting for your customers to pay their invoices is in essence extending them a Free credit line. Whether your customer is a credit worthy company or not, you are now at the mercy of their cash flow and ability to pay. There is a solution to this situation. Receivable financing is a powerful tool that will help you to reach a new level of financial success.
Modern Factoring is a method of financing used to increase a company's cash flow, reduce overhead, purchase inventory, pay bills, control payroll costs and strengthen bottom line profits. All of these, in turn, will help to improve a company's credit rating.
Factoring accounts receivables gives your business the ability to grow without incurring any additional debt or having to dilute current equity. It provides your company a continuous source of operating capital without being sidetracked by a long, drawn out bank loan application process, 80% of which are unsuccessful. This can mean immediate cash without the consideration of a business' credit rating or additional collateral requirements.
Your customers' credit rating is the criteria that is used to determine whether an outstanding receivable is fundable or not. This credit reporting is invaluable to business' when making a decision to extend credit to a customer because it is based on their operating history, credit worthiness and their ability pay you.
The receivable (a dormant asset) is then purchased by the factorer. It is not a loan. When the receivables are purchased you then have an immediate source of funds for operating expenses which can be allocated for future growth. There are no limitations on how the funds can be used. It is your cash to use as you see fit.
Factoring is the sale of a company's accounts receivables (invoices) for an amount less than (a discount rate) the face value. If the factoring discount is 3%, the invoice is being purchased for $.97 cents on the dollar. This allows a company to convert their dormant assets into immediate, useable cash. It is not a loan and does not affect the company's balance sheet as liability. The receivable is purchased at up to 80% of the face value of the invoice. Once the invoice is paid by your customer, the remaining 20% balance is rebated back to you less the discount fee.
The most important aspect regarding this method of financing is that the credit criteria is based on your client's creditworthiness and ability to pay. This is a major advantage for the business owner, as it does not encumber the personal or corporate assets, so therefore it does not affect the bottom line of the balance sheet in a negative way. The availability of these funds can give the business owner the financial strength the make discount purchases (lowering the cost of sale), remove the burden of payroll demands, increase advertising budgets, equipment purchases for cost efficiencies, make acquisitions for expansion or to hire additional personnel to increase sales and profits.
Using this method of financing, small and medium sized companies can now compete for large contracts and business that might have been beyond the financial reach. Having the available capital to grow your business gives you a margin of comfort that is usually only realized by large corporations.
- Modern Factoring is designed solely to keep your company's cash flowing smoothly and without interruption.
- Invoices are paid within 24 hours by wire transfer direct to you account with no maximum limits.
- Companies that use this program benefit by having the factor act as their billing, collection and credit department instead of employing two or three people to handle billing and collect their funds.
- It is cost effective in raising the cash you need to run and expand your business. It saves you the time and headaches associated with a credit and collection department. This leaves you more time to focus on the things that are really important to you... generating more sales and profits.
- This is the only factoring program that will advance cash to companies that already have a bank line of credit in place, without upsetting your relationship with your bank.
- In simple terms: Our Factoring Program will give you and your company the flexibility and confidence to know that you can handle any opportunity that comes your way, without worrying how you will be able to raise the needed funds. Your company can focus on increasing sales, finance new orders and continue to grow as opportunities present themselves.
"Hyland Financial Group is prepared to assist you in creating the needed cash flow you need to succeed."
If you have current business receivables that you would like to turn into cash, or simply wish to speak with a representative to discuss your individual needs, please contact us at:
Hyland Financial Group, LLC
228 Volkert Street
Highland Park, NJ 08904
All Inquiries are kept strictly confidential.