Invoice Factoring

Kris Koonar asked:


If you have decided to tie-up with a freight factoring company, in order to improve your cash flow and also to handle your receivables, then it is important that you conduct a thorough survey of all the freight factoring companies in the market before zeroing in on the ideal company.

Since a freight factoring company will not just be a passive moneylender, but rather be an extension to your business, it is imperative that you locate the best on, since the company’s actions will reflect on your business. A freight factoring company will buy your credit invoices and pay you the invoice amount minus their factoring fee. They might also arrange to collect the invoice amount from your clients on the due date. Thus, it is essential that your freight factoring company act as a solid bridge between you and your clients, especially on the delicate matter concerning payments. Here are some qualities that an ideal freight factoring company should positively possess, in case they need your business.

The Company Should Have The Relevant Experience: The freight factoring company should be experienced enough to handle your business. They should have successfully handled similar clients in the past. They should have the proper experience and staff to handle slow paying clients without raising the tempers of your clients. You should talk to some of the factoring company’s existing clients to get a feedback of their range and quality of services before you make a choice.

The Company Should Have Cool And Gracious Staff: The factoring company should have cool and courteous staff, who know how to handle credit clients and do not lose their cool, when some clients delay payments. They should have the necessary tact and skill to extract payments from your clients on the due date. They should have the latest data at their fingertips, before they start calling or faxing your clients for payments.

The Company Should Have The Necessary Funds: The factoring company should have the required funds to pay you as soon as you present your invoices to them. Any delay on their part will adversely impact your cash flow and in short, negate the very purpose of appointing a freight factoring company.

The Company Should Present Presentable Terms: The factoring fee of the factoring company should be reasonable. They should not insist on a long or short-term contract, since it will prevent you from exiting the contract, if you are not happy with the arrangement. If possible, locate a company that does not retain an additional amount as security, since this will only lock up your money.

The Company Should Delegate Specific Staff For Your Account: Once you do tie-up with a freight factoring company, the company should delegate one or two staff members, specifically for your account. They should be responsible for monitoring your clients and should be answerable to you, whenever you need information or feedback. In case they have any trouble in handling particular clients, then they should inform you immediately, so that you can take immediate steps to defuse the situation, before it goes out of hand. The staff should not be mechanical in their words and action, but instead should interact with your clients and build up their trust and confidence.

You should tie-up with a freight factoring company, only if it possesses all the above qualities, since any weakness on their part will be reflected in straining your relations with your clients and affect your business in the long run.



For Commercial Finance Loans – Accounts Receivable Financing * Business Equipment Leasing * PO Finance * Commercial Property Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.

thebestofkolkata asked:


Hi friends,
I am going to set up a business in India (Kolkata) and it will mostly survive on receiving and paying money online through credit card.
I have money at hand required for the start up but presently i have no fixed monthly income like that of a salaried person.
Please tell me which bank may help me get one small business credit card and what would be the procedure?

Thanks in advance!

Pro-BargainHunter has over 125 different products and Services you Business Needs…Here are the HOT Categories Invoice Factoring Company * A R Factoring * P O Finance * Gym Equipment Leasing * Credit Card Merchant * Collections Services * Retail Store Mortgage * Small Business Loan * Credit Account Insurance

Troy Degarnham asked:


There are literally hundreds of factoring companies to choose from in the modern economy. Each of these companies presents its own set of benefits and advantages to using their company. However, there are a few tips and tricks that can be learned before setting out to find financing companies that will best suit individual needs.

The first aspect to consider when choosing appropriate factoring companies is that there are no hidden fees. Many companies promise great return only to discover that there are invoice fees, charge back fees and other fees that the financing companies are not upfront about. Ask and inquire about hidden fees such as phone calls or any other fees that may not have been mentioned in the company literature. Most reputable factoring companies incorporate the fees for invoices, and other expenses in the percentage that they offer to buy invoices.

That effectively introduces the percentage of which many highly regarded financing companies offer. Be cautious of factoring companies that offer a very high advance rate on the factoring invoices. These are the companies that typically have hidden fees so that when it comes time to get the actual finances, the rate becomes much lower. Generally, a good solid rate for financing companies is around 80%. It may seem unattractive compared to a similar company offering 90% but after hidden fees the percentage usually falls much below 80%. Factoring companies that offer around 80% advance for factoring invoices usually don’t have hidden fees. If they offer 80%, that translates to an actual 80% advance on all factoring invoices that are presented.

Keep in mind that financing companies are essentially taking over the business’s accounts receivables. With that said, factoring companies that offer a professional collections department would be an essential asset. The benefits to finding financing companies that offer this service characteristically speed up the process inherently. The manpower is available to collect the debts from the factored invoices in a professional and timely manner. It also avoids the much dreaded charge back fees when the invoices are not paid after a certain period of time allotted in the initial factoring contract.

Many factoring companies do not assume risk against those debtors that may or may not pay their invoice. A solid company with a reputable factoring history will assume the credit risk associated with invoice factoring. That means that if the client doesn’t pay, the financing companies take that risk instead of the individual business, which is a huge relief for any prospering business.

Factoring companies should be selected following basic ground rules to ensure a successful factoring experience. Select the financing companies according to the history that they have. Any good company will have a proven track record to accompany their claims and should be easily accessible. Factoring companies that understand the needs of any growing business is key to factoring success.



For Commercial Finance Loans – Factoring Loans * Equipment Financing * Purchase Order Finance * Commercial Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.

Kris Koonar asked:


If you own a truck company you must be fully aware that the intensity of cash flow in this business is much higher than most businesses. The list of ongoing expenses like fuel expenses, salaries, truck repairs, rental charges can be overwhelming for anybody. It is a known fact that running a truck company is profitable but the wait for freight bills to get paid after 60 days can be overbearing even for large profitable trucking companies. This situation is more difficult for small and new trucking companies.

In most cases, owners try to get finance from banks in the hope of solving the problem with a line of credits. But this is not easy as the company needs to show a minimum of 3 years of audited finances with regular profits. If that is the case then why would the owner go to a bank for a loan in the first place?

A better solution in such a case is to opt for freight factoring. In freight factoring you are able to convert your slow paying freight bills into easy cash by selling them to a freight factoring firm/company/broker. In this way you are able to get easy finances and handle ongoing expenses for your business. Freight bill factoring is a more flexible way of getting finances as compared to loans.

The process of freight bill factoring for trucking companies is easy. The factoring companies buy your invoices and pays for them upfront. The payment is done in two installments. The first installment, called the advance, of 90-95% of the bill amount is paid when they take over the invoice. The second installment comes when the customer has paid the invoice amount to the factoring company, who then pays the remaining 10% after deducting their fee. This 10% is held up as reserve money in case of charge backs or disputes.

The factoring fee is dependent upon the time taken to clear the invoice and the monthly volume of invoices provided to the factoring company. Discount rate can be from 1.5% to 4%per month depending upon the given parameters.

It is generally seen that factoring companies buy invoices by the non-recourse invoice factoring method. In such cases, it is the factoring company that carries the risk and bears the losses if a client is not able to pay the bills. This comes as an added benefit of factoring and allows you to concentrate on your business to make it grow.

In many cases factoring companies also provide collections and credit protections as part of their services. This saves you from spending more money and time in back office work and provides you with the benefit of concentrating your time and energy and redirecting your money to grow your business.

Freight bill factoring proves to be a boon for the new and emerging trucking companies as they can make their businesses grow without worrying about payments of invoices. Many truck factory owners started factoring their bills to avert dealing with slow or non payers, have with time been able to put away a lot of tension and concentrate in a more focused manner on their business.



For Commercial Finance Loans – Factoring Loans * Equipment Financing * Purchase Order Finance * Commercial Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.

Gregg Elberg asked:


Many business opportunities come with an associated challenge. For most entrepreneurial businesses, the greatest challenge is financing the business opportunities created by your sales efforts. What are your options if you have a sales opportunity that is clearly too large for your normal scale of operations? Will your bank provide the necessary financing? Is your business a startup, or too new to meet the bank’s requirements? Can you tap into a commercial real estate loan or a home equity loan in sufficient time to conclude the transaction? Do you decline the order? Fortunately there is an alternative way to meet this challenge: You can use Purchase Order Financing & Letter of Credit financing to deliver the product and close the sale.

What is purchase order financing?

Purchase order financing is a specialized method of providing structured working capital and loans that are secured by accounts receivables, inventory, machinery, equipment and/or real estate. This type of funding is excellent for startup companies, refinancing existing loans, financing growth, mergers and acquisitions, management buy-outs and management buy-ins.

Purchase order financing is based upon bona fide purchase orders from reputable, creditworthy companies, or government entities. Verification of the validity of the purchase orders is required. The financing is not based on your company’s financial strength. It is based on the creditworthiness of your customers, the strength of the commercial finance company funding the transaction, and in most cases a letter of credit.

What is a letter of credit?

A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. If the buyer is unable to make payment for the purchase, the bank is required to cover the full amount of the purchase. In a purchase order financing transaction, the bank relies on the creditworthiness of the commercial finance company in order to issue the letter of credit. The letter of credit “backs up” the purchase order financing to the supplier, or manufacturer.

Is purchase order financing appropriate for your sales program?

The perfect paradigm is a distributor buying products from a supplier and shipping directly to the purchaser. Importers of finished goods, exporters of finished goods, out-source manufacturers, wholesalers and distributors can effectively use purchase order financing to grow their businesses.

Is purchase order financing appropriate for growing your sales orders?

Purchase order financing requires you to have management expertise- a proven track record in your particular business. You must have bona fine purchase orders from reputable firms that can be verified. And you must have a repayment plan; often this is from a commercial finance company in the form of accounts receivable or asset-based financing.

You should have a gross margin of at least 25% to benefit from purchase order financing. Sellers of services or commodities with low margins, such as lumber or grain, will not qualify.

The bottom line decision for purchase order financing:

It can take two or more years to develop a profitable business. Banks generally base their lending limits on a business’ performance for the past two or three years. Purchase order financing, combined with letters of credit and/or accounts receivable or asset-based financing can give you sufficient funds to cover your operating costs, financing costs and still realize significant profits. If you qualify for purchase order financing, you can grow your business by taking advantage of large purchase orders and eventually qualify for bank financing.



For Commercial Finance Loans – Accounts Receivable Financing * Business Equipment Leasing * PO Finance * Commercial Property Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.