Archive of September, 2015

September 27, 2015
Here at TBS Capital Funding, we’re always talking about how great invoice factoring is. That’s all good and fine. But it occurred to us that maybe, at least once, we should back up and tell you simply what factoring is (or isn’t).    Factoring Is Not a Loan – The best definition we’ve read describes factoring – from a business owner’s perspective – as, “a way to get my money as soon as I’ve earned it.” We convert invoices to cash, same day. Our clients think we’re magicians. Try getting a lender to do that.

Here at TBS Capital Funding, we’re always talking about how great invoice factoring is. That’s all good and fine. But it occurred to us that maybe, at least once, we should back up and tell you simply what factoring is (or isn’t).

 

Factoring Is Not a Loan – The best definition we’ve read describes factoring – from a business owner’s perspective – as, “a way to get my money as soon as I’ve earned it.” We convert invoices to cash, same day. Our clients think we’re magicians. Try getting a lender to do that.

 

Factoring Is Affordable – Factoring costs businesses less than the typical credit card transaction, and you get a lot more personal attention for your money. We’ve had more than one client tell us they wouldn’t be able to stay in business without us. Factoring is like listing your house for sale and getting 98 percent of your asking price, in cash, the first day on the market, with no closing costs. Most people would take that deal in a heartbeat.

 

Factoring is fast – It’s not exactly a drive-through, but you can initiate a factoring transaction and get cash, same day.

 

Factoring Is Not a Long-Term Commitment – No loan committee, no site visit, or lengthy due-diligence. No contract required. Factor as much, or as little as you want. Factor once, or make it a habit – most of our customers keep coming back because it’s easy and they like us. But that’s totally up to you.

 

Factoring Won’t Affect Your Credit Score – It’s hard for small businesses to borrow. And if they do, or if they carry credit card balances, it can adversely affect their credit rating. Factoring not only won’t affect your credit rating, but also, a factoring company doesn’t even care about your credit score. A factor is more concerned with your customer’s payment history than yours.

Try it today.

At a recent global factoring conference in Poland, a report placed the global market for invoice factoring at $3 trillion. Almost two thirds of those transactions originated in Europe, while less than 10 percent came from the United States.    The global popularity of factoring, and its relative obscurity here in the United States suggest that the practice – that is, getting cash by selling the value of what your customers owe you before they pay it – might be to the funding world what soccer is to sport.
September 25, 2015

At a recent global factoring conference in Poland, a report placed the global market for invoice factoring at $3 trillion. Almost two thirds of those transactions originated in Europe, while less than 10 percent came from the United States.

 

The global popularity of factoring, and its relative obscurity here in the United States suggest that the practice – that is, getting cash by selling the value of what your customers owe you before they pay it – might...

Let’s say you’re handy and you’ve got $10,000 saved up to start a company. You’ve invented a life-changing business tool called the Really Cool Thing that you can sell for $1,000. You rent a small production space, pay $2,000 for first and last month’s rent and pay yourself a $1,000-a-month salary.    In your first month you make and deliver four Really Cool Things – enough to cover expenses. Your product’s a hit and you get orders for twelve more, to be delivered in the next 30 days.     One snag: You only
September 20, 2015

Let’s say you’re handy and you’ve got $10,000 saved up to start a company. You’ve invented a life-changing business tool called the Really Cool Thing that you can sell for $1,000. You rent a small production space, pay $2,000 for first and last month’s rent and pay yourself a $1,000-a-month salary.

 

In your first month you make and deliver four Really Cool Things – enough to cover expenses. Your product’s a hit and you get orders for twelve more, to be delivered in the next 30 days. 

 

A lot of people are talking about factoring these days. But if the Internet has taught us anything, it’s that a lot of people don’t know what they’re talking about.    Factoring is often confused with accounts receivable financing, a loan secured by customer invoices – with all of the closing costs and paperwork that implies. With a loan, you pay the money back, plus interest.    A factor pays you – advancing up to 100 percent of the invoice value, upfront – and collects from your customer on the invoice du
September 12, 2015

A lot of people are talking about factoring these days. But if the Internet has taught us anything, it’s that a lot of people don’t know what they’re talking about.

 

Factoring is often confused with accounts receivable financing, a loan secured by customer invoices – with all of the closing costs and paperwork that implies. With a loan, you pay the money back, plus interest.

 

Search for the term “factoring” online and you’ll inevitably find an article or two suggesting that factoring is expensive. The question to ask yourself is: compared to what?    If the article tries to compare factoring fees to loan interest rates, you can tell right away that they’re comparing apples to oranges. Factoring is not a loan, it is a sale.    In sales, discounts are a time-honored tradition, with sellers shaving a little off their price to sell more, or meet a specific cash flow target. It is cu
September 07, 2015

Search for the term “factoring” online and you’ll inevitably find an article or two suggesting that factoring is expensive. The question to ask yourself is: compared to what?

 

If the article tries to compare factoring fees to loan interest rates, you can tell right away that they’re comparing apples to oranges. Factoring is not a loan, it is a sale.

 

Has this ever happened to you? Your sales team lands you a nice big order. You check inventory and realize you’re going to have to short ship and disappoint a potentially lucrative customer, or crank up the assembly line to meet your delivery deadline.    Business is good, but most of your cash is tied up in orders that have been delivered but are awaiting payment. It’s going to be at least 30 days before you see that money, and you need to get busy now.      You go see your banker, who applauds your succes
September 05, 2015

Has this ever happened to you? Your sales team lands you a nice big order. You check inventory and realize you’re going to have to short ship and disappoint a potentially lucrative customer, or crank up the assembly line to meet your delivery deadline.

 

Business is good, but most of your cash is tied up in orders that have been delivered but are awaiting payment. It’s going to be at least 30 days before you see that money, and you need to get busy now.

 

 

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