Rapid Growth Often Leads to Factoring Receivables

It actually is very common for a startup business faced with greater-than-expected success or demand to seek invoice factoring services. Such a company probably does not have the cash reserves or long credit history to obtain the money it needs from a traditional bank to fulfill orders or provide service.

Fortunately, an invoice factoring company like Business Factors, Inc., does not see “no credit” the same as “bad credit” in the way banks generally do. Many startups without a history of credit simply haven’t had the opportunity to establish one yet.  According to expert predictions from Inc. Magazine, with staffing agencies experiencing a boom in growth, staffing factoring proves to be a great option.

Payroll Funding To Assist Businesses with Personal Liens

In addition to working with startups that have yet to solidify their credit history, account receivables factoring will often times work with businesses where the owners have a personal bankruptcy. Invoice factoring companies view personal and business accounts separately, provided that the business is filed as a corporation such as an LLC.

For instance, our payroll factoring company was able to work with a startup staffing agency in San Diego, CA providing it with a $150K line of credit. The company was turned down by a traditional bank because its owner had personal tax liens unrelated to the corporate entity. The factoring company was able to discern that the LLC was established separately for the sole purpose of the running the agency. In many cases, payroll funding companies can work with the corporation provided it is free of its own liens or encumbrances.

Because of payroll factoring, the startup was able to continue its business operations and meet its clients’ demands. As a result, people sourced by the local staffing agency were able to go to work as temporary employees. Without invoice factoring as an option for this small staffing startup, this business may have not been able to succeed & keep their doors open for future business. Another great success story for the factoring industry.

Fortunately, if you’re business is an LLC or corporate entity, it is viewed as a separate unit from yourself. This means that even though your credit history may be in the gutter, it will not be taken into consideration when assessing your business’s credit, provided it is free of any liens or impediments.

Factoring Services: This Isn’t Your Grandfather’s Bank

Unlike those nerve-racking banks, invoice factoring also called account receivables factoring makes a determination to provide you with money based on the value of your existing current invoices rather than on a FICO score. This is one reason why factoring receivables can be the preferred choice of business startups and those tied to owners with less than perfect or not-yet-established credit scores.

As a recent example, an invoice factoring company was able to provide funding to a an Electronics Assembly and Design company in San Jose, CA even though the owner had poor personal credit due to a strategically planned property foreclosure a few years ago. As a result traditional banks would not lend to this individual’s business even though they are separate entities. The $300K secured from factoring receivables enabled the business to secure a large contract in order to continue delivering top-notch products to its new and existing customers.

Personal Bankruptcy May Not Affect Business Factoring invoices

The practice of factoring receivables assesses the value of your invoices, your clients’ history of paying their vendors on time, their good standing and more. So if your customers generally pay their bill on time, then you may be a good candidate for invoice factoring. Though invoice factoring companies may vary, they generally pay you up to 96% of the total dollar amount you are seeking. In other words you pay an agreed upon percentage (about 3-5%) to the factoring company.

And unlike a traditional bank that generally will take weeks and weeks to let you know whether or not they’ll do business with you, with an invoice factoring company, you’ll know in a matter of days. Same day service is possible, depending on your individual situation. Try getting your money the same day at a regular bank.

Choose Factoring Invoices for One-time Technology Investments

Yet failing to take advantage of new technology could be costing your business a lot more than you might think, in terms of payroll, productivity, and profitability. When to upgrade can be a question that requires a lot of thought and research. But if it has been several years since your company’s had an IT overhaul, it is worth your while to take a look.

If you and your IT manager are talking about upgrading but aren’t sure how to fund this long-term investment, invoice factoring or account receivables factoring could be a great option. By using your existing invoices as collateral, you can work with a factoring company to secure a lump sum of cash to invest in a technology upgrade, whether that’s software licensing or leasing new equipment.

Upgrade Your Business’s Productivity with Invoice Factoring

Factoring invoices can be a great option for companies to secure cash needed for an unexpected expense or a sporadic investment. Unlike a traditional bank, an invoice factoring company values existing invoices and company standing more than it does credit scores. Technology business investments are a snug fit for factoring receivables because they are an infrequent purchase. Banks may require lengthy justification for this type of investment whereas account receivables factoring does not.

Depending on your company’s situation and the amount of funding you are seeking, invoice factoring generally pays you about 96% if the total value you are requesting. So if your company is investing in an automated tracking system that is looking to save the company 20% year over year, it is likely a move worth making.

Waiting until your company has enough money in the bank to cover technology upgrades could be costing you both in terms of pure dollar amounts and even more in productivity and loss time. So talk to factoring receivables specialist to see how an investment now in better technologies could save you for years to come.

If you are one of those businesses who were faced with a lot of challenges in 2012, you are not alone. For those who owe the government money in the form of back taxes, there are some options to consider. The IRS’s Fresh Start Program and invoice factoring financing may be available to help out businesses who have seen better days.

How Factoring Receivables Can Help with the Fresh Start Program

Recognizing the challenging economy, the IRS is offering a temporary tax relief program to help certain small business owners. Businesses that have not been able to file taxes and have gone through a significant decline in revenue may be eligible. If you qualify, the IRS may waive certain fines or late penalties giving you more flexibility and time to pay your dues.

Factoring Receivables May Enable You to Pay by New Deadlines

While the Fresh Start Program may forgive some debt and extend your deadline, you will ultimately still have to make your payment, and this is where account receivables factoring can help. Specialists at an invoice factoring company are familiar with common woes businesses face during tax season and are able to work with you to get you the money you need to meet the extended IRS deadline.

Invoice Factoring Services Can Enable Businesses to Meet IRS Obligations

Because factoring invoices relies on the value and assessment of your existing invoices rather than a credit score, a factoring company can work with a business with a less than perfect rating. Rates for factoring services are fair, stated up front and range from 4 to 6 percent in most cases so business can get up to 96 percent of their money to pay to the IRS.

With the IRS’s Fresh Start debt forgiveness program and the reliability of account receivables factoring, companies can get their taxes paid and get the IRS off their back.

Paying your annual dues to Uncle Sam is an inevitable, yearly endeavor, but it is possible to reduce how much you have to pay with tax write-offs. Hiring a reputable accountant can help with this daunting task. Even so, you must keep and file business receipts.

Here’s a non-inclusive list of possible tax write-offs from BankRate.com to try and mitigate the costs of running your business. So when it comes time to pay, account receivables factoring can help make sure you meet that looming IRS deadline.

Invoice Factoring Can Help with Payments So Figure Out Your Business Deductions

Writing off business expenses can help you minimize what you owe and you’ll have lower taxable earnings as well. In general, any equipment, tool, device, furniture, technology, software, etc., that is used exclusively for your business could be a write off. Services as marketing, legal, educational and financial could also constitute as a business expense as could overhead and transportation costs.

Some areas of tax deductions can get a little tricky such as travel and entertainment. Business travel is a legitimate deduction, but traveling to Tennessee to visit your sister and talking about your business with your brother-in-law over drinks, probably isn’t. Remember, the burden of proof rests with the business.

Once you get your taxes and deductions in order, invoice factoring also known as factoring receivables can help you secure the money needed to pay your taxes in full and on time. According to FoxBusiness.com, the IRS pays attention to businesses that pay on time and is more likely to work with a struggling business that is able to make an on-time payment versus one who simply ignores the filing deadline.

Factoring Receivables Specialists Are Prepared to Deal with Tax Crunch

An invoice factoring company, which is highly familiar with the burdens small business face during tax season, can help you get the money you need to meet this ominous deadline. This way, the IRS will be more willing to work with you in a favorable manner if you have tax payment issues. When you decide you are ready to start factoring invoices, businesses can get their money in as little as 24 hours with low rates and for only a small percentage of its total value. This means that with Invoice factoring services in most cases businesses get up to 96% of the value of their invoices with the remaining going to the factoring company in exchange for their services.

The Costs of Factoring Invoices Can Save You Money Over Time

Though some businesses may scoff at having to pay a factoring company like BusinessFactors.com in order to get money to pay the IRS, it is much favorable when compared to having to deal with the stacked fines, penalties and levies you will have to pay to the IRS as a result of nonpayment. In extreme cases the government can actually seize your business and its assets.

So when it comes time for payment, talk to an account receivables factoring specialist so you can get your money in time to meet the IRS’s closing date.

Los Angeles, CA (PRWEB) April 17, 2013 –– Tax season is now upon us and with this somewhat sluggish economy, many businesses are struggling to meet their tax obligations. Whether you’ve filed an extension, plan on filing late or have worked out a compromise with the IRS, Business Factors LLC, a premier invoice factoring company, is bolstering its line of credit so that it can meet the expected demand for its factoring services.

Cash flow issues, slow-paying customers and flat revenue growth are just a few reasons why a company may not be able to pay their taxes on time. Because invoice factoring assesses the value of existing invoices and assets rather than a credit score, there is a high likelihood that struggling businesses or those who owe back taxes may qualify for factoring invoices. The specialists at Business Factors are familiar with the challenges companies face during tax season and are able to answer any questions businesses might have about using factoring receivables to pay their taxes.

According to Debt.org, it is important to remember that the IRS wants businesses to file, even if they are unable to make full payment. The IRS is more likely to work favorably with a company that files an extension than one that doesn’t file at all. Whether a business is making its tax payment in full, filing an extension to pay, paying on a payment plan or something else, account receivables factoring is a reliable service for a company to use in order to get money and meet its tax obligations.

“Tax season is generally a busy time for us as far as providing invoice factoring services. Many businesses find themselves in a financial squeeze to pay the taxman while others weren’t expecting to owe taxes,” says Robert Bernfeld, President of BusinessFactors.com. “Whatever the situation, we are happy to talk to these businesses to see if we can provide account receivables factoring so that these companies aren’t unduly penalized for failing to file.”

About: BusinessFactors.com is an invoice factoring company providing accounts receivables financing to businesses of all sizes and industries. Businesses can get an advance of up to 96% of their unpaid invoices within 24 hours with low rates and use that much needed money for growth, expansion or paying their bills.

File for an Extension and Get Help with Invoice Factoring

In this difficult economy, more and more businesses are filing tax extensions this year to defer payment. The IRS will still hit you with fines and added interest for going this route, but they will be minimal when compared to other options such as failing to file (which the IRS hates and penalizes the most).

Getting an extension or payment plan will provide you with more time to review your books, collect outstanding invoices, and bolster your cash flow. The extension is intended to provide a time-buffer allowing you to pool all your available resources so that you can pay the IRS with minimal fines.

Factoring Invoices Can Solve the Late-Paying Customer Problem

Whether or not you file for an extension, invoice factoring is an option your business can consider as a way to secure this money to pay your levies. Maybe you are waiting on a late-paying customer or a sure-thing deal fell through at the last minute. You were going to use this money to pay your taxes but now you can’t and you don’t know what other options you have. Factoring services can help.

Account receivables factoring, which has been around hundreds of years and grown in popularity more recently, is a financing method where a company’s existing invoices are used as collateral in securing need-it-now cash. Unlike bank loans, invoice factoring does not rely on credit reports so businesses with so-so FICO scores can take advantage of invoice factoring services. Moreover, bank loans can take weeks or months to secure where Factoring receivables takes only a matter of days.

Account Receivables Factoring Is Easier than It Seems

And unlike the tax laws, which must be deciphered by a Certified Public Accountant, the factoring invoices guidelines will be explained by a customer-service oriented specialist who can tell you exactly the percentage they charge and exactly when you will get your money. Most factoring services cost about 4-6% of the value of your money meaning you get up to 96% of your money. Unlike filing your taxes, ease of use is actually one of the essential components of factoring receivables.

“Do I Qualify for Factoring Receivables to Help Pay My Taxes?”

If you are like many of the thousands of business out there that owe the government back taxes, invoice factoring or account receivables factoring services can help. Depending on your business’s unique situation, an invoice factoring company can more than likely provide you with the money you need to pay your taxes on time.

“Do I Need Invoice Factoring, Can’t I Just Wait to Pay My Taxes?”

You can of course, and many businesses do. But if you delay and pay your taxes late, you will get hit with a hefty fine, depending on how much you owe, and how late you pay. Because the factoring receivables process is based on speed and efficiency, you can get your money in less than 24-48 hours in most cases. Even though you will have to pay an agreed upon fee (4-6%) to the factoring company, it is probably a lot less than you’d pay to the IRS.

“I Don’t Need Invoice Factoring Because the IRS Won’t Notice I Owe Them Money”

Never happens. No matter how small of a business you are or how little you may owe, the IRS, sooner or later, will figure out that you owe them money and they will do what is needed to collect it. So rather than run the risk of an audit or allowing fines to accumulate invoice factoring services enables you to pay on time.

So don’t spend your precious time and energy trying to avoid the inevitability of having to pay your taxes to the IRS. It is a futile pursuit that will only cause headaches and aggravation for all involved. Many invoice factoring companies have staff on-hand who is familiar with the issue of paying back taxes so they can work with you to make sure you meet your deadlines.

Staffing factoring is a way fast-growing companies can get the cash it needs right away to cover large, new hire payrolls. If a client needs to hire in bulk for a project, for instance, a staffing company needs to be able to fulfill that order right away or risk losing it. With new staffing agencies popping up all the time, competition is tough.

Consider Payroll Funding because Job Fulfillment Needs Won’t Wait

Staffing financing or payroll financing lets temp agencies get the money they needs right away rather than having to wait and wait for a bank loan. With this high level of growth in the market only likely to continue, having to wait for financing may mean losing the deal. And because staffing agencies often don’t receive what’s owed to them even after they’ve provided the staffing services, cash received from payroll factoring can cover any cash flow issues.

For those agencies that fill specialty staffing needs, such as medical or IT contracting, payroll expenses can be quite high and waiting to receive payment from a client may not be an option. In this way, payroll funding ensures workers are paid but also that your staffing agencies stays on track focused on hiring the most sought-after people they can find.

Consider Years in Business, Line of Credit When Reviewing Payroll Funding Companies

The boom in temporary agencies has led to a boom in invoice factoring companies themselves who are looking to provide

With so many new invoice factoring companies popping up all the time, it is always a good idea to research and study the factoring company thoroughly before choosing which company to partner with. Consider number of years in business, credit line available, reputation, and familiarity with the staffing and payroll factoring niche to name a few. Deciding to work with one of the payroll funding companies that has more than 25 years of in the business with a credit limit of $100M or more is a good place to start.

Payroll Factoring Becoming a Go-To Option for Staffing Startups

During this time of growth, staffing agencies need to find a way to fund their startups, and some are turning to staffing factoring, also called payroll factoring, as a fast, reliable financing option. Obtaining a loan from a traditional bank can take several weeks and many are reluctant to lend to startups or businesses with less than one year of experience. Payroll funding, on the other hand, will work with startups because an invoice factoring company will look at the startup’s business plan, potential for growth, and contracted customers whereas a bank generally will rely heavily on credit scores.

Payroll Financing Enabled Growth for These Three Small Businesses

• BusinessFactors.com recently provided $350K in payroll funding to a New York City security guard company that was offered a huge city contract. It was an excellent opportunity, but the company needed to secure additional funding to make sure it could cover the costs associated with the bulk-hiring contract. BusinessFactors.com provided the security guard company with the payroll financing it needed so it could land the contract, hire additional guards and cover payroll.
• In Dallas, Texas, a staffing agency that provides electrical and maintenance workers to the seasonal oil and gas sector needed cash to cover payroll. Long payment cycles are the norm for the industry so payroll funding and cash flow issues are somewhat common. BusinessFactors.com was able to provide a $500K line of credit in time so that payroll financing needs could be met.
• One specialized field that’s seen considerable growth is medical staffing. According to the American Association of Colleges of Nursing, with an already existing nursing shortage, nurse staffing agencies are in high demand. In Seattle, WA, BusinessFactors.com provided a travel nurse staffing company with $100K line of credit so that it could hire nurses to keep up with demand. As a result of this staffing financing, 11 new nurses are back at work caring for patients in busy hospitals.

Staffing Financing Companies Consider Business Potential, Not Just Paperwork

Payroll funding companies are customer service oriented so they will take the time to look at your company’s unique situation to determine financing. They are willing to invest in your company’s future success even if you are new and are lacking a history of credit.