Bay View Funding Blog

We are happy to report that further to recent findings from NFIB.Com, the Small Business Optimism Index is up! This is an indication the economy is slowly moving forward. At least this is what we would like to think – or is the economic rollercoaster still in full swing?

The April 2014 report, which is a reflection of the opinions of business owners/members of NFIB, indicates that after February’s decline, confidence is up in March. “Overall, the March gain more or less reversed the February decline, while the Index still can’t seem to get above 95, we can be encouraged that the economy is at least crawling forward and not heading in reverse,” said NFIB chief economist William Dunkelberg. What is the improvement down to? In part real sales gains (50%), inventory satisfaction and inventory investment plans.

There are times when a company will contact a factor believing they are in great shape to finance their accounts receivable, in other words, to use their invoices to generate cash flow. One of the first phases in the factoring process is to establish a viable relationship. Sometimes the answer is not what the company wants to hear.

This begs the question, Why am I unable to factor my invoices? There is a general misconception that invoice factoring is easily obtained and it is simple to qualify when a cash flow crisis arises, but not in every circumstance. Why should the answer be no?

While, generally speaking, it can be easier to obtain invoice factoring than it is to establish a loan or line of credit at the bank, the factor will still be looking to make sure your company finances are in good shape.

As part of the invoice factoring process, the factor will initially establish your financial objectives. Obviously you are looking to alleviate cash flow issues but the factor will want to determine exactly why. This is where the initial paperwork comes into play.

There are many articles written about invoice factoring being an excellent choice if your company credit history is less than perfect. While it is true that the factor looks at your customer’s credit rather than your own, this is not the only part of the equation.

Bay View Funding has successfully funded advances of over $450,000.00 to 3 high growth companies with working capital challenges in Philadelphia, Delaware, and New York.

While we like our blogs to be informational, we think it is helpful to illustrate the ways in which working capital can be managed with the help of invoice factoring. We are happy to share some recent success stories, and will do this from time to time to highlight the industry specific companies we are able to help.

Jerry Calabrese, Business Development Manager, for Bay View Funding in the Mid Atlantic Region, shared “It is always gratifying to enable high growth companies succeed using invoice factoring, a much overlooked, but extremely simple, effective source of financing. The 3 companies in question were experiencing different situations that were a perfect fit for accounts receivable funding. We were able to provide a simple solution to the challenges they were each facing.”

Building upon recent posts concerning cash flow, it seems that many companies are still taking longer than ever to pay their invoices. This is a dilemma for small businesses waiting on invoice payment to effectively cover operating costs.

Even though the economy is slowly recovering, many large corporations are still pushing smaller suppliers into long payment cycles of up to 90 days, threatening to back out of deals or find new sources if their demand for a 90 day payment cycle is not accepted. This can simply not be viable for some small businesses that do not have the sway to delay payment to their suppliers.

 Before we launch into the benefits of factoring your accounts receivables, let’s revisit a few ideas that may help the payment process along.

Eliminating a Cash Flow Crisis – How Invoice Factoring can Help

Invoice factoring is a highly effective tool when it comes to helping with cash flow management. However it is essential that the cash flow cycle for your company, and your industry, is evaluated and understood.

We all know that monitoring cash flow is critical for success. Once cash flow is managed, decisions can be made about whether or not invoice factoring is the most effective answer to help your business achieve optimum cash flow goals.

Are you paying too much for invoice factoring?

How would you know? Read on to make sure you are accessing your working capital for the lowest rates, while also receiving fast turnaround and great customer service.

There is often a collective sigh of relief when your company makes the decision to factor accounts receivables. The forms have been submitted and accepted, and the factoring process seems to be going as planned. Working capital is rolling in ahead of time, allowing you to keep up with payments on your day-day operations. However, the ability to feel in control of bill payment can often override the fact that you may well be paying too much for factoring, receiving slow service, and a mediocre customer experience.

Consider the fact that the federal government buys close to $100 billion worth of goods and services just from small businesses every year! It may be time to brush up on the skills required to win a contract from the federal government.