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Invoice Factoring – What Is It And What Are The Benefits?
by: Alan Jason Smith
Are you a business owner who wants to increase monthly cash flow, working capitol, and improve your credit rating? Then invoice factoring could be right for you.

Invoice factoring is the process by which businesses sell their invoices to a third party, called a “factor.” The factor buys the invoices for about 3 to 5 percent less than the invoice is actually worth. If your business produces any type of invoice, then your business can take advantage of invoice factoring.

Once the factor purchases the invoice, then the factor owns it, and collects the debt from your client. As the business owner, you get to decide which invoices to factor, based on your customers’ credit and payment history with your business.

Factoring your invoices means your cash flow does not suffer while you wait for your customers to pay. The factor buys the customers’ debt, improving your working capitol and the credit rating of your business.

It works like this: You send an invoice to your customer. Then you inform your invoice factoring company that you have sent the invoice, and in what amount. Usually, that can be done by e-mail, so it’s quick and easy.

The second step is the factor confirms the invoice with your client. Usually, this is done in such a way that the customer or client does not know that you have sold their invoice to a third party. The factor will identify itself as a billing department or company, rather than an invoice factor, and will simply call or send a letter to confirm the invoice.

Some invoice factoring companies are willing to keep the factoring completely invisible to your customers. And after you develop a history and good relationship with the factor, they will usually stop confirming every single invoice.

Once the factor has confirmed the invoice, they pay your business a percentage of the total amount of the invoice, usually around 70 to 85 percent. This is called the “advance rate,” and it is one of the primary points to look at when selecting a factoring company. When the factor collects the invoice from your customer, you will get the rest of the money you are owed.

Factoring benefits businesses that have poor credit history, no credit history, or limited hard assets. Factoring also helps businesses when they are just starting out, because it can often take time to build up steady cash flow.

Additionally, invoice factoring allows you to increase working capitol without taking liens against your other collateral, so there is little risk to you.

As a business owner you know how frustrating it is when waiting for your customers to pay. Even if your invoices are not past due at all, it can still take weeks to collect the funds you need to put back into your business immediately. Invoice factoring can help your business grow and reduce your own stress level.

About the author:
Alan Jason Smith is the owner of http://www.videofactoring.comwhich is a great place to find factoring links, resources and articles. For more information go to: http://www.videofactoring.com


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Debt Relief

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 Debt Relief From Debt Consolidation
 by: Jakob Jelling

If you are up to your neck in debt, there may seem like there is no relief in sight. In fact this is not necessarily the truth. There are ways to take all of your stifling bills and roll them up into one neat package by using debt consolidation in two very popular forms Home Equity Loans, Refinancing Loans, and a Consolidation Credit Card. All of these instruments provide the debtor with one thing “relief” from the current debt by shrinking it down to a single manageable debt.

Using home equity to consolidate debts

One of the popular methods of debt consolidation today is the Home Equity Loan. What happens is that the debt is extinguished using the equity from a homeowner’s home. A loan is created outside of the mortgage in order to satisfy the debts. Should the homeowner default on the loan, their house is in jeopardy of being foreclosed upon if that loan is not satisfied with a specified amount of time.

Refinancing loans

People often consume the debt by rolling it into a new mortgage. This way the house costs more money to the borrower, but the debt is extinguished at close and the debt is neatly rolled away into the mortgage securely. Upon settlement of the loan, the debts are paid in full and satisfied. The clock on the mortgage is reset to day one.

Credit card consolidation

A low interest credit card is offered to the borrower to include any outstanding credit and loan balances. The interest rate is a low fixed rate for a period of up to one year, upon the year’s end it will resume at its normal rate. Upon acceptance and terms the account should be closed once paid in full and payments be made directly to the new credit card provider. Some people have been able to master paying off one credit card with another to keep the debt revolving and interest rates low. Some people fail to close out the previous creditors account and run them back up again as well.

All three of these options provide solid relief for the debt and help them reconstruct and manage their debt better.

By Jakob Jelling
http://www.cashbazar.com


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