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What Is Factoring Receivables For Small Business

Although one of the oldest forms of funding for businesses, many small business owners, entrepreneurs and startup companies still may be wondering what is factoring receivables and how can it help business. If you are one of these business owners, understanding what is factoring receivables will help you to see how it can apply to your business. In reality, this is a form of an advance on your invoices. As it is an advance and not a loan, there is no interest and you will be aware of the fees and costs for this service in advance, allowing you to compare factors and determine the best services for your small business. The Basics to Consider All factoring services work in a similar fashion. A small business will apply to factor some or all of the accounts receivables. Some factors may require a minimum volume of accounts and some require a long-term commitment of six months to a year. Other factors may offer greater flexibility, use as you need agreements, and no minimum volume of accounts receivable necessary. For most small businesses, this will be the best option. The factor will advance approximately 80% of the value of the accounts you choose to sell. This money will be in your account in just days from the application. Then, the factor assumes responsibility for payment of those accounts, freeing up our office staff. Once your customer pays the invoices in full, the factor deducts fees and costs and forwards any residual that remains from the 20% held. Some factors charge only a flat fee while others will include hidden fees and costs that can really add up. Knowing what factoring receivables is will be helpful, but knowing what the costs are for the service is just as important. Look for competitive rates and no extra fees or costs for the best value for your business. Be the first to like. Like...

It’s possible to find a truly free checking account

It’s possible to find a truly free checking account When you are keen to manage your money and want to open a checking account, you will want to shop around and compare what various banks are offering. This is often not easy as the policies of the various banks and the fees being charged are often not in a format that’s easy to understand. Further, many larger institutions no longer offer a truly free checking account in Knoxville TN. As a result, you can sometimes not see where you’d get true value. However, if you’re trying to make sense of it all, there are certain questions that you should be sure to ask. What to consider when looking for a free checking account in Knoxville The most important question will probably be whether you’ll be able to avoid a monthly service fee. When you’re trying to build up savings, it can make a big difference when there’s a chunk of money in charges every month, even when there has been almost no activity on your account. You can find checking accounts that don’t charge fees, but there are likely to be conditions. You’ll probably find that you need to deposit a specific amount of money and will need to maintain a certain balance. There are other fees that might be involved, such as for electronic banking, so you would need to look at these areas as well. Free checking accounts are also available that don’t demand a minimum balance. While every bank will have different guidelines, you might be able to achieve this if you arrange to have your monthly paycheck deposited directly into your account. Alternatively, you might have another account at the bank for savings or a money market account, and this will qualify you for free checking services. What about other services? When choosing a bank, you might also look at the number of ATMs available and whether they are located conveniently for you. If you use the ATMs from other banks, would you be charged for these services? These fees might add up and influence your decision as to which bank to open an account with. Community Banks offer free checking accounts, and all the details of this service are available on their website. Be the first to like. Like...

You Shouldn’t Have to Wait for Your Money

You Shouldn’t Have to Wait for Your Money It’ early in the week and the air conditioning in your home is not working. You call out the HVAC service and learn it’s going to cost $350 to get it fixed. However, there’s only one problem, you don’t get paid for another week and two days. What can you do? You may have several options but you need money fast and you don’t have a lot of time to wait, because it is terribly hot outside. This could be a good time to consider instant online payday loans and here are several reasons why. What is a Payday Loan? This kind of loan is sometimes referred to as a “cash advance” loan. You borrow the money and repay it with your next paycheck. The process is very fast and simple, because it’s taken care of online and in the comfort of your home. You may need to fax in a signature or proof of employment but this can be done from home or from one of many local copying services. Applying for instant online payday loans is very simple and all you have to do is fill out an online form with the required information. This should only take a few minutes of your time and you can usually receive a response with an hour or so, depending on when you apply. Getting your money is very convenient because it is direct deposited into your checking account. This is why the system is so fast. In fact, you can usually have your money by the next business day. You do not have to go anywhere or wait for a check to arrive in the mail. Plus, there is no need to wait for days until a check clears the bank, because there are no checks. Qualifying for a loan is not very difficult and most people should have no problems. You only need to have a job for six months ($1500 monthly income or more), checking account with direct deposit, be 18 years of age and a work telephone number. That is about all you need to qualify. No Credit Checks One of the best things about instant online payday loans is there are no credit checks. Maybe you have filed for bankruptcy recently. You might have lost a home in foreclosure or had several late payments with creditors. None of this matters because your lender is not interested in your past credit history. You can have the...

Short Term Loan Rates

Short Term Loan Rates A short term loan is often referred to as a payday loan or cash advance. Loans of this nature are usually quite small, often less than $500.00 and are structured to be repaid on the borrowers next payday. These types of loans have three basic features; they are for small amounts of money, the loans become due on the next payday of the borrower and the borrower must provide the lender with direct access to his or her checking account or to give the lender a post dated check in the full amount that the lender can cash if warranted. Other loan features, including short term loan rates can vary. Most loans are structured so that the amount borrowed plus the fee is paid off in one payment on the borrowers next payday. There are however other payments which include interest-only or roll-overs or renewals. Depending on the situation these types of loans can be structured in such a way that the debt can be repaid over a period of time through installments. Once the terms of the loan have been agreed the lender can provide the borrower with a check in the agreed upon amount or cash. With the advent of modern technology, the lender also may elect to provide the borrower with a debit card which has been loaded with the amount borrowed or the money may be deposited directly to the borrower’s checking account electronically. The short term loan rates vary; in some jurisdictions it may be as low as $10.00 per $100.00 borrowed while in other jurisdictions it may be as high as $30.00 per $100.00; a $15.00 fee is typical. There are certain factors that enter into how much can be borrowed and the amount of the fees. Taking the typical fee of $15.00 per $100.00 borrowed, if you were to borrow $300.00 until your next payday you will be required to repay $345.00. In the event you do not repay the loan as agreed the lender may charge a late fee, in the event the check that was issued when the loan was granted is returned NSF there may also be a returned check fee. These additional fees are governed by state laws, most of which are a little different. The wise borrower will know exactly how the electronic fund transfer is set-up to work. If the arrangement is to allow the lender to direct debit your checking account you need to know...

Factored Accounts Receivable- What Are They?

For up and coming businesses, making sure that they keep liquid assets is very important. To keep themselves competitive, many businesses offer sales on credit to their customers. In accounting terms, these customers become the company’s debtors. An Accounts Receivable account is created, which records all of the debtors of the company. While an income is generated on every credit sale, there is no cash flow until the customer pays for his goods. This can be troublesome for a small business, as cash flow becomes an important part of the working capital. While larger companies can sell millions on credit (they can afford to), smaller businesses must maintain as much as liquidity as possible. This is why they may opt for factored accounts receivable services. What Is This Service About? The Accounts Receivable/Debtors account of every company is the account in which a list of all the debtors is maintained. At every quarter, the account is closed, and at the end of the year, the closing balance is published in financial statements. For investors, a high figure in the accounts receivable can be alarming; it shows that the business isn’t generating a lot of cash flow. This in turn affects the working capital of the company, affecting day-to-day operations. By opting for factored accounts receivable services, a company sells its list of debtors and gets financing for it. It is a type of asset financing in which a funding company provides an immediate injection of cash to the company. The funding company uses the receivables of the company as collateral in the transaction. Compared to the value of the factored accounts receivable, the amount of money received by the company is lesser. How Does Factoring Work? If a company has a closing balance of $100,000 in its accounts receivables account, they may get anywhere between 80% and 85% of that amount from a factoring company. The receivables pledged and the amount received is never the same because the financing company now assumes the risk of collection of the factored accounts receivable account. Usually, a financing company analyzes different aspects before providing an accurate rate of exchange. One major point of consideration is the age of the receivables. For instance, if a company has receivables which are a year older, it is likely that a provision for doubtful debts has already been created against them. This indicates that the company does not expect to recover the money itself. Thus, if...

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