The History of Invoice Factoring
Invoice factoring is one of the most important financing options for businesses. It has been around since the 1930s and is still a popular method of short-term debt finance. If you’re considering how much to borrow and when, here are some things to consider before signing up with an invoice factoring company.
If you have trouble with invoices stacking up, or if your business needs funds quickly, then this type of financing may be for you. However, there are several factors that need careful consideration before engaging such a service because this option does come with some risks attached to them.
In its modern incarnation, invoice factoring is exactly what it sounds like: the opposite of a merchant account. You put your invoices up for sale to a second party – an invoice seller – who then buys them and pays you on collection. In most cases, this second party is a finance company or a bank. The business owner takes out a personal line of credit with the invoice seller to pay off their balances quickly while still being able to retain the business’s intellectual property (IP).
The process works best when there are extended periods between invoices, meaning that they don’t have to be paid immediately. If you need £200,000 right now, then you’re probably not very good at running a business. Your business is only capable of handling that amount of funding when it is consistently collecting large invoices at steady intervals.
The risks are the same as the benefits: a longer-term approach to financing means that more liabilities are present on your books, but can be offset by less cash in the bank and lower interest rates. The best way to approach this type of factoring is with clear visibility as to what your business needs and expects from its finances in six months’ time.
Invoice factoring isn’t just for businesses with solid cash flow. If you’re just starting out and you don’t have any revenue to speak of, but do have a good idea of what you’re going to sell in the future, then it makes sense to explore this option. The more money available, the better your chances are of getting funded.
Another benefit is that the invoice seller is able to offer a very competitive rate of interest for your invoices, often as low as 1% (for all volume sizes). This can help you get funding at a lower cost than if traditional financing options were to be used. But it isn't always straightforward finding an invoice factoring company that will work with your business model.
This is probably the biggest disadvantage of getting an invoice factoring service, in that it can be hard to find a company that doesn’t require you to have a certain amount of history before they will consider working with you. However, if your business has been around for at least a year or two and has good cash flow forecasts then this shouldn’t be too much of an issue.
It is also important to remember that if one invoice factoring provider turns you down, there are many others available which can offer the same service. The potential benefits always far outweigh any risks involved.
Invoice factoring is a great short-term solution for business funding, even for small and medium sized companies. If you’re looking to borrow money, or if you need some quick cash that doesn’t require you to give up your precious intellectual property, then this type of financing may be the best option for you.
Also, a lot of invoice factoring companies are now running media campaigns on TV, radio and internet marketing channels like Google and Facebook to get more people aware with their service they can also request free quotes over the phone.
Article continued here: http://www.4secondloan.com/the-history-of-invoice-factoring/
Article and case study completed by: www.4secondloan.com - UK Small Business Loans
Article and case study completed by: www.4secondloan.com - UK Small Business Loans
Article and case study completed by: www.4secondloan.com - UK Small Business Loans
Article and case study completed by: www.4secondloan.com - UK Small Business Loans
Article and case study completed by: www.4secondloan.com - UK Small Business Loans
Article and case study completed by: www.4secondloan.com - UK Small Business Loans
Article and case study completed by: www.4secondloan.com - UK Small Business Loans
Article and case study completed by: www.4secondloan.com - UK Small Business Loans
Article and case study completed by: www.4secondloan.com - UK Small Business Loans
Invoice-fraud is an increasingly common problem online, where a scammer pretends to be a dealer who has not yet received payment for an item sold on an auction website, such as eBay, or online marketplace like Alibaba or Craigslist. The scammer asks the seller to send funds by check or wire transfer before actually receiving payment from the buyer.
A typical scenario could involve a scammer posting an ad online with a link to a phony email address, and offering to sell speakers or other electronics. The seller sends funds, but never receives payment. The seller is then asked to send additional funds as part of some returns process, or because of damage or some other issue they are told has arisen.. But then they are told that the original buyer still refuses to pay, or demands reimbursement for sending money several times in error. Finally, the scammer stops communicating entirely with the seller and disappears with all of the money.
Conclusion:
"Invoice fraud is a growing problem, particularly in online marketplaces. The best solution is to ensure you are sending money to the legitimate business and not someone impersonating them."
In some cases fraudsters are using false requests for payment for the sale of goods. They send out emails claiming to be from a company’s bank that includes a fake invoice as an attachment. The email states that the sender has sent too much money, and requests that the difference is wired back urgently.
BYOD – Workplace mobility refers to employees bringing their own devices (laptops, tablets, etc.) into work and connecting them to corporate networks.