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Sign fabrication and installation companies get can get a wide range of project sizes. An associate I recently spoke with handles orders from $1000 to $60,000. A common problem for this gentleman’s business is when the projects on the higher …

Generally speaking a business owner can only control when they make payments IE their cash out-flows. To some degree they are at the mercy of their debtors for their cash inflow. However there is a way to gain control of …

The oil spill in the Gulf of Mexico has created huge demand for a wide array of resources needed to help in the cleanup process. There is probably no better example than MOP Environmental solutions Inc. They have a patented material used to clean up oil spills. Obviously MOP was going to see a large increase in demand for their product. However huge spikes in demand can create cash flow issues, especially when offering 30 day payment terms.

This is where Bibby Financial Services enters. They provided a $750,000 factoring faculty so that MOP would have the financial capability to complete orders and keep the clean up efforts going at full pace.

This is a prime example of how factoring can help a business’s cash flows.

Most Repossessors have the same problem; slow payment. The finance companies that employ recovery agents know better than anyone what delaying payment does to their finances. However, their cash flows are improved at the recovery agent’s expense. In response to this situation, recovery agents have employed a few different strategies.

First, and most obvious, is to sit on a solid cash reserve. This ensures that there are no cash flow deficiencies, and provides the ability to wait for payment. Sounds simple enough but in reality this is a luxurious position to be in. Not all businesses can build up that cash cushion and even the ones that can have to work hard to maintain it.

Another common strategy

I read a financing expert’s Blog post about his experience helping a client get funding. It provided a much needed reality check as to how financing availability is not static; rather it’s constantly changing and even financially strong, profitable businesses may find that funds are not as easy to get as they once were.

“I recently worked with a client seeking financing from their business where the business is well established, has an excellent balance sheet, and is very profitable. The Owners were experienced, established, and had a solid track record of performance.

So why were they looking for financing?

Their primary and only institutional lender could no longer underwrite the type of business they were in.

Small businesses are prone to getting strapped for cash. Although it is first instinct to look for sources of outside funding, looking within might provide a faster and more affective solution.

You might be thinking, ‘are you crazy? Where can I …

Factoring is has always been a reliable way for businesses to gain access to capital. However this is particularly true with businesses that have financially strong clients.

Here are a few examples of businesses that would likely be turned down by …

The current recession has created a bleak lending environment for businesses and new data suggests it is getting worse. Today Federal Reserve Chairmen Ben Bernanke said that “many “creditworthy” firms with “strong” cash flows are having trouble getting loans.” This statement was based on data showing that S.B.A. lending has seen a two-thirds drop in the month of June compared to May, to bring it to the lowest levels in decades. Bankers say this steep drop is due to the expiration of a bill that provided higher percentage guarantees of loans made through the S.B.A. program.

With the S.B.A. taking a big hit, business’s have increasingly turned to asset based lending as it is usually the only option left open to them.

Generally speaking, the biggest hurdle in financing a business is finding the money to get it started. The next big financial challenge for most businesses is finding an effective way to finance growth.

Growth can come in many different forms such as a new location, a bigger office, more equipment, more capacity, increased inventory, more staff, new products and/or services etc. Further, each business tends to be in a unique financial situation in terms of what different types of funding they can qualify for, which makes matching financing to growth requirements a complicated process.

Factoring is very different from “traditional” lending. For one, it is definitely more expensive. But with the expense comes added flexibility and services that other types of lending cannot match. So this leads to the question: When is it a good time to switch to other types of financing?

To answer this question the business must first look at what financing options they qualify for. If factoring is their only option then it can help increase business volumes while building credit history, both of which may help the business to later qualify for a different, perhaps more ideal form of funding.