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It is often said that factoring is an “off the balance sheet” form of financing, but what does that mean?

The term has relevance when compared to other forms of financing. More traditional financial tools issue debt in return for financing thus adding debt to the ‘liabilities’ section of the balance sheet. This affects the company’s debt to equity ratio, a key measurement of business risk, and can affect their ability to take on other forms of financing or even jeopardize their standing with current financiers.

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 …

Recent data shows that SBA lending in Southern California is up about 50% over the same period last year and dollar volume of these loans has nearly doubled. This appears to be good news for small business and supports the notion that the economic stimulus enacted in 2009 reached the right hands.

However this good news does not paint a complete picture.

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.

In an overly simplistic model, janitorial companies really only need two things; supplies and employees. Most of these supplies are durable goods and represent more of an upfront cost. The cost of labor is periodic and represents a large portion …

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

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 …

Purchase order financing is a unique form of financing that can be utilized very profitably. It essentially makes it possible to handle orders that otherwise would have not been financially possible or responsible to take on. This means that Purchase order financing or PO financing increases a businesses ability to make sales and thus make profits.

It also has positive affects on a business’s cash flows.

If you are a business owner and you’ve ever been in a cash crunch you know how stressful payday can be. Praying that customer pays in time to make payroll is no way to run a business. However there is …

After long negotiations your business finally makes a huge sale. You look forward to building a relationship with this large client. However there is one catch; they want 30 day terms.

This could potentially be troublesome for the finances of your …