Factoring; the key solution that many business are missing…

Liquid Capital will be hosting the next Coffee Grind on Friday July 13th from 10:30-11:30 AM. Stop by to meet the team, enjoy some refreshments and ask any business or funding questions!

 

Factoring, also known as Accounts Receivable financing, is a brilliant solution that can be underestimated by business owners. For many of them, factoring is just a last resource solution, but they are certainly missing out.

Last year, business owners worldwide used factoring solutions worth over 3 trillion dollars, from which 64% were facilities issued in Europe. North America accounted for just 4% of that amount, and most of that occurred in the United States.

Why are Canadian companies missing out on factoring?  The only explanation is prejudice and misinformation. In the modern days of fake news,  factoring is one of its victims. Often times factoring is seen as a last resort solution for their business, but the truth is,  if you are a business owner doing factoring, you are effectively and proactively taking measures to ensuring a healthy cash flow for your company. Most customers today expect that you offer generous terms for paying invoices, and the fact is, unless you are in the banking business, you need to focus your time and efforts on increasing your sales in the most effective way, instead of acting as a bank for your customers.

But what is factoring? It is no more than allowing your business to access the funds tied up in accounts receivables, and using them to your advantage. The factoring company will purchase your invoices and advance payment so that you will faster have access to the proceeds from your sales. That way you have the working capital to pay for your inventory, payroll, and all other expenses that can’t wait to get paid.

Savvy business owners could benefit more from factoring than from a traditional bank line of credit.  Factoring is a very quick and reliable solution to fast growth.  A company such as Liquid Capital, can approve your line of credit very fast, without any covenants, and can give you the possibility to borrow only when you need it. You can draw funds according to your company’s growth. Yes, you understood right, your credit limit will grow parallel to your sales. This can give your company the cash it needs, when you need it, and you could even use it to take advantage of supplier discounts, and shorten your cash cycle.

In addition to all these advantages,  factoring companies, such as Liquid Capital, will take over the collections and management of your accounts receivable, a task that may represent a headcount for your company, or if you are doing it yourself, it will free up time that you can use to grow your business.  Liquid Capital would even perform credit checks on your customers, serving as your credit department, so that you avoid the risk of non-paying customers. In fact, having a factoring facility with Liquid Capital will come hand and hand with credit insurance, which will protect you against non-payment from your customers. In addition to that, factoring is not considered credit, freeing your balance sheet from liabilities and improving the way your books look.

Businesses that qualify for factoring are generally B2B companies that have outstanding sales to dependable, credit-worthy customers. They usually invoice their clients on credit terms and have strong sales opportunities in the pipeline.

Still have doubts if factoring is for you? Feel free to contact Liquid Capital Directly at lrizopulos@liquidcapitalcorp.com, or call at 647 330 0331 for assistance!


Why choose Liquid Capital?

  • North America’s leading factoring specialists
  • We offer a customized, flexible approach with local decision-makers ready to respond quickly with funding
  • Our Liquid Capital Principals are growth strategy and funding experts.
  • Credit coverage can be included to reduce risk, time and overhead expenses
  • Funding is not dependent on your balance sheet, or time-in-business
  • Our 24-hour online reporting system gives you full access to funding status 24-7
  • No long-term contracts, hidden fees or debt
  • Keep in mind: Not all factoring entities are the same. Many are not transparent, having hidden triggers for higher rates, or contracts that make it hard to move away from a funding solution. That’s not us. Our terms are straightforward. We have built our business on building relationships fueled by trust, understanding, and capability. We are proud when our clients evolve into traditional funding relationships with banks.

 

 

Want free advice? Liquid Capital will be hosting the next Coffee Grind on Friday July 13th from 10:30-11:30 AM. Come stop by to meet the team, enjoy some refreshments and ask Liquid Capital any business or funding questions!