Invoice Factoring and other Cash Flow Notes


Types of Funding
Over the years the cash flow industry has grown to include up to 60 different "income streams" that can be sold by their owners. Some of the more common income streams include factoring, purchase order funding, real estate notes, and equipment leasing; continue below to learn more.


Invoice Factoring
If you are a small businessman and you are sending out invoices which are due in 30 days but your customers take up to 30, 60, or 90 days to pay you, then factoring, also referred to as accounts receivable financing, is the answer to your cash flow problems. Factoring allows you to leverage your large invoices to gain immediate access to cash. If you are a rapidly growing company you may have a large amount of money in receivables that you can't tap from a traditional lender. In fact, fast growth creates an inordinate need for working capital. With the economy slowing, banks are curtailing lending and, when they do that, small businesses are always the first to get hurt.


Through the process of factoring (receivables-funding) you may sell your receivables to a funding source (a Factor, there are many invoice factoring companies to chose between). Typically the factoring company will advance you 70% to 80% of your total amount and retain 20% to 30% in reserve. When the Factor collects on the receivables he will reimburse the reserve amount minus his fee which is typically 3% to 5%. You can see that after the first month you will be virtually running a C.O.D. business.


Purchase Order Funding
If you have a large purchase order from a credit-worthy customer and you find yourself in a cash flow situation where you cannot purchase the raw material or services to fill that order you can arrange for a funding source to advance you a portion (typically around 70%) of the amount on the order. The funding source will keep the remaining percentage in reserve and when the order is filled and paid for the reserve portion will be reimbursed to you minus the service fee.


Real Estate Notes
(Privately-owned mortgages, Mobile home notes)


If you have sold a property, whether it is a private residence or a business and you are holding the first mortgage and you are collecting payments, you have a Privately-Owned Mortgage. You know that if that mortgage is, say for 20 years, that the money you will have in 20 years will not have the value of today's dollar. Maybe you need money now for something you need such as a down-payment on a home or you might need the money to fulfill a desire such as a vacation, to build a swimming pool, or to pay for that dream wedding. OR, you may just be tired of waiting for those monthly payments. You can arrange to sell real estate notes on the secondary market.


Equipment Leasing
If your company is in need of certain equipment such as office equipment, construction equipment, company vehicles or any other type of equipment you should call us. A funding source can buy that equipment to your specifications and have it shipped and installed and then lease that equipment to you. This type of service enables you to have state- of-the-art equipment at all times. It also allows you to write off the lease payments on your income tax instead of having to take depreciation on your durable equipment. This can even be done with medical equipment.


Structured Settlements
You have been injured due to the negligence of someone else. You hire a lawyer and you win your personal injury claim. Your agreements makes payments over time in exchange for a release of liability. Unfortunately, since structured settlement payments are rigid, inflexible plans, they often fail their intended purposes, particularly in cases where the individuals receiving the payments are struck with a financial emergency. Liquidating a portion of a structured settlement is sometimes the only solution to a critical problem.


Other Income Streams: