Introduction to Business Accounts Receivable Financing Companies

For as long as there will be businesses who need money, there will always be accounts receivable financing companies competing for the business’ receivables.

Before I get into the three helpful receivable financing companies out there, let me shed some light on why there are so many companies offering factoring services out there. All businesses, no matter what kind or in what industry, need money to sustain day to day operations and grow.

While that will always be the case, it will also always be the case that money will remain the most scarce resource. It doesn’t grow on trees after all. It is because of that scarcity that business accounts receivable financing has become a widely offered practice.

If you want to know more about what is receivable financing, I suggest you read my article on that topic. In this article, I plan on writing about how factoring exactly works from the factoring company’s perspective.

How does the Accounts Receivable Financing process work?

As a business, you first have to put together a list of all the invoices that are owed to you by your customers and clients. Factoring companies typically require that these invoices are signed by the customer, along with some other customer information which depends on the factoring company’s guidelines.

This list is then sent to the factoring company, who conducts their own background checks on your customers to evaluate their risk. In other words, they are interested in the credit worthiness of your clients and customers.

Based on their research, they will either accept or deny your invoices. If they accept to take the invoices, they will decide what rate to charge you and how much money they can advance to you.

The company then goes through the individual invoices and notifies your customers that they have taken over the invoice. The notification informs your customers to pay them directly instead of paying your business.

It can take up to a week to get your advance (money) from the factoring company, although once a relationship is established it can take as less as 24 hours. Payments can be via paper check or direct deposit ACH which is a more common way of doing business now.

How much are you paid by the factoring company?

You will be paid the face amount (receivable balance) minus the discount rate, or the percentage that the company charges you for their services.

The first payment is usually up to 90% of what the company owes you, and once they collect from your customers, you will be paid the rest of the amount net of all the fees and charges. These fees are generally between 1% to 5%, though more commonly in the 3% to 4% range in my experience.

What are some good Receivable Financing Companies?

I can only speak from my experience based on the companies I have researched, tried and tested over the years. I have been an entrepreneur for a few years now, and I resorted to business accounts receivable financing first when I was denied loans by the banks and the SBA.

The following companies provided me with quality accounts receivable financing services when I first started out.

  • – JD Financial
  • – BTB Capital – Greg de Vries over at BTB knows this business inside out
  • – ACA – American Capital Advance

Why Business in Myanmar Is About to Change

Myanmar, also known as Burma, is a country in transition. Business in Myanmar is on the brink of sweeping changes that should usher in long overdue economic prosperity for the citizens of Myanmar.

For decades, Myanmar was tightly controlled by a military regime. During this time, western governments including the United States, the United Kingdom, and other European nations sanctioned Myanmar. With the exception of humanitarian aid for the starving population, western businesses were not allowed to do business in Myanmar.

However, after the 2010 elections in Myanmar, the new Myanmar president and other political leaders ushered in rapid radical reforms and the western world began to take notice. Political prisoners have been freed, the press is now allowed access, and earnest efforts in peace talks have been praised by many. It seems the new Myanmar government is really trying to help its own people and also cultivate business and political relationships with other countries.

In July 2012, President Obama declared that U.S. companies are now free to invest in Myanmar for the first time in 15 years. The UK followed suite soon after. The Myanmar parliament is in the process of passing new legislation that will supplant Myanmar’s existing 1988 investment law. The new law will reform greatly how Myanmar does business with international investors.

The first version of this bill was criticized as being too strict and it was thought by the Federation of Chambers of Commerce and Industry, Myanmar’s top business lobby group, that changes needed to be made. The Myanmar parliament has gone back to the drawing board and it is predicted the changes they are making will attract foreign investors in a big way.

One of the main changes is the original financial cap that was to be placed on foreign investment. Originally it was capped so high that small to medium sized foreign businesses would have been shut out. However, the cap has now been lowered to a level that they can participate.

The tax incentives to foreign businesses have also been increased and extended which will now make doing business in Myanmar much more attractive. In most cases, the tax incentives have been extended from three to five years.

Another primary source of contention in the original version of the new foreign investment law was the inclusion of 13 areas where foreign investment would be restricted. This was designed to protect the primary domestic businesses including agriculture, fishing, and textile manufacturing. However, these restrictions have now been made more lax and now allow for foreign businesses to enter into 50/50 partnerships with domestic Myanmar businesses in these restricted business categories.

The Myanmar Investment Commission will be in charge of regulating the new international business inside the country. They have been putting on a far friendlier face than they have had in the past to woo in the international investors. At the same time, the Myanmar parliament has given them more power in how they handle things. This includes the ability to revoke the tax incentives.

The new changes should have business in Myanmar booming over the next few decades.

A Marketing Plan For Small Business That Targets Your Customer Base

I believe everyone would agree that repeat customers define that delicate balance between a company that thrives and company that just gets by? How do you design a marketing plan for small business to work for the business? All too often small businesses look for ways to increase customer volume by looking at the traditional ways of advertising or marketing their business. In the context of promoting your business it is imperative that, as a business owner, that you think outside of box.

There has been a huge paradigm shift in the way businesses market to the masses to attract customers. With the advent of smart phones and the popularity of texting, a strategic marketing plan for small business can inflict about the same impact as a corporation with a large marketing budget. The difference is that businesses now are able target customers with pin-point laser accuracy with mobile marketing instead of blasting a message to the masses through some other form of media.

Mobile marketing is relatively new to the advertising scene, but it already has proven itself as an effective, viable low-cost marketing plan for small business. The potential of this medium is basically still in its infancy; however, the proven statistics it has already produced has made it one of the fastest growing industries in recent years. The applications that can be applied using this platform are almost limitless and is only limited by the person who uses it.

This is a fact… of the 97% of the texts that people receive on their phones, 83% of those are opened within one hour. Imagine the potential for a business that can harness this kind of exposure. For example, and I’ll use round numbers for simplicity…If you have a customer base of 1000, and historically Wednesdays are a slow day for your business, inside of a few minutes you can text a special promotion for a Wednesday to your customer base and within one hour nearly 845 of your existing customers will have read that promotion. No other marketing plan for small business advertising platform can perform that quickly when YOU want it too.

I know there are some business owners reading this right now trying calculate in their head what this type of targeted advertising will cost and affect their bottom line. When you implement this marketing plan for small business you can eliminate those mass-mailing coupons, flyers and other promotional activities that “nickel and dime” your business’ bottom line to death. 100% of those materials end up in the landfill anyways. Nationwide, businesses are utilizing this marketing plan for small business that target their customer base with laser accuracy for a lot less than what you would pay for a tank of gas per month.