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Q and A on Factoring for CEOs of Small Businesses

CEOs of small but growing businesses can often solve their working capital challenges by entering into a factoring relationship, where they sell their accounts receivables to a factor.  Factoring is usually quicker and more readily available and flexible than small business lending. However, there are a lot of misconceptions and myths about factoring in the marketplace, some of them as a result of the practices of some bad apples in the industry. With that in mind, we decided to put together the Q and A below on factoring, because, to quote the late, great retailer Sy Syms, we believe that “an educated consumer is our best customer”.

  • How do you describe factoring to CEOs who have never heard of it?

Invoice Factoring is a cash flow management tool that can provide a business with a continuous source of operating capital from its accounts receivable, allowing a company to pay creditors promptly, meet payroll, maintain overhead expenses, pay taxes or simply relieve the financial burden experienced during rapid growth periods.

Invoice factoring works for businesses that sell products or services to other businesses that have to wait for payment (i.e., payment is not immediate, unlike through a credit card transaction). As opposed to waiting 30, 60 or 90 days for the actual invoice payment, factoring is the process of converting a company’s accounts receivable into instant working capital by selling invoices to a factoring company at a slight discount to the face value of the invoice. The factoring company pays the company (for example) 80% of the face amount of the invoice the day the invoice is “factored”, and then when the factor collects the invoice from the company’s customer some time later, the factor pays the remaining balance to the company, less the factoring fee.

  • What are common scenarios in which CEOs would be better served by working with a factor of accounts receivable than using equity or debt financing?

Equity financing is typically very expensive for the types of smaller businesses that use factoring solutions ($1-50 million in annual sales), where the equity investor usually seeks a large percentage of the company at a low valuation and a variety of control and reporting elements  from an entrepreneur who is running and building the company, day-to-day. You worked hard to build your business, and if you sell equity, you have now injected partner management issues into your very busy day.

In contrast to equity, factoring or debt capital is a relatively cheap solution.

Factoring is one form of debt financing for smaller businesses. Debt financing ranges from extremely expensive solutions like merchant cash advance, all the way to relatively cheap bank debt. Factoring, situated roughly in the middle of that range, has the advantage of offering flexibility and not locking the business into a solution as it grows. A smaller business can factor all of its receivables invoices or only a portion of them.

Most banks will only lend to companies with established and clean credit history. For many startup businesses or those in rapid growth mode, access to that channel is lengthy and often simply unavailable. Factors will work with newer businesses and those where the business or owner has background issues like tax liens or bankruptcies, or an operation that isn’t profitable – situations that cause real problems for banks to finance.

When making a funding decision, factors focus on the creditworthiness of a business’s  customers while banks will only focus on that business’s established credit history and cash flow. Additionally, since accounts receivable funding is not a loan, there is no debt on the  company’s balance sheet.

Best of all, factors can approve a company for funding in a week, while banks may take months to approve a loan.

Whether your smaller company is an information technology (IT) consulting shop, a manufacturer, importer, or a service provider to other businesses, selling your accounts receivable to a factor could be an excellent financing solution.

Successful factoring clients typically “graduate” at some point to cheaper bank financing.

  • What are some of the most common misconceptions CEOs have when it comes to factoring?

That factoring may alienate or jeopardize your sensitive relationships with your customers – good, professionally run factors will treat your customers with “kid gloves”, whether it is to confirm the validity of an invoice or notify them about payment. In fact, factors provide growing small businesses with a great service – beyond “just” advancing funds to its customers, factors become a quasi-back office for your company by handling aspects of bookkeeping, ledgering, collections, and credit guarantees, often gently assisting in putting order in a sometimes disorderly or understaffed process at a smaller, growing company. This benefit could be well worth the incremental cost of selecting a factor over a somewhat less expensive alternative for your capital.

  • What are a few questions CEOs should ask of themselves before factoring?

Are your customers slow payers or fast payers? The longer it takes for them to pay, the more expensive it is for your company. Is my profit margin vs. time to collect an invoice sufficient for the cost of factoring to make sense? Would my controller or receivables person benefit from the helpful “shadow back office” functions provided by factors?

  • Are there risks or downsides of factoring?

The industry has a number of undercapitalized and/or over-leveraged, “mom and pop” operators that may not be there when you need them the most. The scary thing about an overleveraged factor is that you (as their client) are relying upon the factor to fund you to meet your payroll every week. If that factor has a problem with one of its major clients, that factor’s bank may stop funding ALL of the factor’s clients immediately – including you. If that factor is not well-capitalized away from its bank line, your business can be imperiled through no fault of your own. We have seen this happen.

So the lesson is to find out who owns and backs your prospective factor, and look into their reputation with customers.

Again, cost can be an issue if your company has a good portion of receivables that pay late, especially over 90 days.

Some factors are less transparent than others, in terms of overall fees charged and reporting on your receivables. Make sure you understand all the fees. Make sure that your factor provide you full transparency into your invoice collections through web portal access into their accounting system or a comparable method, and that reconciliations are done frequently, preferably daily.
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We are always here at Plus Funding to answer your questions and help, whether you have $100,000 of receivables a month that you want to factor or $2 million.

Boomerang Clients

What is a “Boomerang Client” for a finance company, and is it a good thing?

We often hear about “boomerang kids” – children who graduate from college and move back home with their parents for a variety of reasons, instead of finding their own apartment. A kid boomeranging home on an open-ended basis is usually viewed as negative for all involved.

In contrast, Boomerang Clients are often a good thing. Boomerang Clients in our industry, simply put, are clients that graduated to a bank, but now, for a variety of reasons, want to come “home” to us, their prior working capital provider.

Recently, we had a beloved former client return to us from a two-year stint with a bank that was providing them less-expensive, but very rigid financing. Why were they coming home? Was it a good thing for them, for us?

With the benefit of our working capital financing and operational support, this client grew their business, sales, and systems over a two-year period. With a more seasoned track record, the client was then able to draw the attention of a local bank that was willing to give them a $500,000 revolving line of credit at an insanely low-interest rate. We were very supportive on exit and wished them the best of luck. After all, it is a successful relationship for us when a client grows and becomes stronger to the point that a bank will finance them.

Fast forward 18 months. We get a call from the former client. He now hates his bank and wants to come back to us. Last year his company had slower performance than the prior year, but he had a large pipeline of projects and needed working capital to finance it. Some anonymous credit risk officer in the bank saw the reduced sales and bottom line for 2016 and cut our client’s credit line in half — just like that, with no opportunity to explain why or how he was positioned for a better 2017.

We reviewed his plan for 2017 with him, his pipeline, his customers. Unlike us, banks do not get into the weeds of understanding the various aspects of our client’s operating expenses, every underlying customer and their payment behavior. With that level of intimate knowledge and understanding, we were able to see the promise, and how to provide a fair level of financing to allow 2017 to be a recovery year.

Were we more expensive than the bank? Yes. But our client’s calculus was that we are a genuine partner in his operations, not an adversary (as banks often become the second there is a hiccup or a change in policy or staff at the bank), and he would make a lot more money – and have lower blood pressure – if he came back to work with us instead.

We understand that sometimes things don’t always go as planned, whether your kids move back home or your new financing arrangement wasn’t what you thought it was. Our flexibility and dedication to our clients differentiates us from our competition – and makes it easy for clients to come home.

Creating Manufacturing Jobs, Hand-in-Hand with Local Government

 

PEI just returned from a trip to Texas that made me feel really good about what we do – helping businesses grow and creating good jobs that help families and communities, through a genuine public-private partnership.

An existing client of ours, a manufacturer of aviation fuel systems, was approached by the economic development board of a small Texas city. The idea was for our client to relocate or at least open an additional facility there. The Texas community was prepared to provide approximately $800,000 from a municipal development fund for our client to buy specialized equipment for a vacant factory that had been identified by the city, and the state was going to provide some job training money.

This company is blessed with a very significant sales backlog, ample purchase orders and account receivables, but even after all of this government aid, the company needed additional funds to help finish the buildout of the factory and pay for various minor immediate needs. In addition, once the operation was ready to start producing, the company needed additional working capital for payroll, raw materials and to otherwise permit it to grow into its order backlog.

Helping a client meet some of these needs would be difficult for most factoring firms and asset-based lenders, because most factoring firms this size are very highly leveraged, which means that they cannot deviate from their own lender’s risk formulas in order to temporarily help out their client. On the other hand, Plus Funding is part of a family office, so we are much better capitalized than many of our competitors, with a deeper reservoir of capital. Therefore, we can be more flexible to help our client meet its immediate needs through over-advance allowances, an incremental term loan and other financial tools. This is what we did in this case, and what we have done for numerous other manufacturing clients, subcontractors, and minority and small business government set-aside program vendors.

In three months this company has already hired twenty employees for their new Texas plant, and we fully expect that number to top one hundred workers by year-end. These are fair-pay industrial manufacturing jobs, and the workers, community and company are all appreciative for their new relationship with one another. And we appreciate the part we are able to play in this story.

During this hyperactive political season it is particularly fashionable for politicians, who have never created a job in their lives, to bash finance people of all stripes, not discriminating between good practices and the bad. Our money is not cheap like a bank’s – we must charge at higher rates in order to compensate us for the risk of dealing with smaller businesses (sales of $3 million to $30 million per year) with less collateral to offer as security, where there are higher default rates than in the broader economy. However, we take these risks on the prospect that, overall, we will make a fair return on our capital. In addition, when we commit capital and “make a bet” on every client relationship like this one,  we go in  with the hope that, someday, companies like this one will grow successfully and will “graduate” from us to a low cost bank facility. We will lose a good client that we liked working with, but we will be left with the happy memory that through our participation, we made a difference in the lives of a community.

 

Case Study: Signage Designer and Manufacturer for Major Construction Projects

Our purpose and challenge is to help smaller businesses responsibly grow by helping them manage their working capital needs and providing accounting and general business advice. Every company and industry is different, but one of our clients, a signage designer and manufacturer for major construction projects (“Signage Company”), encompasses a number of the qualities and attributes that drive us to come into work every morning.

Signage Company is owned by a husband and wife, immigrants to the United States. They have seven employees and have built their company from the ground up over the past five years, which produces specialized interior and exterior signs for everything from mass transit systems to universities and corporate headquarters. As a certified minority-owned entity, Signage Company has had the opportunity to bid and have been awarded some of New York’s most prestigious construction projects. Over the years, they have reinvested their own cash and taken credit card debt to purchase specialized equipment, piece by piece. Signage Company has developed a sterling reputation with contractors and architects for quality, timeliness, and reliability, and at any one time have at least several major projects on the shop floor, with more in contract. This company is everything to its owners, and the husband, the proprietor, has worked hard at getting better at running his business, taking business classes at night in a prestigious program designed to teach entrepreneurs marketing, finance and management skills for building a growing business.

Sounds great, right? Well, Signage Company faced several challenges when it was introduced to us by a smaller factor a couple of years ago. Basically, its customers, large multi-national construction companies and general contractors, all sterling credits in their own right, treat Signage Construction Company as their bank, stretching out payment of Signage Company’s receivables about as far as they can be stretched, sometimes upwards of 150-180 days. There is a lot of “bill and hold” to these long-lived receivables, where Signage Construction Company is ordered to produce signage for a major project, and then when it bills its client, the client says that it won’t be ready to receive the signage for another three months, and to hold the inventory, obviously aggravating the receivables aging problem. Signage Company is forced to go out of pocket, paying for materials and labor for major projects, and the situation is just aggravated further by carrying that cost for months at a time while waiting to collect and also trying to build to meet a growing order book.

Our solution has been a traditional factoring facility for billed receivables, coupled with a work in progress (“WIP”) revolving line of credit, where advances are made against raw materials and their completion rate, based on an escalating scale as completion is approached (remember, these signs are being produced per contract with very good credits – who simply do not pay for a long time). The discipline of this approach requires very close communication and cooperation between our firm and Signage Company, with verbal interaction just about every day not only on detail level matters, but also sharing our experiences from other clients and industries and perhaps bringing an idea or two to the proprietor that he hasn’t thought of, such as coding the invoices as items are partially completed, completed and shipped out the door so it is easier for both factor and Signage Company to track. Signage Company is able to monitor all lockbox and wire payments, and other reports such as accounts receivable aging, advance and disbursement status, etc. through our web portal, and know exactly where they stand. The transparency of both our funding process and receivables billing and collection has benefitted Signage Company, as its proprietor, who probably understands and monitors his business and its cash flows much better today than several years ago, is now better educated to price, take on and fund sustainable growth opportunities. This situation can be contrasted to that of a typical, quickly growing entrepreneur, signing contracts left and right, with no plan as to how to pay for it later — often resulting in a train wreck or very, very expensive capital solutions.

Bottom line, Signage Company has more than doubling its business in the past two years with less capital (and emotional) stress than would otherwise be the case when experiencing such aggressive growth in an industry with such slow performing lousy accounts receivables metrics.

There is nothing harder than building and growing a small business. We love to help our clients do it. It’s what gets us up in the morning.

 

Extending Credit to Customers

June 2014

Many firms face challenges when planning for growth. Researching finance opportunities that leverage invoicing and credit can help provide higher return on investment and free up valuable time. At some point, nearly every business finds themselves in a position with limited funds on hand. This situation can be difficult when facing unanticipated expenses and liabilities. Ensuring access to capital now, and putting better practices and processes in place, can mean success today and improved financial stability long term. At Plus Funding Group, our goal is to guide business owners towards success through invoice factoring and other methods to leverage revenue.

Extending credit through invoices is common, but may not be practical for every business. To decide if extending credit is right for your business, you must weigh the associated rewards and risks.

  • The option of credit enables customers to focus less on prices, enhances customer relations, and has the potential to generate more sales.
  • Extending credit costs money.
  • Selling on credit means the payment is not in hand and will need to temporarily recoup the cost from other areas of your operating capital.
  • If customers don’t pay, you could be in for a long settlement process.
  • Extending credit could be the factor that keeps your business afloat if it makes it easier for your customers to buy from you. Nevertheless, if it isn’t necessary it may not be worth the extra time and paperwork.

At Plus Funding Group, we understand the risks associated with extending credit to new customers. Our team is well versed in performing the due diligence to determine credit worthiness that can eliminate credit write offs and slow payment before it happens. Partnering with us gives you access to the tools and background data you need to make intelligent business decisions and carefully assess risk.

The Plus Funding Group offers quick, efficient, and professional services. Learn how our services can enhance your bottom line today.

 

Invoice Factoring 101

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Accounts receivable issues can be difficult for many companies to bear, especially smaller firms and startups.  In these trying financial times, chasing invoices can quickly become the full-time job for many business owners. When times are tough, payments can dry up, leaving your company without the vital lifeblood it needs to grow and thrive. Invoice factoring allows ambitious businesses to release cash flow still tied up in unpaid invoices – helping you to grow, even when cash-strapped clients have you waiting for payment.

What is invoice factoring?

Simply put, invoice factoring is a way for any business that sells products or services to other commercial vendors and then waits for payment to leverage their accounts receivables to work for them, not against them.  Rather than waiting for slow paying vendors, you can convert account receivables quickly by selling invoices to a factoring company for a nominal discount.

Invoice factoring is quite different from the traditional loan-based programs offered by banks.  Most banks base loans on credit history which can be difficult for small companies and startups.  With the Plus Funding programs, we focus on the credibility of your clients.

As opposed to a financial institution that can take several months to approve your loan, in most instances, Plus Funding can approve your company in a matter of days.  Additionally, a key benefit is that because invoice factoring programs are not loans, there will be no debt on your company’s balance sheet.

How can my company get started right away?

The steps involved in invoice factoring with Plus Funding are simple and clear:

  • Your customer (XYZ Co) requests goods/services from you.
  • You deliver these goods/services to XYZ Co.
  • You issue an invoice to XYZ Co.
  • You sell this invoice to Plus Funding.
  • Upon verification of the invoice (typically 1-2 days with a preexisting facility in place), Plus Funding will advance cash (typically 70-85%)
  • XYZ Co pays Plus Funding.
  • Upon receipt of the payment, Plus Funding releases the difference (reserve) between the collected amount and the advance, minus the factor’s discount fee.

For more detailed process, please visit Our Process page.

Our services are custom designed to fit each client’s specific needs.  Our fee structure is efficient and effective, many times as affordable as “early bird” or pre-pay discounts offered by many companies.  Our knowledgeable staff is friendly and courteous, helping you to enhance and maintain your working relationships with clients.

Invoice factoring can be a benefit to virtually and company.  Contact Plus Funding today and start leveraging your accounts receivable for growth and stability right away.

New Year’s Resolutions for Business Owners

We have all been told year-in-year about making New Year’s Resolutions. Giving up smoking, losing weight, eating your vegetables…all good stuff! But what about making some New Year’s Resolutions to better your business?

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What’s on your list of business resolutions for 2014?

Resolutions, if carefully thought over and properly planned, can be a powerful tool to boost your business in 2014. Let’s have a look at just a few resolutions you can make to get your business off to a flying start this year.

Get New Customers

Sometimes, we spend too much time looking after our existing customers; we look after their needs; we ensure that they are consistently happy and we are always looking for the next sale. However, we also sometimes forget that a percentage of customers will always drop off and before you know it, your customer numbers and sales are down.

Never forget that there is a new batch of clients out there who are desperate for your products, and all you have to do is ask for their business. So, to gear yourself up for a renewed campaign, think about these aspects of your business.

 

Take a fresh look at your advertising material. Does it look dated? Is it designed to attract new business? Do you do enough advertising?

Could you improve your networking skills? Find out if there is a business club or organization near you, and join! If there isn’t one nearby, form one on your own. It’s almost guaranteed that there are a great deal of like-minded business professionals near you who are seeking the same type of networking connection, and would happily participate. Get your business colleagues to a local meeting place and ask that they bring along one other business person from another organization to increase your networking diversity pool.

Ask your customers for referrals. If they’re satisfied with your service, then they should be more than happy to provide you with some introductions.

To help get started and give you direction, set a clear, achievable goal on how many new customers you are going to get each month.

Keep Your Existing Ones

In your quest to get more customers, don’t forget your existing ones. Yes, we did stress the importance of cooling off them and searching for new clients, but the key to success is balance. Resolve to call all your key customers at least once a quarter. You don’t have to try and get an order, just show that you have not forgotten them.

If you have recently launched a new product or service, have you told your existing customers? Are they totally up to date with your product range?

Think about introducing a loyalty bonus or gift. Reward those customers who have been with you for many years or have placed significant orders over the last year. Just say thank you for doing business with you.

Look at Your Expenses

2014 is looking to be a challenging year for businesses and a keen eye on your outgoings could help you. When did you last review your monthly expenses? Set a resolution to look at your overheads every month. Can you reduce your electricity bill or phone by either being more efficient or changing suppliers?

If you have a range of suppliers, have you recently re-negotiated terms? Are you still getting a good deal, or could you do better?

Resolve to look at your bank charges at least once a year. Does your bank offer you a competitive deal? What are their competitors offering? Also, check whether you are getting the best deal on all your insurance requirements. Go and see a broker, or spend some time online getting some quotes to compare.

Keep an Eye on the Cash

This year, resolve to keep a meticulous watch your cash flow. With a generally tightening of available credit in the market, you may find your larger customers squeezing you on payment dates. Make sure you get your invoices out on time and that overdue payments are promptly chased; the more latitude you give means less profits for you. If money is tight, consider purchase order financing, which is a short-term commercial finance option that provides capital to pay suppliers upfront so your company can avoid depleting your cash reserves. Growing your business should not be limited simply because of a few late-paying customers.

If you are facing a liquidity crisis, make sure you are making full use of credit terms offered by suppliers. Could you negotiate even more favorable terms? Even stretching the payments you have to make by two or three days could make a huge difference.

Remember, it’s cash, not just profit, that keeps your business going.

Have a Radical Re-Think

Are you hanging onto a slow-moving product from your business in hopes that it will “take off” next year? Rather than relying on a possible surge in sales, take the time to reassess your product and determine whether or not it’s worth the continuous effort to spend money on production despite seeing little return. Do you have suppliers who are constantly delivering late or have quality problems with their goods? If that’s the case, resolve to search for new suppliers to can deliver quality products on time.

Over the past year, have you been spending a lot of time chasing a potential new customer? You’ve paid for the lunches, paid for a night to the theatre, even nominated him to join your favorite club, but still no business. Is this year the time to accept that they may not do business just yet? Resolve not to waste your precious time and effort chasing no-hopers.

Focus on Growth

Business growth is at the top of the list for many, and invoice factoring is one of the easiest and quickest ways to do so without the need for a bank loan, since your own invoice accounts receivable are turned into cash. By accelerating your business’ cash flow, you provide your business with access to funds that would otherwise not be available during a “normal” billing cycle. Financing should never be a bottleneck to the growth and expansion of your business.

Commit to a Plan

If you have decided to take on one (or all)! Of these New Years resolutions, to give you focus and a goal to aim for, write them down. Prepare a plan listing all your resolutions and detailing the actions you have to take to achieve them all. Then, resolve to review your plan at least once a month.

PFG is here to help make 2014 your best year for business growth yet. Contact us to get started!

Photo Credit: creepyed via Photopin cc

Case Study: Purchase Order Financing

We would like to share a case study that showcases Plus Funding’s ability to help companies succeed and thrive from our factoring services. Plus Funding Group assisted a company that imports high-end women’s shoes.

Shoe manufacturing business growth purchase order financing
Thanks to purchase order financing, one company is now selling products at large-scale department stores like this!

When PFG began working with this company a year ago, they were making about $200,000 a season with $800,000 annually. The company sold their products on Amazon and some smaller boutiques, and used manufacturing plants in both Spain and China. The annual cost of production was around $120,000.

However, the company needed to pay 30% of their production cost up front in order for their producers to begin work. The other 70% was paid when the goods were ready to be shipped. These conditions meant that the company was required to pay the $120,000 production costs before they were even able to sell the shoes. Without some sort of financing options, this company would be tying up valuable cash in the form of inventory.

PFG made this company more liquid by providing purchase order financing. What PFG did for this company was provide the manufacturer with the 30% up front costs of the goods, and then gave the manufacturer the remaining 70% production costs that were needed to ship the shoes. This allowed the goods to reach the United States where they were then shipped to distribution centers and sold to customers. PFG then collected on the invoices from the customers on the behalf of this company.

Once the goods were shipped out, PFG did the necessary factoring on the company’s invoices and collected the monies from all of the company’s clients. This resulted in a gross profit of $80,000 that was collected, and these funds were sent back to the client company. Initially, the company had $200,000 in purchase order financing before they got started. They also needed the $120,000 in other costs such as production and freight to fulfill their purchase orders.

PFG initially financed the manufacturing costs to the factories, freight, etc. The whole process from purchase order to delivery was 60 days, and the whole production cycle from purchase order to finance was 120 days. In the meantime, the company was able to generate $80,000 (minus PFG’s fees, which were between $10,000 – $20,000) and essentially get their profit without putting down any money from their own profits.

Prior to PFG, this company was only able to handle small orders. After PFG’s help, the company is expected to make between $400,000 to $500,000 in business in the Spring 2014 season alone. Now that they have the financing that they needed, they are able to be more aggressive and go after bigger customers. This has caused a shift in the customer base and will allow this company to service larger clients like Nordstrom and Hautelook.

Net profit for this company has gone from $80,000 to $200,000. PFG still finances the whole production including the freight, with the time cycle remaining the same. This company now knows that they can finance their operation successfully and because of this are now driving growth. The only constraint to their growth will be based on sales and production. Financing should never become a bottleneck, which is why PFG is there to help businesses such as this one grow and thrive.

Photo Credit: JasonParis via Photopin cc

Your Growth Should Not be Constrained by Lack of Funding

A customer approaches you about placing a big purchase order. It’s the break you’ve been waiting for; but, it creates a major dilemma because the customer pays 30 days after the delivery of the product. It will be a while before you actually receive payment, yet you need the money now to pay for supplies, manufacturing and even freight. alternative business funding tips from plus funding groupThis problem is very common in start-up businesses and many fail to capitalize on opportunities due to a lack of capital. Never turn a customer or a purchase order away due to lack of financing.

Plus Funding Group offers an option that could help fund these large purchase orders. We provide purchase order financing in conjunction with our receivables funding program. By leveraging our financing programs, you can fund your production costs and fulfill your POs. Depending on your margins, you might even be eligible to fund up to 100% of the costs associated with these POs.

Purchase Order Financing Gives Your Business the Boost it Needs

Purchase order financing allows you to produce the goods required to fulfill a purchase order without worrying about the initial capital outlay. When a customer supplies you with a PO and you have identified the suppliers along with their costs, Plus Funding can step in and help fund these costs. Once the goods have been delivered, you can invoice them as you normally would. Plus Funding will help manage this invoice and will collect the remittance. Once the payment is received, Plus Funding will deduct their fee and remit the profits to you! With this funding ability, companies can focus on obtaining orders and leave the funding worries to Plus Funding.

The Simple Process of Purchase Order Financing 

Here’s how the purchase order funding process works:

1. Your customer places an order and sends you a purchase order.

2. Plus Funding Group pays your supplier so you have the products you need to fill the order.

3. Your supplier delivers everything you need to fill the order.

4. Once your customer accepts delivery of your product, you will invoice them; the customer will then remit payment to Plus Funding Group.

5. We collect a fee and send your profit right back to you.

Funding with Plus Funding Group enables you to focus on what matters most to you – your business.

Photo Credit: danielmoyle via Photopin cc

Getting Your Financial House in Order Before Year-End

While making smart decisions when it comes to your finances should be practiced year round, it’s also never too late to start.

Financial House Tips from Business Finance Experts
Getting your financial house in tip-top shape can be done in a matter of just a few steps!

With only a few months left to the end of the year, now is the time to get your financial house in order and make sure your financial future is bright. Here are 7 tips to help you make it happen.

1. Set aside savings. While no one wants to think about losing their job, it can happen to anyone and any time. Having cash set aside to ensure your financial security in between jobs will help alleviate some of the stress. The rule of thumb? Stash at least 3 to 6 months’ worth of income, but 9 months to a years’ worth is even better.

2. Control your credit cards. Just because you have a certain amount of credit available to you does not mean it’s OK to max it out. In fact, this is a poor practice that indicates you are a higher financial risk to creditors, and can negatively impact your credit score. Use only 30% of your credit limit each month, and try to pay off the balance in full if possible to show creditors you are financially responsible.

3. Track your spending. Knowing exactly where your money is going each month is not only empowering, but can also give your spending habits a tune-up. Tracking your spending for a month using a handy tool like Mint.com can be a tremendous help in determining where your money is really going, and making changes to your habits accordingly.

4. Read the fine print. If you are signing up for a free trial or service that requires your credit card information, make sure you understand the fine print first. It is very likely you will be billed on a recurring basis whether you are actually using it or not. Too often, people will sign up and forget their card information is on file, which could end up costing hundreds of dollars over the course of the year. Look back through your bank statements and cancel any recurring services that you are not using.

5. Pay bills on time. Bills can be daunting, but they must be paid. Open up your bills as soon as you get them and determine when you will pay them. Late fees add up, which ends up costing you even more money. Like removing a Band-Aid, the thought of paying bills can be painful at first but is a tremendous relief when it’s all done.
6. Make an emergency fund. Life is full of unexpected events, and we handle them best when we are prepared. Set aside at least 10% of your income to have handy at all times.

7. Create a list of financial goals. Take some time to think about what your financial goals are and write them down. These include both short-term, like saving for a vacation or car, and long-term, like saving for retirement. Determine what your financial goals are and the steps it will take to achieve them. The clearer your steps are, the easier it will be for you to follow them. Post your list in a place you frequent and check back each month to keep yourself in check.

Taking control over your finances is the best way to set yourself up for a lifetime of financial success. No matter how intimidating the process may seem, starting now is much better than not starting at all. This time next year, your financial house should be clean and clutter-free!

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