Dewell Marketing

A lot of the readers of this blog are small business owners who face many of the same problems all small businesses face. One of the biggest, I’m sure you’ll agree, is financing.

There are some 25 million small businesses in the US alone and although they are the job engine of the economy, they “don’t get no respect” when it comes to getting money to operate their businesses.

When bank credit isn’t possible or lines of credit are already max-ed out, many owners turn to friends or relatives or to their own personal lines of credit. But, there is obviously a limit to that. That also means a limit to the ability to expand and grow the business; to take it to the next level.

So when the banks say, “NO!” and all your other sources are dried up, what can you do? No, quit is not the answer. It is easier and better than that. It is something called accounts receivable factoring, a financing method that is over 4,000 years old.

Your accounts receivables are primarily your invoices: money owed to you by other companies who are your customers. You may be offering 30 day terms to most of your customers, or you may have to offer that, or better, to larger customers or government agencies. You know they are good for the money, but you can’t make payroll or pay your lease on the promise to pay.

However, if your customer is credit worthy and has a good payment track record with you and other suppliers, a factor will offer to take over collection of your invoices for you and pay you an advance. Presto – you have positive cash flow again!

I’ll go into more detail in another post and give you a place to go to get some really good, detailed information on factoring and how it can help you.