Small Business and Factoring News from Charter Capital

News and information for small to mid-size businesses, startups and entrepreneurs. Find helpful business financing information, news and resources for small business management, business finance and marketing.

Factoring Without the Fear

Big Companies Are Slowing Supplier Payments

Economy Recovering – Bank Loans Still Scarce

The Credit Crunch is Still On

An Optimistic Future for Small Business

In Tough Times, Innovation Can Fuel Small Businesses Growth

Finance Growth without a Loan

Sales Down? Stop Blaming the Economy and Increase Profits

Improving Cash Flow in Tough Times

Forbes.com Article Endorses Factoring

Survey: 2009 Expected to be Rough For Entrepreneurs

Factoring: The Small Business Loan Alternative

Survival Instincts: American Small Businesses Doing What It Takes

Solutions for Small Business Bankers

American Banker: "Mood Edges Upward for Small Business"

The New York Times: "Worried Banks Sharply Reduce Business Loans"

Weathering the Storm: Banks Continue to Tighten Amid Losses

Small Business Optimism

Marketing in a Slow Economy

Small-Business Confidence Index Down in Q1

Small Businesses Can Face Economic Downturns With Confidence

What to Tell Your Clients When You Decide to Use Factoring

"Discover Small Business Index Up in February"

"Smaller Lenders Feeling Squeeze Of Credit Crunch"

Raising Capital- If You Want To Raise Cash, Try Factoring

Small Business Emerges as Trouble Spot for Bank of America

Live Your Dream

Do You Have An Alternative If Your Lender Becomes Uncomfortable With Your Credit?

Bounce Back - Entrepreneur Magazine

Small Businesses Optimistic on Future Revenue and Profits but Concerned About Rising Costs of Energy, Healthcare and Taxes

Financing factor: Selling receivables can smooth cash flow woes

Measuring the Economic Confidence of Small Business Owners

Beating The Cash Crunch - How to take control of your cash flow

What is Business Factoring?

There are many ways to maintain a positive cash flow when growing your business and dealing with accounts receivable issues. One popular way to increase cash flow is a form if business financing called factoring. Accounts Receivable Factoring (also known as Business Factoring) is the practice of selling your accounts receivable (invoices) at a discount to a factoring company. You get the money from the factoring company that you sold your accounts receivable to and they become responsible for collecting on the invoices.

The reason many companies decide on this type of business financing is to ensure the continuous cash flow to the business. Essentially, companies  who use factoring as their business financing choice are focusing on having most of the money now rather than all of it later. It can take time to collect on an invoice, so when a company finances its accounts receivable, they are getting their money faster and without the hassle of the collection process.

With small businesses, it is even more important to free up working capital through accounts receivable factoring. The money can be invested into new equipment, used to pay bills, or used toward payroll. Of course, the alternative is to chase the customer for the invoice payment and defer everything else while the money is tied up in the collection process.

In order to fully understand factoring, you should be familiar with the service: You may consider the following ideas so that you may have a better understanding of factoring. It could be best option for your business.

Is Business Factoring a type of Loan?

No. Even though business factoring is commonly referred to as a “ factoring loan”, it is a financial transaction between the business seeking funds and the factoring company, but no bank. Accounts Receivable Financing (Business Factoring) is when a company, like Charter Capital, purchases your accounts receivable invoices at a discount and provides you with immediate cash.
Compare Factoring vs. Bank Loan

Business Factoring is a little known alternative to a loan or business credit line.

As a no-loan alternative source of business financing, business factoring eliminates many of the difficult-to-meet criteria of a traditional bank loan. Even if you can get a loan or line of credit in today's tight banking market, what are you going to do after you've spent those funds? You are still going to be waiting for the invoices to be paid. The biggest problem with a traditional bank loan is that there is a maximum credit limit. Whereas Charter Capital provides no-loan cash based on the quality and liquidity of your assets (your accounts receivable). Because each account is evaluated individually, Charter Capital has much more flexibility than a Bank when it comes to keeping up with an increase in sales.