Why Would a Small Business Use Factoring Services?

Posted by on March 5, 2017 in | Comments Off on Why Would a Small Business Use Factoring Services?

­Why SMBs Use Factoring Companies for Funding Working Capital and Increasing Cash Flow When your small business or mid-sized company needs working capital with flexibility or fast financing, factoring companies provide needed cash flow. A factoring company takes on the burden of waiting for accounts receivable invoice payments and in return provides your business with a timely cash advance. This receivable financing, also known as invoice factoring, is a flexible and fast financing alternative to traditional bank business loans. Factoring is when an accounts receivable invoice is essentially sold at a discount by your business to a factoring company, referred to as a “factor.” Banks traditionally require a burdensome approval process to loan money. That loan will bear interest at market-driven interest rates and results in debt for a business. Yet, a reputable factor starts approval within 24 hours and provides funding same-day or up to ten days for a new client without subjecting your business to the volatility of banking interest rates and avoiding debt on your company’s books. How do Companies Benefit from Long-Term Factoring? Companies that often benefit from long-term factoring financing include those that usually face business scenarios, such as: funding required to maintain substantial inventory or materials for production, long-duration sales cycles, volatile cash flow, slow paying customers, such as, large corporate buyers or government agencies, or seasonal sales. Factoring fuels your business growth when your company is presented with opportunities, such as: unanticipated or urgent customer demand for products or services, timely opportunities to expand into emerging markets, innovations that present a chance to invest in new technology and equipment, and options to expand offices, production workspace, or inventory warehousing. When a company faces short-term risk jeopardizing business operations due to  a cash flow crunch, factoring is a remedy for: operating losses, payroll funding needs, maxed out lines of credit, or bank turn-downs. Factoring also supports the strength of your company with cash liquidity when your business goals are to: obtain immediate cash to finance any business use without creating debt, startup a new venture or line of business with no financial track record, infuse cash into your business as if using it as a bridge loan, improve your company’s business credit rating, benefit from trade discounts, make timely tax payments, or handle State tax or Federal tax liens. How does a Factoring ‘Loan’ Compare to Bank Loans? A factoring company with a long history and robust resources can provide an approval process that gets started within 24 hours. An alternative to the often lengthy and trying vetting process of applying for traditional bank financing, a seasoned and resourceful factor is nimble and well-positioned to provide funding with urgency. Due diligence for factoring financing focuses on the fiscal health of your customers whereas banks analyze and weigh pros and cons of a company’s assets, net value, and creditworthiness.  The best news of all is that funding provided by a reputable factoring company happens within three to ten business days of a signed agreement for a new client. An existing client can be funded as fast as the same day. A key advantage to factoring is having money in-hand fast and efficiently from the point of sending an invoice to the factor. Whereas a business usually waits 30, 60, or even 90 days for a customer payment. How Factoring Provides Security for Business Finances and Accounts Receivable Management A factor typically advances 70% to 90% of the amount of an invoice to your business upon confirmation of your billed customer’s credit-worthiness. Once your customer pays an invoice in full, the factor then pays your company the balance due for...

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Factoring Tax Issues

Posted by on June 3, 2015 in Business Financing, Factoring | Comments Off on Factoring Tax Issues

If you have debt to the IRS, obtaining financing or working capital for your business is difficult at best – unless you work with a funding source that can help fix your tax issues and provide the necessary working capital at the same time. Factoring tax issues is a working capital solution many did not know was an option. Paragon Financial is ahead of the curve in dealing with the back-taxes problem. We have access to up-to-date information on IRS liens, levies, tax compliance history, business name discrepancies, accrued tax liabilities, and IRS installment agreements – every relevant piece of information we need to ensure that there is no risk of your receivables being taken by the IRS to fulfill back-tax obligations. For 22 years, Paragon Financial Group has been factoring tax issues and providing working capital solutions. Give us a call at 888-400-5931 today, fill-out the form to the right or chat with...

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Debtor-in-Possession Financing Can Help Turn a Company Around Following Bankruptcy

Posted by on April 7, 2015 in Accounts Receivable Factoring | Comments Off on Debtor-in-Possession Financing Can Help Turn a Company Around Following Bankruptcy

For many distressed companies, there is hope for new financing. If they file for bankruptcy protection, they may be able to take advantage of debtor-in-possession (DIP) financing to help them reverse course and return to profitability. It is typically available to companies where lenders believe the company has a credible chance and a viable plan to turn itself around from bankruptcy. The term “Debtor-in-Possession” refers to the fact that the current management and board of directors remain “in possession” of the company following its bankruptcy filing. Many small business owners are not aware that they can obtain financing to turn their company around after they have declared bankruptcy. Many lenders see DIP financing as an attractive lending opportunity because of the special treatment of DIP loans under U.S. bankruptcy law. Under the law, DIP creditors must be repaid before other creditors. In fact, many lenders will commit to a DIP loan while they would not make a loan commitment to the same company in the absence of a bankruptcy filing. DIP Financing Using Accounts Receivable Factoring Companies can also use factoring as a financing tool in DIP financing – a possibility that many small business owners do not realize. In fact, accounts receivable financing can be one of the most flexible ways to obtain financing during the bankruptcy process. Factoring can be a win-win for both the borrowing company and the factoring firm. The borrower obtains needed financing that is not based on its own credit status, and the factoring firm achieves priority status under the Bankruptcy Code. >> Find out more about DIP Financing and how it helps...

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What is Single Client Factoring or Client Concentration Factoring

Posted by on March 9, 2015 in Factoring, Small Business | Comments Off on What is Single Client Factoring or Client Concentration Factoring

There are companies that only have one or two large clients that make up their revenue source. A good example would be a company that supplies Toyota, Cargill or Target, and these large companies are their only customer.  What happens when this company needs to obtain financing from a bank?   Banks or lenders are most likely not going to approve the company because are the lack of a diverse client-base. At Paragon Financial, we can provide working capital to businesses that have single client or client concentration.   Your company gets the working capital it needs through credit protection, accounts receivable factoring and AR management.     Paragon has been helping companies with through single client and client concentration for over 20 years.  We understand their unique needs and can get them the cash flow they require quickly and efficiently. Give us a call at 888-400-5931 today, fill out the form to the right or chat with us....

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Our Broker Factoring Program

Posted by on February 25, 2015 in Factoring, For Brokers | Comments Off on Our Broker Factoring Program

For over 20 years our goal at Paragon has been to give brokers the tools to grow your financial intermediary business and to help entrepreneurs in your community.    If you refer a deal to us, we pay commission for the life of the account. All you have to do is give us a name and a number. If we close the deal, you get the commissions. Imagine getting a check in the mail every month for a simple referral!  It can be like an ongoing salary! Our sweet spot is companies who sell on Net 20-90 day terms with B2B or B2G Sales of $25,000-$3,000,000 per month in the US. We also fund importers of goods into the US.   Many companies cannot get financing because of tax issues. Paragon has expertise in funding companies with tax problems. Credit protection is another “hot button” for entrepreneurs. In business there is only one thing worse than no sales, and that is selling it and not getting paid! Less than 20% of AR funders and factors utilize Credit Insurance to protect against the account debtor’s bankruptcy. Paragon looks at credit protection as a necessity and believes that credit protection is very important for our client’s long term survival and success. Paragon also has deep expertise in Government Invoice factoring which is another great selling tool for you. Many Banks and Factors aren’t comfortable with Government Receivables and stay away from them. Paragon encourages Govt AR & PO funding and realizes it is a great way for entrepreneurs to grow their business. For more information visit our broker page https://www.paragonfinancial.net/for-brokers or contact Chris Curtin via email, National Sales Manager, or call 888-400-5931 Ext....

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