How Payroll Financing Works for Commercial Cleaners

Posted by on August 2, 2017 in Commercial Cleaning | Comments Off on How Payroll Financing Works for Commercial Cleaners

We all know that the banks do not provide a friendly credit environment to the commercial cleaning industry. If they offer any money, it usually isn’t enough. This often leads to an inability to grow your company due to a lack of funds. Well, there’s a type of financing out there that is greatly increasing in popularity in the janitorial industry. It’s called factoring. This type of financing concentrates on your customer’s ability to pay, not yours. Factoring is the sale of your accounts receivable (invoices) to a funding source at a discount off the face value in return for immediate cash. The funding source is known as a factor. The process typically works like this: Your cleaning company provide services and issue an invoice to your customer. Without factoring, you wait 30-60 days for payment. With factoring, the factor immediately purchases the invoice and advances an initial payment of approximately 80% of the invoiced amount. In most cases, you’ll have funds in your account within 24 hours. When your customer pays the invoice (payment is made directly to the factor), you’ll receive the remaining balance less the factor’s fee. Factoring is a well-established form of business financing that produces immediate cash payments to a company at the time of shipment, delivery and invoicing a customer. In its basic form, factoring has been used by American business since Colonial times, and its origins go back even further, literally thousands of years to the early days of commerce. American consumers take part in a common form of factoring every time they use a credit card. There are 1.4 billion credit cards in circulation, 2.6 each for every American cardholder. In 1970 the average balance on individual cards was $649, increasing in 1986 to $1,472, and today it is an astounding $16,061! Millions of times a day every business that offers customers charge privileges using credit cards is the direct beneficiary of factoring. American retail business depends on the factoring system, and without it, the national economy would be seriously handicapped. In this familiar transaction, the issuing bank or card company is the factor-using the Visa, MasterCard or other system-advancing the seller of merchandise or service cash immediately after your purchase, long before you actually pay. Because the seller gets cash up front without having to wait for your payment, his money is not tied up in receivables. For the double privilege of making credit available to customers and getting immediate payment, the business is willing to pay a discount to the issuing bank or credit card company-typically two to four percent of the purchase price. Thus for ever $100 of merchandise you buy with a credit card, the seller gets $96 or $98 in immediate cash. Factoring accomplishes the same for commercial or business-to-business transactions. When you extend credit to a customer, you are essentially becoming that customer’s part-time banker. For the period credit is extended to Customer Smith – 30 or 60 days – you become his lender, and he your borrower. For the length of time credit is extended you lose the value of that tied-up money because you can only anticipate payment. If Mr. Smith had paid cash, you could have invested that money immediately, earning interest on it rather than having to wait. When Smith pays late, your cost increases still further. Since there is no “free lunch” in business, someone has to pay the costs of your extension of credit; either you pay by reduced profits, or your other customers are forced to pay higher prices. In a marginal company, excessive credit extension and late...

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Commercial Cleaning Company, Miami Florida – Invoice Factoring

Posted by on May 28, 2014 in Commercial Cleaning, Success Stories | 0 comments

Paragon Financial has provided a $750,000 invoice factoring line of credit to a commercial cleaning company in Miami, Florida.

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Janitorial Services

Posted by on July 27, 2011 in | 0 comments

The Benefits of Invoice Factoring & Receivable Financing For Janitor Services Commercial Cleaning Companies We Finance Janitorial Service Companies Get Working Capital NOW Help With Workmans Comp Issues Resolve Payroll Issues Client Credit Services Accounts Receivable Management Receivable Financing We understand the cash flow pressures of janitorial and commercial cleaning companies. Workman’s comp issues, payroll cash flow issues and more. We can advance up to 90% of your invoice amount. Why wait 30-90 days for payment of an invoice? Why ties up your working capital while waiting to get paid? Our factoring program allows you will have the money to meet payroll, grow your janitorial services company, and pay suppliers. We have been helping janitorial service companies for over 23 years get the financing they need. When the traditional banks said no, we said YES. Your janitorial services company can get a steady stream of cash through our invoice factoring, purchase order financing and accounts receivable funding programs. It’s simple as that! Get started immediately by filling out the simple and quick online invoice factoring application. Let Paragon Improve Your Cash Flow Keep Capital Flowing Without Increasing Your Debt This is not a loan. Paragon gets you money for your completed work, now. We don’t ask for equity in your business, you retain full control. Customer Credit Services At no extra cost, Paragon now acts as your in-house credit department. If you’re thinking about doing business with a new client, give Paragon a call. We’ll give you detailed information on their payment and credit history. Paragon can help you stay clear of doing business with bad companies. Accounts Receivable Management Paragon provides on-line, real-time reporting. You can log on anytime and see updated aging reports, collection reports, and more. Backdate certain reports and print them out directly for internal use or accounting purposes. Paragon is not a collection agency, but we do have a team of callers that put in friendly reminders to accounts when they get past due. We make sure to handle all calls in a professional manner. When discussed with you first, Paragon is fully capable of applying the heat when needed. Flexibility Paragon’s agreements give you the flexibility to factor what you want when you want. You choose which accounts that you wish to factor. Unlike some other companies, Paragon does not require you to factor everything. We only want you to use factoring if and when it’s beneficial for you. Get Supplier Discounts – Win More Business The ultimate goal of invoice factoring is to increase your available funds. This will enable you to go after bigger clients and larger contracts. Often, you will find that it takes the big guys longer to pay. This can lead to difficulties in filling larger orders and performing larger jobs. Helping you to grow your business is the purpose of The Paragon Factor. Increased cash flow can enable you to quickly pay your suppliers. This can allow you ask for trade discounts. Often, as little as a 2% quick pay discount can cover some, if not all, of your factoring costs. GET FAST FUNDING FOR JANITORIAL SERVICE COMPANIES! Apply Securely, call 888-400-5931 ext 1 or email us. Money When Your Business Needs It...

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