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| Accounts Receivable Financing
Fast Cash
“The impact of being paid for your outstanding or existing invoices can take a business from a cash crunch position to one of liquidity - literally overnight”.
That's because, not only do you immediately receive a huge cash hit when we fund on your existing invoices, we then continue to pay you for all new invoices (within 48 hours - or faster if necessary).
This enables you to:
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- Eliminate the stress of meeting payrolls, taxes and other scheduled payments
- Know when your cash is coming in
- Negotiate better prices, take prompt payment discounts and receive preferential treatment from suppliers
- Concentrate on developing new business
- Grow as quickly as you can and always have the funds without refinancing
- Have professionals manage your accounts receivable
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And you don’t have to mortgage your house or sell your hard earned equity.
CALCULATING THE BENEFITS OF INVOICE FACTORING?
Will the benefits if factoring outweigh the cost? This is the most critical consideration. The cost of capital should be viewed as an investment which will advance the business, similar to a new piece of a equipment. You would not spend money on a piece of equipment unless you were convinced that it would increase sales and profit or reduce costs. The cost of acquiring cash through invoice factoring should be weighed in the same way. The immediate and ongoing availability of cash must help to increase sales and profits.
The exhibit below summarizes the financial impact on an actual company that used invoice factoring to fund its sales growth. This company began with an annual sales of $1,000,000
By factoring, they were able to increase sales to $1,300,000 in the following year. After paying the invoice factoring fees their profits increased 6 times!!
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Year 1 |
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Year 2 |
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| Revenues |
$1,000,000 |
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$1,300,0000 |
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| Cost of Goods |
650,000 |
(65%) |
845,000 |
(65%) |
| Gross Profit |
350,000 |
(35%) |
455,000 |
(35%) |
| Fixed Costs |
340,000 |
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340,000 |
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| Cost of Invoice Factoring |
0 |
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52,000 |
(4%) |
| Profit Before Tax |
10,000 |
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62,000 |
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| *in most instances the gross profit percent should increase due to the efficiencies of higher sales volume |
NOW CALCULATE YOUR COMPANY'S RETURN
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