Factoring Allows Exporters & Importers to Grow their Business
Many entrepreneurs dream of doing business internationally. For many businessmen, doing business with other nationalities mean they have achieved a certain level of success in their chosen fields. Although exporting and importing have substantial rewards, it can also be very challenging. Exporters and importers are faced with tests like fluctuating currency rates, varying legal requirements, customs issues and cash flow problems.
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Cash flow challenges are mainly caused by delayed payments of clients. In the export and import business, payment of invoices often takes weeks and even months after delivery of the goods. Worse, a client may fail to make any payment at all because it is likewise facing financial distress. Not surprisingly, many firms find themselves in deep fiscal woes because their clients donít pay up quickly. Aside from disbursing the salaries of their workers, businesses in the import and export business have to pay their obligations with their suppliers.
Alternative to Bank Loan
Instead of applying for a bank loan, companies in the import and export business can apply for a factoring facility from a factoring lender. Factoring is also referred to as invoice receivable financing, an arrangement wherein the exporter or importer sells his invoices in exchange for cash. The factoring lender will advance the amount as stated in the invoice. The money will be then used for funding various operational expenses.
Compared to a bank loan, invoice receivable financing is a more suitable financing scheme for exporters and importers. First, factoring financing can be quickly granted to an importer or exporter as compared to a bank loan that takes months to be processed. Lenders normally approve a factoring application in as short as a couple of hours and as long as a few days. This short turnaround time is ideal for businessmen who are in urgent need of cash for payment to their suppliers, or for settling their various bills.
Bank loan are notorious for establishing stringent requirements in evaluating loan applications. These institutions look at the creditworthiness of loan applicants apart from other documents like financial statements, articles of incorporation, annual reports and similar credentials. These requirements, however, are not needed in applying for a factoring facility. This explains why the evaluation and processing of a factoring application is short and quick.
Merits of the Financing Facility
Since a factoring line is quickly granted to a qualified exporter or importer, the entrepreneur is able to make use of the cash for expanding his or her business. The money advanced from the factoring firm can be utilized for operational expenditures. It may also be used for funding expansion projects like purchase of an office space, acquisition of service vehicles or hiring of new marketing personnel. Likewise, a factoring arrangement wonít put an exporter or importer in debt.
Exporters and importers interested in getting immediate funding can approach Neebo Capital. We can process and approve your factoring applications within hours. There is no need to submit financial statements or pay monthly minimums. Enjoy flexible rates at 0.59 to 1.5% in 30 days and advance up to $10 million. Contact us today and gain access to quick financing easily.
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Rates at 0.59% - 1.5% for 30 days
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|Purchase Order Financing||Accounts Receivable Financing||Asset Based Lending Options|
General Articles about Accounts Receivable Financing and Factoring:
» 08/01/2012 Debt Financing or Off Balance Sheet Financing?
» 09/15/2011 What to know when selecting a Factoring Company
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