How Does Factoring Benefit Satellite Dish ProvidersThe satellite dish TV business is facing numerous challenges as the growth of the Internet continues. With many people opting to go online to watch their favorite shows, satellite dish TV is no longer that in-demand as a service. Aside from the declining profits, satellite dish providers also have to deal with the credit terms they enter with their clients. As stated in these terms, satellite dish TV providers have to wait for 30, 60 and even 90 days for their clients to pay up. This arrangement may mean continued business in the future, but it can also hurt a firmís cash flow and hamper its operations.
Viable Source of Funding
Entrepreneurs engaged in the business of supplying satellite dish will find that there are limited sources of financing for their business. Applying for a bank loan is considered impractical, for example. Banks are notorious for asking tons of documents like articles of incorporation, balance sheet, amongst others. This is not to mention the collateral requirements needed for a small firm to access a bank loan.
The most viable source of funding for small enterprises like satellite TV dish providers is business invoice factoring. In this set-up, a satellite TV dish provider will only have to show its invoices to the factoring lender in exchange for cash. The amount will be based on the total amount of the invoices, at the most 90% of the face value.
For satellite dish providers, there are numerous advantages of availing a factoring facility. Foremost of these benefits is the instant cash that these small firms can receive in exchange for their invoices. The money can be deposited in their account as soon as a day after approval of their factoring applications. For most small entrepreneurs, quick cash is important as they can use the money for their day-to-day operations.
The other advantage of applying for a factoring facility is the very minimal requirements asked by factoring lenders. Unlike bank loans that necessitate tons of paperwork, a factoring facility application only necessitates the invoices of the small firm applying for instant cash. The factoring company may also ask the representative of the firm to fill out an application form.
Small enterprises that avail of this funding scheme also benefit from the competitive rates offered by lenders. The factoring company usually charges an arrangement fee that it collects once the clients of the satellite TV dish provider settle their obligations. The fees that the satellite TV dish provider pays often are a fraction of the monthly amortizations in a bank loan had the company applied for such grant.
Lastly the money received from this facility can be used by the owner or manager in any way he or she likes. However, most entrepreneurs utilize the money for operational expenses such as payment of rent and wages of personnel. Still, it does not preclude them from using the cash for other purposes like purchase of equipment or hiring of new employees.
Satellite dish providers have a lot to gain from applying for a factoring facility. NeeBo Capital is one of the more reputable lenders of factoring financing to small enterprises. Contact NeeBo Capital now and get to know more about their factoring scheme for small businesses.
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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