US our economy based on sustainable growth in the long term prosperity. Part of this is the small business sector. Recently US Small Business Association website status report Kauffman Firm Survey (KFS), providing insight for better understanding of company startups in the United States 92 percent of startups surveyed about 7 percent were purchased from existing businesses or franchises more than half of businesses were home-based business between 2004 and 2006. 40 percent run their business on the base rental, and 5 to 7 percent of those operated on its purchase of space.
The startup created an average of five jobs in the company in 2004; This includes not only 4.1 workers places, but also 1.4 entrepreneurial positions. Companies began their company in 2004 generated an estimated value of more than $ 575 million in revenue. By 2006, the total estimated corporate income sample had increased by 53 percent to $ 879 million, while employee payroll grew 56 percent between 2004 and 2006.
There is a good indicator for the future. But given the more recent economic downturn in the United States, many of these companies have trouble staying afloat. To obtain a loan from a traditional financial institution can be a long, frustrating process.
There is one solution that is available to independent companies, known as the grace period factoring or invoice factoring, is the purchase of financial assets or claims. Traditional banks involve two parties, while factoring involves three parties, which makes it much easier. A traditional banks will base their decisions on the credit worthiness of the company, but it is based on the value of the claims. Factoring companies look at the creditworthiness of the customer and the customer pays within as little as 24 hours. Invoice factoring benefits startups by going up to 90 percent against invoices, providing funds covering business expenses, such as product or even payroll.
factors do not expect to buy 100 percent of the company’s receivables, and there are no minimum or maximum sales volume requirements. The factoring process begins with due diligence that typically takes one to two business days, and after this has been completed the client is free to offer invoices to factor, for purchase. Upon receipt of invoices, the company checks the credit of the debtor named on the invoice and makes sure that the sale represented has been satisfactorily completed. Once this is done the debtor is advised of the purchase IFG and the client receives their strength.
The program allows choices of invoices to be calculated, enabling customers to retain most of their money, while spending the minimum fees to guarantee adequate cash flow for the company.