running a small business takes guts, ingenuity and of course money. The old saying is true: “You have to spend money to make money.” Unfortunately, when it comes to small and mid-sized business, there is usually little working capital to spend on anything but necessities.
accounts get sent out, but the payment for goods and services can not come in for two to three months and sometimes longer, especially in this economy. What is a small business owner to do when they need money fast?
Thanks to the Internet, an innovative new concept is here to give small and mid-sized companies access to these payments in as little as one day instead of weeks or months. Similar to account factors, this method of financing is the wave of the future financing options for small businesses and medium businesses (SMBs).
Performance SMBs is subject to growth and vision. Without working capital, it is impossible to bring them to reality is the great cost of any business venture. When the opportunity arises, SMBs can catch it by getting money through the account factors, but they also lose some control over this option.
With funding invoice online market, they keep control of what trade they want to sell, based minimum and maximum fee they will take. Having to wait for cash can mean lost opportunities or even worse, losing the chance to competition
This is not a loan process. it simply provides a way for SMBs to receive payment on the account quickly and efficiently by selling excellent account to a third party buyer.
Since accounts put on the auction site that connects Sellers to buyers is a small business owner can get a competitive rate for the sale of their accounts and get in as little as one day, payment moments after deducting charge the buyer.
The buyer pays a predetermined advance amount in the account. The transaction is completed when the debtor has paid this amount including accrued fees for the buyer. All remaining funds go back to the seller. If claims remain unpaid, seller undertakes to repurchase it from the buyer.
With a traditional loan, small business monthly payment obligation plus accrued interest. The lengthy paper work, personal guarantees, covenants and burdensome rules credit check are also time-consuming.
With invoice factoring and financing methods, the owners get money when towards them and only pay a small one-time fee for the convenience. Because buyers compete to purchase accounts in real time, the seller receives a competitive cost of capital.
This low risk reduced funding puts control in the hands of the business owner and buyer. The owner is considered a single account or twenty, what meets his needs. The buyer can choose any auction suit him best and offer accordingly.
The online auction site takes the responsibility to verify the identity of buyers and seller and manages electronic payments between.
In a rapidly changing economic times, new ways to access capital in small and mid-sized businesses is essential to a successful delivery. Discount fee is a small price to pay for faster access to the money that is owed to the company anyway.
In fact, often there is an even bigger opportunity for the company when their working capital is tied up in outstanding invoices. With cash in hand, new equipment can be purchased, much-needed repairs made or even new employees hired. It is a win-win situation for everyone involved.