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Bring in July 4th with 4 Ways to Improve your Cash Flow!

Cash flow need improvement? Call Invoice Factoring U.S.

Cash flow need improvement? Give us a call (800) 218-9000

Here are 4 ways to get the biggest bang for Cash Flow bucks:

  1. Negotiate Vendor Agreement(s) – Even if your large customer says their terms are 60 days without exception, there still can be items that they can do to assist your company with its cash flow. They can often add a clause for early payments such as a 2% discount for a payment within a 10 day term…however, bringing your own independent financing through a factoring company can often save you a lot of money and provide more flexibility.
  2. Make Deals with Suppliers – Chinese Suppliers are tough, but if you take the time to visit and build a relationship with your factory, they will most likely support your company with some terms after the first year if your business has been smooth. Suppliers can be a great source of extra credit and relive strains on your cash flow, especially when selling to larger customers.
  3. Selling Smart – When selling to a large customer, we all dream of the big orders. These orders can just as easily become a dream as a nightmare. Start by selling smaller amounts by selling regions of retailers or via their online presence before rolling your product to all their stores. Even though buyers are looking for margin and product wins…you need to be able to win too. Sell smart.
  4. Get the Right Financing – Yes, we all think we should have a big credit line with the major bank across the street for at a half point over prime. Again, the faster you realize what financing is meant for your company, then the faster you can move on to selling and growing sales. Many small to medium size businesses need working capital to buy more products and to hire staff…one does not need to beg a bank for a line to grow. Commercial lending banks that specialize in lending to businesses like PMF Bancorp can setup lines of credit, AR financing, trade financing and many other types of financing without the brain damage that the major banks cause. The right financing allows you to get back to the business of marketing and selling…the right financing will evolve as your business develops appropriately.

USC Marshall School of Business: Stephen Perl, CEO PMF Bancorp presents alternative business financing – Fin-tech to Crowdfunding

USC Marshall School of Business: Stephen Perl, CEO PMF Bancorp presents alternative business financing -Fin-tech to Crowdfunding from stephen perl on Vimeo.

5 Tips for Spring Clean-Up for Your Business

Invoice Factoring Los Angeles, CA

Out with the old, in with the new financing options!

Spring is a great time of year to clean out the old and prepare for the new. This not only works well for the home and garden, but for your business too! Here are 5 tips to get you started:

  1. Let the Cash Shine In: Look for innovative ways to get cash in-hand faster and to have access to funds when growth comes calling. For periodic access to immediate cash, consider invoice factoring financing where you sell your accounts’ receivable or invoices at a discount in order to get the cash in-hand sooner rather than later. Great way to increase cash without increasing your debt or accumulating more loan payments. For projects or longer terms items like developing a new product line, accessing a small business loan may also be a good solution. In some cases, new invoices may not be generated right away so a more patient money such a longer term loan or equity may be a sound alternative.
  2. Trimming Inventory: Inventory is stuff, stuff takes up space, and space costs money. Spring is a good time to consider selling off inventory that’s no longer turning over profitably. Any potential loss in the process needs to be weighed against the carrying costs, particularly if you can replace the old with new items that will sell.
  3. Pruning Expenses: Revisit everything that you’re spending money on to look for ways to work smarter, more efficiently and more profitably. If this takes too much time, the first thing you want to fix is your expense management system. Other areas include evaluating energy, communication and outsourced services costs. If you’ve been with a payroll provider for a long time, for example, reexamine what they’re charging you over the competition. Spending controls equal profit controls.
  4. Customer Weeding: Take a fresh look at your customer base. Who pays on time? Who’s been with you a long time? Who hasn’t bought in a while? Who represents routine problems? The more you can understand who is buying what, when, how much and why, the more you can proactively drive increased sales and profits going forward.
  5. Staff Sprucing: Your team can be one of your most powerful – and expensive – assets in business. Look at who is doing well and be sure to let them know. This includes not only routine praise, but also other forms of rewards including financial and benefits. If someone is not performing well, nip it in the bud sooner rather than later. One bad apple can spoil the bunch!

For service-type businesses that do not deal with inventory issues, another great area to take a fresh look is how well you’re spending your time. Collectively, by looking at these and other ways to freshen up your business, you will be sure to reap many rewards.

Checking Your Business’s Vital Signs

It's important to check on the health of your business

It’s important to check on the health of your business

If you ever go to the hospital or even for a check-up at the doctor’s office, one of the first things the nurses do is check your vital signs. These are the critical factors that are used to determine the state of your overall body function such as pulse rate, temperature, and blood pressure. Though we don’t always like it, measuring these factors is important because it gives the doctor, and us, a clearer picture of how healthy we are or where we may have problems.

Just as doctors and nurses must check our vital signs, we have to check our business’s financial vital signs to determine the relative health of our ventures.

  • Gross Profit | This is the difference between your sales revenue and your cost of goods sold. The larger the difference the better. A higher gross profit indicates stability and sustainability of the business.
  • Expenses | Expenses in business are separated into two categories – fixed and variable. While fixed expenses tend to remain constant, it’s important to regularly review variable expenses due to their more volatile nature. Small changes in prices of supplies or materials can have a large effect on your bottom line. Look for areas where prices have increased and adjust your pricing or lower your overall expenses.
  • Cash Flow | Cash is like the blood that runs through your veins. It is pumped throughout your entire business and keeps everything functioning properly. Low cash flow can be a serious issue for businesses, especially if unexpected costs arise. Fortunately, there are options such as invoice factoring financing and accounts receivable financing to help your business speed up cash flow.
  • Growth | Growth is typically a strong signifier of a healthy business. If your business is experiencing stable, consistent growth, you are likely doing well. However when growth begins to slow, you should act sooner rather than later before it plateaus, and eventually may even decrease. You should be cautious of rapid growth as well. While it may be a blessing, it can also create some serious operational and financial strains for your business.
  • Budget Deviation | An important part of running a business is tracking your progress. Your budget deviation analysis allows you to compare predicted performance against actual results. This tells you if your business is on track for meeting sales goals and helps you keep spending under control.

Just as with your own personal health, you want to check these business vital signs regularly to ensure that your company is healthy and functioning well. Luckily there are no cold waiting rooms or paper shirts required to measure these factors, just good business practices and financial data.

Invoice factoring and new opportunities: How to make the most of it all?

female-executive-reportsIt is quite an unbeatable fact that for every kind of business you need cash. It is like a king that rules the market. One cannot deny the paramount importance of cash and its contribution toward the growth of any small, medium or large business. You may say that profit, market share or your business turnover indicates your business growth, but can all this become plausible without cash? This clearly defines the fact that cash has never, and will ever find a replacement to define the ongoing success of a business. Absence of cash can make a business succumb to the pressure of market and of course, crunch. Unfortunately, a lot of small scale companies have already given up due to lack of cash. This is where the invoice factoring enters.

Let us suppose that you started your own electronic company in Los Angeles around six months ago. You have been chasing a really good deal for quite some time, but it seems like letting it forgo shall be the only option sans cash. Really? Think harder! Factoring can prove to be a blessing in disguise for all such companies that are looking for immediately financial solutions in crisis based situations.

In layman’s terms, invoice factoring is nothing but the purchase of AR or accounts receivable without a resort. It can be considered as one of the antique, yet effective forms of sourcing commercial finance. You shall be surprised to know that the roots of invoice factoring can be traced back to 1600s when the colonists made extensive use of this concept in North America.

Invoice factoring is a kind of loan that you borrow on a short term. Under this concept, your business (suppose the electronic company in LA) shall transfer a part or all of the account receivables to the lender (called factor). So, when you need to grab on that massive opportunity for your electronic company in LA, you can look up to a ‘factor’ like PMF Bancorp, which in turn, enables you to focus on your business plans rather than cash requirement.

When you receive the percentage of your account receivables, the business owners can fund their present business operations and in turn, generate the new ARs. Invoice factoring is therefore, considered extremely beneficial for those companies that are looking forward to faster growth or seizure of a market share with new opportunities. Getting those new opportunities is really simple now!