Why Invoice Factoring is Important in Food Distribution

Invoice factoring, which is also known as accounts receivable financing, is an important part of many different industries, including the food distribution industry. In the world of food distribution (just as it is in most other industries), cash flow is a serious problem that in its extreme cases, can even sink a company. In other cases it can prevent expansion and growth, which is not a good situation to be in either.

Here are 3 reasons invoice factoring is an important service to have in the food distribution industry:

1. It helps fight back against the rising cost of fuel. It's pretty much guaranteed that you will have to raise your rates frequently as the cost of fuel goes up, but when do while you are waiting for those new rates to take effect? You need to announce the rate increase and then wait a short time, but your business can't afford to wait. This is where invoice factoring comes in to fill in those gaps. By leveraging the power of the invoices you have out that have not been paid yet, you make it possible to continue paying your fuel bill until those new rates kick in.

2. You receive the flexibility to extend payment times for your vendors. Sometimes in order to get a higher price for the goods you are distributing, it may necessary to extend your vendors' payment times. There is a growing demand for extensions, but if you do not have the line of credit offered by invoice factoring, then you will be unable to offer this service. Then you will be cheating yourself out of a high volume of income because you can't extend payment times in return for higher payments on the back end.

3. New distributors who are still growing will have to deal with lower profit margins as they begin to prove themselves to their customers. This makes working from check to check a reality, but it certainly isn't a good reality. What can you do if you get offered a major contract and then aren't able to fulfill it because you don't have the cash to do so? You will be missing out on an important opportunity to expand and grow your business if you don't have the financial advantage of invoice factoring to help you out.

Case Study
GTA Fruits is a distributor of tropical fruits that works closely with numerous major grocery store chains. By managing and financing GTA's accounts receivables, the company has been able to grow rapidly, enjoying not just growth but also a greater need for cash flow, which is growing exponentially.

Financing for the Food Distribution Industry
Invoice factoring has worked in numerous different industries. Invoice to Cash, also known as ITC, actually specializes in helping small to medium sized business grow as they leverage those unpaid invoices. Low risk small business financing options include:

- Cash right in the moment you need it, whether it's to fund the next contract, enable vendors to pay higher prices to you later, expand the business, or just pay your bills.

- Accounts receivable administration will improve your cash flow by placing someone in charge of managing it more efficiently. Collection becomes a breeze as well when you take steps to improve the workflow of this project.

- A transportation management system enhances your ability to serve your customers, thus raising your bottom line.

By combining these three services, you are sure to discover the growth that has been just around the corner for so long. Leverage your invoice so you have the cash to fill the next big order.

ITC - Invoice to Cash, Inc. an innovative factoring company in Canada committed to helping small and medium size business achieve financial stability.

Unsecured Business Loans

Collateral - A borrower's asset that is given up to the lender if the borrower is unable to pay back the principal and interest on the loan; making the lender the new owner of the collateral.

Credit Score - A numerical expression based on the analysis of a person's credit files, to represent the perceived likelihood that the person will pay debts in a timely manner.

These are two terms that one must be familiar with when contemplating a business loan, simply because banks consider both of these when determining whether or not to approve the loan. Many small business owners may not have one or the other (sufficient collateral or a high credit score), leading them to search for unsecured business loans, which only require borrowers to posses one of these requirements.

An unsecured business loan is a business loan that is not backed by collateral. In most cases, this leaves unsecured business loan lenders to rely solely on the borrower's credit rating. Collateral serves as a means for the lender to get back the money that they have lent, should the borrower default on the loan. It is a back-up plan for lenders to make sure that they get their money back no matter what. If a borrower does not have collateral, a lender may require the borrower to have a near perfect credit score. This is because the lender can only rely on the borrower's past borrowing and repayment habits to determine if he/she is likely to repay the loan. Consequently, it is virtually impossible for a potential borrower with a low credit score to receive an unsecured business loan, because their credit history suggests that they will not repay their loan on time, if at all.

However, there are lending companies that offer a different kind of unsecured business loan; one that is not based on the borrower's credit rating. These lending companies provide a type of unsecured business loan called a merchant cash advance. A merchant cash advance is a lump sum of cash given to a merchant in exchange for a small percentage of the business' future credit card receivables.

Since a merchant cash advance is based on a business' future credit card receivables, rather than the borrower's credit score and/or collateral, it can only be utilized by retail business owners who process credit card transactions.

Additional requirements may vary from lender to lender. Generally, a merchant must not have any unresolved bankruptcies or tax liens to be eligible to receive a merchant cash advance. Also, lenders may require merchants to process anywhere from $2,500 to $5,000 in monthly credit card sales for four months to one year before approving a cash advance. Merchants are also usually required to have at least one year remaining on their business' lease.

A merchant cash advance can be a great alternative to a bank loan. Most lenders are able to provide loans from $5,000 to $500,000, depending on how much money a particular business location receives in credit card sales each month.

If you are one of the many loan-seekers in search of an unsecured business loan, choosing a merchant cash advance may be a very lucrative decision, especially if your credit score is not great. If you meet the minimum requirements (owning a business that processes credit card sales), consider researching the existing merchant cash advance lenders, and find out if a merchant cash advance is the unsecured business loan for you.

Unsecured Small Business Start Up Loans: Easy Financing without Collateral

Statistics prove that the demand for unsecured small business startup loans have been rapidly increasing over the past few years. The idea of an unsecured loan creates new financial horizons for individuals that may not have collateral. This is also of special interest to new business owners that are interested in entering a new business venture. Potential business owners are always interested in a business loan to provide working capital for their new endeavor.

The paradox when applying for most unsecured small business startup loan programs is that a new business owner does not yet have any collateral. This can quickly shatter a business dream. The only other consideration such an individual can have is to use his or her personal assets to secure a loan. But new business ventures have a risk associated with them, once that many people are not willing to transfer to their hard earned assets.

Collateral is often the biggest obstacle to the prospective business owner. Not only does a new business not yet have any commercial collateral to provide; but it is asking a lot for an entrepreneur to put his hard earned personal assets at risk in order to start a new business venture. Yet, without collateral, getting a business financing can sometimes seem impossible.

Small entrepreneurs, who do not have collateral to offer, find unsecured small business startup loans as an alternative, which help them expand their business to new horizons. They are only required to make regular repayments to the creditor without any apprehension of their business assets being repossessed by the lender in case of defaults. At the same time, small businessmen who opt for unsecured small business start up loans should be prepared to pay a little higher interest as compared to other credit options. However, interest rates may vary depending upon the credit history of the businessmen.

No collateral unsecured small business start up loan products are now available through select lenders, although they can still be relatively difficult to find among traditional banks and lenders. The revolutionizing force is coming from a plethora of web based lenders that are offering innovative new financial solutions, including no collateral loans. A variety of unsecured loan products for business and personal needs can be found via web based financial companies.

Applying for unsecured startup small business loans is easy, all the business owner need to do is just go on line and submit their loan details. Then the lenders will refer back to you with the loan decision in a few days.