Accounts Receivable Financing

Accounts Receivable Financing- The Fine Art of Happiness explores the history of factoring; it offers suggestions, questions and answers to the question of whether or not accounts receivable financing will bring you and your business happiness and success.

merchants happy? Because they would be paid for their merchandise many months before payment for their merchandise was received. With this cash in hand, suppliers, employees and Imperial taxing authorities could be paid. These financing agreements were based on long term relationships and trust.

Two hundred years ago accounts receivable financing evolved in the United States of America, primarily for the textile industry, for the same reason: to accelerate growth and profitability by accelerating cash flow. Again, long term relationships and trust were the main basis for these financing arrangements because there was no effective court system to enforce international contracts for the purchase of European fabrics for American factories.

Thirty years ago the concept of accounts receivable financing, or factoring, was considered to be on the fringes of respectable financing for products or services other than textiles. It was considered radical to finance the accounts receivable of relatively high risk businesses. Since then accounts receivable financing has evolved into a multi-billion dollar industry. Long term relationships and trust are still very important because when you utilize accounts receivable financing you are entrusting a commercial finance company with the lifeblood of your business- your cash flow.

Let’s make some assumptions. The purpose of life is to be happy. As a business owner, you are happier if your customers pay immediately when they receive your invoice as opposed to many months later. As a business owner, you are happier if you are more profitable when you are selling more goods or services at greater profits.

Accounts receivable financing may be the enabling tool for more capacity, more flexibility, more fluidity, more efficiency, and more sales if you have to give credit terms to your customers and your internal cash flow, or bank financing will not keep up with you need for cash to grow. So you need to ask yourself, are you happy with the status quo? Do you feel like you are stuck because your capital expenditures and operational costs are too high? In the life of your business, do you feel like you are being held back from succeeding- like receiving the “Do not Pass go, do not Collect $200” card from the game, Monopoly?Here are some questions to ask yourself regarding overcoming obstacles to your happiness and success: What is your market? Is it local, national and/or international? What are your short term and long term challenges? What is your customer base? What is your company sales and distribution strategy? What is your strategy for accelerating growth, market presence and penetration? Do you have strong gross margins with additional opportunities to drive operating efficiencies as you business scales upward? Will you realize increasing margins as a result of increasing sales? Query: could your business be expanded exponentially if you had virtually unlimited financing? Is this a reasonable goal and would this make you happy? You need to evaluate the cost-effectiveness of accounts receivable financing versus the scalability and capability of your own company. Accounts receivable financing may be your solution to the fine art of happiness and your success as a business owner.

$10,000 Personal Loans For Bad Credit

Bad credit can make large loan approval difficult, but revealing the loan purpose can make a difference. It can work a treat when seeking a $10,000 personal loan, for bad credit borrowers.

Seeking approval for a large loan despite having a bad credit history can be a challenge, but providing some extra details can strengthen the application and make all the difference. For example, $10,000 personal loans for bad credit borrowers could be approved if the lender knows what the specific purpose of the loan funds is.

It is surprising how influential a few minor details can be when lenders are assessing an application. Lenders want to be sure that the applicant seeking a personal loan is a reliable person and will make repayments. Providing a purpose and a detailed plan of how the money will be spent gives this positive impression.

These factors might not be obvious to applicants seeking approval with low credit scores, but it is worth noting that approval is not always granted on the basis of figures and credit history.

Providing a Loan Purpose

When it comes to meeting the basic criteria, most applications do so with ease. But despite these criteria being critical to approval, there is still no guarantee that a $10,000 personal loan for bad credit will get the green light. Sometimes lenders need greater context, and providing a genuine purpose for the loan accomplishes this.

Most loans have the purpose in their title, like auto loans and home loans, but personal loan is a very vague title that makes anything possible. These non-descript loans are often used to clear a variety of debts. Stating this on the application is very helpful, with lenders preferring the funds are used for constructive purposes.

Of course, it is impossible to guarantee approval with low credit scores of a $10,000 loan, but if the purpose is to clear debts, then lenders are more likely to take the leap of faith.

Providing Detailed Spending Intentions

Of course, stating that the purpose of a loan is to clear debts is not quite enough. When seeking a $10,000 personal loan for bad credit, especially when the loan is unsecured, it may be necessary to provide detailed information on what specifically the money will be spent on, and how the spending is structured.

To create this kind of document, it is necessary to study your existing debts, and assess which ones cleared will have the greatest benefit. It may be worthwhile speaking to a financial advisor about this. Having dialogue with a lending institution also improves the chances of getting the personal loan approved.

When there is debt from multiple sources, with different rates and terms, using a loan to clear even some of those loans, is a very positive move. Replacing 4 or 5 loans with one consolidation loan greatly reduces monthly payments. Also, getting $10,000 loan approval, with low credit scores, can free up extra cash too.

Choosing the Right Lender

Most lenders are willing to grant a $10,000 personal loan for bad credit management purposes, but not all of them offer good terms in the deal. Traditional lenders tend to be more expensive, with the bad credit status pushing interest rates up. Online lenders, however, tend to offer the best terms, with lower interest rates and more flexible repayment schedules.

And with comparison sites available online, the task of finding the best deals available is made much easier, with search engines taking seconds to filter through them. Given that online lenders are experts in bad credit lending, getting loan approval with low credit scores is much more likely from online lenders.

But when seeking a personal loan, even with the curse of bad credit scores, providing loan purpose and a detailed financial plan helps greatly once the right lender and loan deal is found.

Is an Unsecured Loan Right for You?

Bank signature loans require favorable credit, payday cash advances do not, making it an attractive loan for folks with poor credit. Having troubled credit, instead of seeking a long term unsecured loan, consider alternatives.

Many types of loans exist to fit the various needs of people in different financial situations. If you want to understand the qualifications for a loan approval, you need to examine the various types of loans available to you. The variety includes secured and unsecured loans and short term and long term repayment loans. These are not all that are available but they are the most common. Take a look at each.

Secured Loans

Collateral is the key word for secured loans. Collateral consists of value property put up to secure the amount of the loan. In other words, if you take out a secured loan, you will give the lender temporary ownership of your home, other real estate, stocks and bonds, or even a late model car. Should you default on the loan, the lender will have the right to seize the property and sell it to cover the cost of the loan. Since these loans are secured by valuable property, interest rates are usually lower and repayment terms can be more comfortable. Also, these loans can be rather large. These loans can have long or short term repayment terms, depending on the size of the loan and perhaps other factors.

Unsecured Loans

These loans usually have short repayment terms ranging from 15-30 days dependent on the size of the loan and other factors. They are usually for amounts ranging from $100-$1,500 depending on salary and debt to income ratios. Since no security or collateral is pledged, these loans tend to have higher interest rates.

Bank Signature Loans

An unsecured loan from a bank, usually called a signature loan or personal loan, generally will have a repayment plan of around one year. If credit is good, interest rates will be low. Federal regulations direct lenders to figure and present an interest computation so borrowers can easily compare rates among various lenders.

Pay Day or Cash Advance Unsecured Loans

Rather than offering an interest rate, pay day or cash advance lenders simply charge a fee. Once computed, you will see that it amounts to interest well above that which a bank would charge. However, these loans are more accessible to folks with bad credit. A bank signature loan has higher qualification standards thereby excluding bad credit borrowers. These loans are usually gotten off the internet or from storefront businesses. They have quick turnaround times, repayment due within 15-30 days. They can be extended, but this is where a lot of borrowers start to get in trouble. With extension fees and more interest paid, a loan repayment may end up to be twice what the borrower originally received.

You Must Decide and Have a Goal

The determination as to what sort of loan you ultimately get depends on your credit history, whether or not you want to offer collateral, the zeal of the lender, and other factors. Folks with good credit should first consult with traditional lenders such as banks or credit unions because their interest rates are rather low. What if you are seeking a cash infusion for your business? You should start your search with a consultation with you r local Small Business Administration agency.

Folks with poor credit histories may want to seek out smaller loans from a pay day or cash advance lenders rather than a long term unsecured loan. Or, if they do want a long term loan, consider offering a home or auto as collateral. No matter which type of loan you choos, it can be a great help to your poor credit scores or it could end in disaster. Be sure to read the fine print before you sign on the dotted line. Make your payments in a timely manner as dictated by your contract.