A recent survey by Wells Fargo and Gallup found that optimism among small business owners is at an 11-year high. The survey, which was conducted between January 3 – 9 of this year showed a significant increase in the “future expectations” score which is an indication of how well business owners expect their companies to perform over the next 12 months.
Wells Fargo Managing Director and Senior Economist Mark Vitner said, “The economy ended 2017 on a high note, and many small business owners believe that strong momentum will carry over into 2018.” He went on to say, “We are encouraged by the breadth of the improvement this past year, particularly in quantifiable areas like sales and overall finances. The more broad-based the gains, the more likely those gains will be longer lasting.”
The Wells Fargo/Gallup Small Business Index which questioned 603 business owners, was conducted two weeks after Congress passed the new tax law.
Major Takeaways from the Small Business Survey
Fifty-two percent of business owners who participated in the quarterly survey said that their businesses had seen increases in revenue over the previous 12 months and 66% said they expect to see continued increases in the coming 12 months.
More than three-quarters of participants also said they expect their cash flow will be “very good or somewhat good” during the coming year, and 38% said they expect to increase their capital spending over the next 12 months.
Nearly half (46%) of business owners surveyed said they expect that credit will be “very easy or somewhat easy” to obtain and one third expect to hire more workers.
Small Business Concerns for 2018
When asked what challenges their businesses face, 16% said attracting new customers and finding new business top their list. Other concerns included hiring and retaining staff (13%), cash flow (10%), taxes (10%) and government regulations (7%).
Wells Fargo’s head of Customer Segments Andy Rowe said, “Our latest survey tells us that small business owners feel better about the economy and the future of their businesses. We are encouraged to see more business owners forecasting strong revenues, healthy cash flows, and increased capital spending over the next 12 months. These trends tell us that small business owners are more positive about the economy, and that optimism is translating into investment in the future of their businesses right now.”
I hope you found this article helpful. Visit https://wellsfargoworks.com/insights/press-release/small-business-optimism-hits-11-year-high to read more details about the Wells Fargo/Gallup Small Business Index Survey. If cash flow is a concern for your small business, accounts receivable factoring may be the solution. Call American Receivable at 1-800-297-6652 to learn more or click here to learn how factoring works.
Are you considering buying office equipment in 2018? As a small business owner, you know that equipment updates are essential if you’re to remain competitive. But investing in fixed assets can also create cash flow problems if the purchase is not funded and timed correctly. Here are some tips to help you properly time and finance your new office equipment purchases.
Prioritize Your Office Equipment Needs
Buying a new or used piece of business equipment can be exciting and that excitement can cloud your judgment. Before you even begin shopping, you should ask yourself (and your employees) the following questions:
- Is the equipment purchase really necessary at this time?
- Will purchasing the equipment prevent you from making other investments, or meeting your daily operating expenses?
- Will the new equipment increase productivity or reduce overall expenses?
- Are the tax advantages to purchasing the equipment?
If you find that the new equipment will really benefit your business, you should explore a variety of funding options including taking out a bank loan or line of credit, and invoice factoring.
Buying New or Used Office Equipment
For small businesses on a budget, there may be times when buying used makes more sense than paying full price for new equipment. Depending on the age and condition, you could save as much as 50% by purchasing used equipment so it’s a great way to reduce capital expenditures. Just make sure you thoroughly inspect the equipment to make sure it’s in good working condition, and keep in mind that in most cases you won’t have the peace of mind that a manufacturer’s warranty can give you.
Consider Outsourcing Instead of Buying Office Equipment
Before purchasing new equipment, consider how much use you’ll actually get out of it. While it might be convenient to own an expensive, laser office printer, is it really necessary for your day-to-day needs? If not, it might make more sense to lease a printer or outsource big printing jobs to a reputable commercial printing company. In short, you should avoid paying for equipment that exceeds your actual needs.
Make Sure You Have Room for the New Equipment
When purchasing large pieces of equipment, make sure you have ample space to accommodate it. The best way to avoid overcrowding your office or warehouse is by making accurate measurements of your available space to determine if you have enough room for the new equipment.
The best way to do this is by creating an accurate, scale drawing of your space. A simple pencil drawing with measurement annotations will do the trick. For greater precision, you might want to use one of the many free design tools available online. Check out this article for a list of options.
I hope you found this information helpful. To learn how our flexible factoring solutions can help your business grow, call American Receivable at 1-800-297-6652 or click here for a free quote.
The New Year is the perfect time to evaluate if you are getting the most out of your invoice factoring company.
Are you already factoring your invoices as a means of improving your means of cash flow? Yes? Congratulations! You are on a great path to growing and keeping your business successful.
Now, do you know if you are getting everything you deserve from your factoring company? If you paused, maybe it’s time to take a look at evaluating your terms with your current factoring company.
Factoring Company Protocols and Benefits
Each invoice factoring company has different protocols. To understand your benefits correctly, it is important to know what your factoring company is required to tell you per your contract. Below are some questions to ask yourself to determine if you are getting what you deserve.
• Is your contract transparent?
• Are there any hidden fees?
• Are you required to factor all of your invoices or are you allowed to pick and choose?
• Do you have a monthly minimum that you must factor?
• Are you receiving the best rate they can offer based on the volume and value of your invoices?
Why Choose Us for Your Invoice Factoring?
Working with a company like American Receivable, that is transparent about all of the costs your contract will allow you to capitalize the most for your business and provide a positive relationship with your factoring company. Click here to learn more about American Receivable Corporation.
You may also call us at 1-800-297-6652 or click here to receive a no-cost, no-obligation quote. In most cases, we’re able to provide funding in as little as 24 hours.
Today, many companies are outsourcing a large portion of their hiring activities to staffing companies. If you are a staffing company, you know that it while you might be able to cover your basic overhead, you can also run into cash flow problems waiting for a client to pay.
Working with a factoring company can help you and your business be successful without having to stress about your cash flow.
Benefits of Staffing Factoring
Receive Instant Cash
Often times, staffing companies can wait up to 120 days to be paid by their clients. These extended payment terms leave the staffing company crippled- without enough cash to make their next payroll! With factoring, you will be able to turn those invoices into cash immediately giving you the capital to continue to grow your business.
Staffing factoring allows you to maintain a constant cash flow to cover payroll thus allowing you the freedom to go after the bigger contracts and projects.
Take Advantage of Opportunities
Loans take time to get approved and often are laced with terms that do not fit your needs. Factoring is a quick and affordable solution that gives you the financing to take on those new opportunities.
Invoice factoring is an efficient way for staffing companies to stay successful and competitive. Selling your invoices for cash now instead of waiting for the client to pay will allow you the freedom to grow and improve your business in today’s lucrative market.
Interested in learning more about staffing factoring? Give us a call at 1-800-297-6652 or click here to submit an online application and receive a free quote.
We are excited to announce that our new and improved website is now live! Our new site has a fresh new layout for easier navigation for prospective and current clients as well as brokers. Our goal is to provide you with a quick and easy way to learn not only about our company, but also the financial solutions we offer. Along with these new features, we also made it quick and easy for prospective clients to receive a free quote and apply online.
We hope you find our new website to be user friendly and helpful for all of your financial needs.
Owning and operating a small business takes dedication and hard work.
As 2017 comes to a close, it’s a good time to take a look back at the business practices that worked well, and which ones need to be improved on.
Here are four tips to help you make the most of 2018.
Focus on the most important thing(s)
One of the biggest challenges with running a small business is distraction. This often stems from the need to wear many hats. Since you may not have the financial muscle to employ top talent, you’ll often find yourself being the accountant, lawyer, and marketer of your business at the same time. Studies show that such “multitasking” can seriously derail your progress and possibly even put you out of business.
So, in 2018, stop being a jack of all trades and put all your energy on what you set out to do. If need be, bring in other people with requisite skill sets to help in those other areas.
Get the right tools for your small business
Aside from hiring skilled talent to help you run the day to day tasks, in the upcoming year, something else that will help you accelerate your growth is using the right tools. Tools here refer any software or hardware that can help you solve problems more easily or cost-effectively.
If properly used, these tools will increase your efficiency and help you reach your goals faster. Remember, the keyword is – right.
Pick only what you need; tools that can truly help you grow. If you have to, find an expert to help you pick out the most appropriate tools.
Outsource non-profitable activities
In some cases, it may make more sense to outsource certain activities than to keep them in-house. If slow-paying customers are creating cash flow problems you may want to consider partnering with a Factoring company.
Accounts receivable factoring, also known as invoice factoring, allows you to receive immediate cash for your outstanding invoices in exchange for a small fee. Depending on your particular circumstances, factoring may be an attractive alternative to time-consuming in-house collections.
Stay ahead of the game
Lastly and most importantly, don’t let anything fall behind. From your finances to technology and talent-wise, don’t be left behind in 2018. The digital world is evolving at a dizzying pace. Things change pretty much every day. In 2017, for example, we saw a lot of movement in payment technologies. Social media too witnessed a lot of changes.
If you want to fast-track your growth in 2018, you can’t let such movements escape you. Collect data at every step and use this data to manage your finances and adjust your priorities.
We hope you found these tips helpful. Call or email us to learn whether invoice factoring is right for your small business. You may also click here to submit an application for a no-cost, no-obligation quote.
You need new business equipment. But, you’re wondering whether it makes more sense to lease or buy the equipment. Which is the better option and why? It all depends on circumstances. Sometimes it makes more sense to lease while on other occasions, you’d be much better off buying.
Below is a brief summary of the pros and cons of each option to help you make an informed decision.
Leasing Business Equipment
Advantages of Leasing
- Lower initial expenses: This option allows you to acquire assets with minimal initial expenses.
- Flexible terms: Leases are also easier to obtain and have more flexible terms compared to outright purchases.
- Upgrade equipment more easily: Leasing is one of the best ways to deal with the problem of obsolescence because updating equipment is solely the responsibility of the lessor.
- Leases are tax deductible: You’re allowed to deduct your lease payments on your tax returns as business expenses, effectively reducing the net cost of the lease.
Disadvantages of Leasing
- You don’t own the equipment: Unlike with purchases, leased equipment has to be returned at the end of the lease term.
- Obligation to pay for the entire term of the lease: You’re under obligation to make payments for the lease period even if you stop using the equipment.
- Higher cost: In general, leasing costs more. Monthly payments are always higher than if you were purchasing the equipment.
Buying Business Equipment
Advantages of Buying
- Ownership: When you buy office equipment, it belongs to you. This can be a major advantage if the equipment has a long life.
- Tax advantages: Section 179 of the IRA Code allows you to deduct the cost of certain newly purchased items in the first year.
- Depreciation deduction: Some types of equipment can also be depreciated to reduce your taxes.
Disadvantages of Buying
- High initial costs: Buying brand new equipment requires a lot of money. And, even if you plan to borrow the money, the bank will demand a 20% down payment. Couple this with the many financial restrictions that come with bank loans and you may find yourself in a dilemma.
- Getting stuck with obsolete equipment: This is especially common with high-tech equipment. With technology changing every second, you risk getting stuck with out-of-date equipment just months or years after purchase.
To arrive at the best decision, consider the cost-effectiveness and tax implications of each option, and proceed with the option that best fits your needs and budget.
Are cash flow problems keeping you from upgrading your business equipment? Invoice factoring provides an unlimited source of working capital without increasing your debt position. Call American Receivable at 1-800-297-6652 to learn more.
By: Jack Stieber
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Choosing the right factoring company is an important decision for you and your business. The right factoring company will help you maintain cash flow and grow your business while the wrong choice can leave you with a bigger financial gap than when you started.
Factoring has been around for centuries but has really only come to light as a legitimate source of cash flow for businesses in the last couple of decades. While bank loans are the most common form of financing for businesses, not every business qualifies for a loan large enough to cover their overhead. With invoice factoring, companies are able to maintain a steady cash flow without waiting the extended time for payment. Sounds great, right? But how do you know which company is the right fit for you and your business?
With factoring becoming a popular means of cash flow, there are many companies to choose from. Websites like Top Ten Reviews allow you to search for companies specifically in your industry. So, you’ve found a few that sound like what you need, what’s next?
The most important part of choosing the right company is understanding what they are offering and how their services will benefit you. In the age of technology, most companies have online chat services on their website for quick information, but to receive the quickest quotes and to get a more comprehensive understanding of the business and the employees there, it is always best to call. It’s critical that you are not only boosting your cash flow but are also comfortable with the staff to ensure a strong relationship.
Here are some questions to ask when speaking with factoring companies. Remember, you are interviewing them just as they are interviewing you.
What is the factoring companies application process?
Typically, most companies will have an online application form for you to fill in your information and attach any documents requested. Most common types of information required are: name and age of business, owner information, amount of receivables to be factored, Articles of Incorporation, accounts receivable and payables agings, and profit and loss statements.
As my business grows, does the factoring company have the resources to grow with us?
The purpose factoring your invoices is to allow your business to have the cash to continue to grow. It’s important to find an established factoring company that has the means to support your current and future funding needs.
What are your advance rates and fees?
Depending on your industry, advance rates and fees can vary among factors. Factoring companies make their money off of fees which is a percentage of the face value of the invoice. These fees can range from 0.8%-3.0%. The advance rate is the percentage of the invoice that the factoring company gives you upfront as they await payment from your customer. These advances can range from 75%-90%. It’s important to understand and compare across factoring companies specializing in your industry and the services they offer.
Are there any hidden fees?
Some factoring companies may charge a small fee for an array of different services. Hidden fees to look for include but are not limited to: application and due diligence fees, origination fee, annual fee, chargeback and wire fees and early termination fee. Be sure to also discuss if there is a monthly minimum amount you must factor and if so, is there a fee associated with not meeting that minimum.
Understanding the factoring industry and asking the right questions can lead you in the right direction to finding the right company for your factoring needs and ensuring success and growth for you and your business.
As a small business owner, one of the best pieces of advice you’ll ever get is to never get too comfortable when things are running smooth.
In the same way traffic accidents occur unexpectedly and natural disasters occur without notice, your business can also suffer painful emergencies. When it does, you need to be in a position to protect your business and keep it running.
Having a healthy “rainy day fund” can help you get through those unexpected bumps in the road. Here’s how to get started
Start saving today
Whenever you’re in a position to stash away extra money, you should do it. Even small contributions, made on a regular basis will add up over time. Create a solid savings plan that will act as a reliable backup in times of emergencies. The best way to do this is to set up a savings account and keep it separate from your other business and personal accounts.
Avoid unnecessary and extravagant cash outlays, even when your business is solidly in the black. There’s nothing wrong with rewarding yourself and your employees once in a while, just do not make a habit of it. For your rainy day fund to grow, you will have to avoid any needless spending. Remain disciplined and focused on growing the account and you’ll be glad you did when the need arises.
Consider supplementing your income
Any wise entrepreneur knows that it’s important to diversify their investments. Don’t be afraid to try out other business ideas that you believe can bear fruit. It does not always have to be your own business; you can invest in other successful companies to grow your money. You might also look for ancillary services that complement your main business.
Make the most of the up times
It’s normal for any business to experience highs and lows. Some months you’ll generate more income, and in others, you may have a very profit margin. During the slow times, it might be impossible to make any contributions to your rainy day fund. So it’s a good idea to make larger deposits when your cash flow situation improves.
Save your tax refund
Finally, you may be lucky enough to receive a tax refund from time to time. The best way to use that money is to channel it directly to your rainy day fund.
Consider alternative funding methods
Before raiding your rainy day fund, ask yourself whether the need for extra cash is a temporary or long-term one. If cash flow issues are an ongoing problem, a revolving line of credit or business factoring may be a better solution.
Give us a call at 1-800-297-6652 or visit us online at www.americanreceivable.com to learn more about our accounts receivable factoring solutions and whether they’re a good fit for your cash flow needs.
Running a small business can be tough, frustrating, and requires most owners to wear multiple hats.
While most owners are comfortable being involved in sales, marketing, production and even HR, many feel completely out of their element when it comes to financing. While this is an area that’s typically better left to those with the necessary training and experience there are some basic things that every startup business owner should do in order to keep their company in the black.
Use dedicated business accounts
For your small business to thrive, it’s essential that you’re able to accurately track all of your business income and expenditures. To help you do this, you need to set up dedicated banking and credit card accounts for your small business and ensures there is no overlap between them and your personal accounts.
Have a budget and stick to it
You probably already have a personal budget. Keeping one helps you to prioritize expenses by separating needs from the wants. The same applies to your small business. Having a formal budget helps you prioritize your spending.
Prepare for big expenses
Don’t wait to be taken by surprise just because you underestimated your expenses. When creating your budget, it’s always best to overestimate your expenses a little in order to cover any unexpected cost increases and incidentals.
Be prepared for downturns and bottlenecks
Every small business has its ups and downs. For some, the reason is seasonal factors that influence their market. For others, slow-paying customers can have a negative impact on cash flow. While seasonal fluctuations are easy to anticipate, cash flow problems can arise quickly and unexpectedly. When they do, having an established relationship with a lender can be a lifesaver. If borrowing from a traditional lender isn’t an option, you might consider invoice factoring to get the cash you need to meet your daily operating expenses during the slow times and to invest in new equipment, warehouse space or personnel.
Ask for professional help
Sometimes managing big numbers, accounts and cash flow can be overwhelming. Don’t be afraid to ask for help. Trying to muddle through can be disastrous for your business.
Have alternative investments
Don’t put all your eggs in one basket. Diversifying your investments will boost your savings plan while at the same time providing you with something to fall back on.
Manage your time
You’ve no doubt heard the saying “time is money”. The amount of time you put into your small business is directly proportional to how well and how quickly it will succeed.
Create a savings plan
Finally, the joy of every business owner is when you start making a profit out of your hard work. Being able to constantly and progressively save up is proof that your business is not hopeless after all. What’s more, savings are like water you store to be used in times of drought. A healthy savings account can get your small business through economic downturns, the loss of clients and other unexpected events.
Call American Receivable at about invoice factoring 1-800-297-6652 or visit us online at www.americanreceivable.com to learn more about invoice factoring and whether it’s the right solution for your cash flow needs.