Once again the US Government is making ground breaking advances in taking every measure available to get the economy back on track.
NY Times on March 19, 2009:
DETROIT " The Obama administration moved on Thursday to stabilize the American auto industry by creating a $5 billion fund to support troubled parts suppliers.
The program will provide supply companies with much-needed access to liquidity to assist them in meeting payrolls and covering their expenses, while giving the domestic auto companies reliable access to the parts they need, the Treasury announcement said.
So what does this mean for the industry? Until the details are rolled out is hard to say specifically, but the announcement to get into the Accounts Receivable Factoring business is the latest installment of how far the US Government will go to get the economy back on track.
As I mentioned in a prior article that I predicted that Accounts Receivable Factoring is going to play a major role in the rebuilding of our economy ended up to be quite accurate.
For those of you that are not familiar with Accounts Receivable Factoring it is essentially a Line of Credit for Businesses that use the Invoices that are outstanding as security for the advances received by the company which generated the Invoices.
Most Factoring facilities will advance from 80% up to 90% of the outstanding invoice face value. The cash injection can be used for what ever the company needs the money for " payroll, supplies, inventorywhatever. Once the end customer pays the invoice then the reserve will be paid to the company that factored the invoice less the finance fee.
Most Factoring facilities will charge from 2% to 4% per month depending on the industry, credit rating of the customer and the advance rate,
A counterpart to the Accounts Receivable Financing is Purchase Order Finance. This is essentially Factoring or borrowing against future orders. There are strict guidelines to how this works, but if you sell a product that you purchase in finished condition and then sell it to a third party you may be a candidate for Purchase Order Finance.
There are many different sources of this type of funding but who is best for your company? This is a job best left to a Commercial Finance Broker as they are in the know of who does what and who has the best program and the best rates for you particular circumstance.
Generally speaking, the service of the Professional Commercial Finance Broker will not cost you anything as they are paid by the lender. - 15246
NY Times on March 19, 2009:
DETROIT " The Obama administration moved on Thursday to stabilize the American auto industry by creating a $5 billion fund to support troubled parts suppliers.
The program will provide supply companies with much-needed access to liquidity to assist them in meeting payrolls and covering their expenses, while giving the domestic auto companies reliable access to the parts they need, the Treasury announcement said.
So what does this mean for the industry? Until the details are rolled out is hard to say specifically, but the announcement to get into the Accounts Receivable Factoring business is the latest installment of how far the US Government will go to get the economy back on track.
As I mentioned in a prior article that I predicted that Accounts Receivable Factoring is going to play a major role in the rebuilding of our economy ended up to be quite accurate.
For those of you that are not familiar with Accounts Receivable Factoring it is essentially a Line of Credit for Businesses that use the Invoices that are outstanding as security for the advances received by the company which generated the Invoices.
Most Factoring facilities will advance from 80% up to 90% of the outstanding invoice face value. The cash injection can be used for what ever the company needs the money for " payroll, supplies, inventorywhatever. Once the end customer pays the invoice then the reserve will be paid to the company that factored the invoice less the finance fee.
Most Factoring facilities will charge from 2% to 4% per month depending on the industry, credit rating of the customer and the advance rate,
A counterpart to the Accounts Receivable Financing is Purchase Order Finance. This is essentially Factoring or borrowing against future orders. There are strict guidelines to how this works, but if you sell a product that you purchase in finished condition and then sell it to a third party you may be a candidate for Purchase Order Finance.
There are many different sources of this type of funding but who is best for your company? This is a job best left to a Commercial Finance Broker as they are in the know of who does what and who has the best program and the best rates for you particular circumstance.
Generally speaking, the service of the Professional Commercial Finance Broker will not cost you anything as they are paid by the lender. - 15246
About the Author:
Before you start looking for your Commercial Financing be sure to find qualified Commercial Financing Specialists. Whether you need Accounts Receivable Factoring, Purchase Order Finance, Equipment Loan, a Commercial Mortgage or a Business Line of Credit check here first.
