Contract factoring is a financing option that allows businesses to access cash quickly by selling their accounts receivable to a factoring company. Let’s take a closer look at contract factoring, how it works, what businesses should consider when choosing this financing option, and the benefits of using contract factoring.
What Is Contract Factoring?
Contract factoring, also known as invoice factoring, is a financing method where a business sells its invoices or accounts receivable to a factoring company at a discount in exchange for immediate cash. The factoring company then takes on the responsibility of collecting the payments from the business’s customers.
How Does Contract Factoring Work?
The factoring company will typically advance a percentage of the total value of the invoices, usually between 70% and 90%, to the business. The remaining amount, minus the factoring fee, is paid to the business once the factoring company collects the payments from the customers. The factoring fee is usually a percentage of the invoice value.
What Should Businesses Consider?
Businesses considering contract factoring should take into account the factoring fee, which can range from 1% to 5% or more, as well as the factoring company’s reputation, customer service, and collection practices. They should also consider whether the benefits of accessing cash quickly outweigh the cost of factoring fees.
The Benefits of Using Contract Factoring
Contract factoring can provide many benefits to businesses, including improved cash flow, faster access to cash, the ability to take on larger contracts, and reduced administrative costs.
If you’re a business owner considering contract factoring, contact Dorra Financial Group. Our team of experts can help you navigate the contract factoring process and find the best financing solutions for your business needs. We have years of experience helping businesses improve their cash flow through contract factoring, and we can help you too. Contact us today to learn more about our services and how we can help your business grow.
Opening a franchise is an exciting step for established and new entrepreneurs alike. To help you decide if a franchising opportunity is right for you, this blog goes over some things you can expect.
Not All Franchises Are Equal
Opening a franchise is a big decision, so before diving into franchising, it will behoove you to research until you find a great fit. As you investigate different options, consider these questions:
- Do current franchisees speak positively of their experience with the franchise?
- Are there already competitors established in the area?
- How burdensome are the franchise’s fees?
- Is the parent company profitable?
Since franchise opportunities are available across hundreds of industries, there’s likely a good fit for you. Don’t rush the process of finding one.
Be Ready for Screening
Just as you’ll evaluate different franchisors, they’ll evaluate you, too. You’ll need to go through a franchising application process, during which the franchisor may delve into your motivations, finances, and background.
You’ll Have Ready-Made Branding
Branding is often challenging for businesses, but successful franchises have already figured that out. Through franchising, you can adopt branding practices that have already proven themselves.
You’ll Have Ready-Made Procedures
Another perk of franchising is that the parent company will likely already have procedures you can follow. While you may not be able to flex your creativity as much, you also won’t have to go through a trial-and-error process to figure out what works.
You’ll Have Financing Options
Franchisors often give their franchisees a leg up by providing funding. But if that isn’t available or isn’t enough to cover your franchising needs, you can also approach sources like alternative lenders for additional funds. Some financial products are specifically meant for franchisees, while others are all-purpose funding sources, like lines of credit, that are useful for any business type.
Do you need financing to write the next chapter in your business’s story? Dorra Financial Group would love to hear from you.
It can be said that small business is the lifeblood of the American economy with more than 33 million small businesses currently operating, according to the Small Business Administration. The lifeblood of those businesses is certainly small business financing—the capital needed to operate, thrive, and grow. As reported by Bankrate, 43 percent of small businesses applied for a loan last year. Since a business can’t “nickel and dime its way to success,” the question often arises regarding a large loan such as, “how can I qualify for $500K financing?”
How Can I Qualify for $500K Financing?
Getting a loan isn’t necessarily easy, especially a large loan. It takes careful forethought, effort, and choosing the right financing source to qualify for $500K. Consider these tips:
First, carefully define what you need the funding for and how much you will need.
Second, gather documentation that will be required by most lenders including business financial statements, personal and business tax returns, and bank statements.
Third, find and compare lenders. Understand their lending limits, lending requirements, and financing terms.
Fourth, once you know a lender’s terms, find out if you are eligible for a loan.
Fifth, apply for a loan following the lender’s instructions and then remain actively engaged and responsive during the application process.
Sixth, once lending approval is secured, carefully review the loan documents to ensure that the loan amount, interest rate, and repayment terms are exactly as you understood them. Then sign and return the contract. The process to qualify for $500K financing takes effort.
Sources of a Large Loan for a Small Business
Sources to qualify for $500K financing include banks, credit unions, and alternative finance companies. Other financing means include purchase order financing, borrowing against receivables, unsecured lines of credit, merchant cash advances, and inventory financing.
Seek Expert Financing Assistance
Contact Dorra Financial Group, your trusted commercial lending partner in Atlanta, GA. We offer a wide array of business loans to meet the needs of new and established businesses.
Your online advertising is indeed better when you work with an experienced marketing company, but that doesn’t mean you shouldn’t have any say in it. The more you understand digital marketing and your goals for your online content, the better the finished results will be for your customers. It’s like hiring a catering business for a large corporate event; they prepare the food, but you choose the menu.
What Types of Marketing Are Included in Digital Advertising?
Digital marketing refers to all online advertising. It includes many different types of marketing for your business. Some of these methods are proactive, gathering leads you can follow up on. Email marketing, pay-per-click advertising and social media marketing are like that. Search engine optimization (SEO) helps your web content appear when people are looking for solutions online.
Others are passive, attracting potential clients to your website. Content marketing uses interesting content to get views online and position your business as a good source of information. You might say that people come for the blog articles and stay for your products. Website development is also essential for capturing the interest of visitors.
Why Is Investing Is Digital Marketing Important?
Imagine having a fully stocked store but no lettering outside your business, no sign or business name outside. How would people know about the amazing products you offer? Something similar happens when you want to attract customers online. Even if you have the best website, without digital advertising, no one will find it.
Online marketing is essential for e-commerce. It’s the way you make your business stand out from all the other businesses online. It shows why your brand is unique, what products you offer and how you can help your customers. Smart digital advertising makes an excellent first impression.
How Important Is Digital Advertising for Retail Businesses?
These days, you need online marketing for local customers as well. Whether people are shopping for shoes or groceries, they often go online to narrow down options before visiting the store. The better your digital marketing, the more customers you have and the better your reputation. Your company can get great reviews online and offline, which sends even more business your way.
What Type of Digital Advertising Is Best for Your Business?
You don’t need to choose just one method. Often, effective digital advertising is about using several avenues to reach the largest number of customers possible. Online marketing agencies should put together a customized package for your specific business.
You love the excitement and creativity of being a business entrepreneur. As you continue creating, some of these ideas may evolve into a business idea. All successful businesses have the same origin: They start as an idea.
The Need For Businesses To Be Visible
As your idea becomes a reality and a new business is created, its success must be visible to new customers. There are many ways to promote a new business. These include word of mouth, Linkedin and other social media sites, an email campaign, and hiring a professional business promoter. Another good idea is to write a book about the path you took.
Why Not Write a Book?
Writing a short book, whether it’s an e-book or a paper copy, can have a positive effect on your business’s presence in the world. First and foremost, it helps in establishing you as an authority in your space. Here are a few other ways that it can be beneficial:
- Think of a book as a marketing tool, many others do just that.
- The book will be available for purchase, generating additional business income.
- If it is an e-book, the search engines with pick it up, adding a powerful boost to your business’s key words visibility online.
Turn to Dorra Financial Group
As your fledgling business becomes more visible to new potential customers, you may wish to expand into new product lines or market niches. This is great for your business. At that time you may need funding to ‘get over the hump.”
Contact Dorra Financial Group today. We have a full spectrum of financial solutions to help businesses achieve their new goals as they grow.