Invoice Factoring Blog

Link: http://www.ifgnetwork.com

The United States has apx. 27.2 million small businesses, and of these businesses, only one percent export, according to the Small Business Administration. They also said that every $1 billion of exports creates 14,000 jobs.

Senator Mary Landrieu (D-LA), chair of the US Senate Committee on Small Business and Entrepreneurship, believes this needs to change, and she suggests that small businesses should consider exporting as a way to grow and sustain their businesses during the recession. To get this message out, Landrieu chaired a field hearing before the Senate Committee on Small Businesses and Entrepreneurship in New Orleans last week.

Small businesses that are looking to export but who need additional working capital may seek other financial assistance. The problem is that since banks are wary of lending against export orders, especially in light of the credit crunch, small businesses will need to consider other nontraditional approaches - such as accounts receivable factoring.

Small business financing has become tighter and more restricted suring the recession, so invoice factoring becomes an ever more viable option for business financing. Whether it is to fuel an expansion, buy new equipment, raise immediate working capital or ease cash flow problems, factoring can often offer a practical and instant solution.

Invoice factoring is the process of purchasing commercial accounts receivable from a business at a discount. It is when a factoring company buys your invoices for less than face value and gets paid in full by your customers. The difference between the discounted rate and the face value is the factors profit or incentive for buying your invoice upon submission.