April 2021


What To Look For In A Factoring Company

One of the top challenges for business, especially small businesses is maintaining a consistent cash flow that can allow the business to thrive and expand. It is normally not on small business owners’ ability to control the collection of accounts receivables that create numerous cash flows.

One of the best things business owners can do to maintain cash flow is to factor their accounts receivable and turn them into instant cash that can be used to run the business. But if you don’t want to add more cash flow pressure on your business, then it is crucial to work with the right factoring company such as Miami Factoring. Here are some of the top things you should look for in a factoring company.

  • Industry expertise

One of the crucial things you should look for in a factoring company is industry expertise. Remember that factoring companies come in various sizes and shapes. When looking for a factoring company, you need to find a factoring company that understands your business model and the industry in which you operate.

Working with such a company will ensure that everything runs smoothly. Of course, you wouldn’t want to spend your precious time explaining your daily business procedures to a factoring company that is not familiar with your company’s model.  This is why it is still advisable to hire a factoring company that already knows your industry.

  • Stability

Another essential thing you need to look for in a factoring company is stability. It is important to secure funding from an established factoring company. Just like it is vital to work with an invoice factoring company that understands your business, it is also vital to work with a factoring company with good reputation.

One of the best ways to ascertain this is by working with a factoring company that is allied to the International Factoring Association [IFA]. Factoring companies that are affiliated with the IFA tend to comply with business practices and code of ethics.  You can check on the IFA website for reliable and trustworthy factoring companies.

  • Pricing

This is an important thing that you must look for in a factoring company. Don’t just rush into talking numbers before you understand what you are getting your business into. You need to understand how the company structures its fees. When the company advances money on receivables, it is basically making a legal purchase of your invoices at a discounted price. The rate can be a one-time flat fee. It can also vary depending on how long the factoring company will own the invoice.

The fees can vary depending on factors, such as contractual commitment, the average size of invoices sold, average monthly purchase volumes, etc. The company may also charge extra fees for their additional services, such as running credit and background checks on account debtors. So before you sign any contract with the factoring company, you need to understand their fees and determine if you are comfortable with the fees.

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How To Get Out Of Debt – Time-tested Tips

Wouldn’t it be a great thing for you to get out of debt or at least reduce it substantially? Well, if you are truly serious about making that happen, here are some time-tested tips on how to get out of debt…

  1. Live Below Your Means

It’s great to give expert advice and show you other tips that will help you reduce your debts. However, if you really want to get out of debt and stay out of debt then there’s one place you have to start…

Your lifestyle!

The simple rule is “make sure you live below your means”. Some people advise that you live within your means but that doesn’t paint the true picture. This because living within your means could be living towards the edge or within a comfortable margin.

To make things easier to understand, you MUST be able to put away twenty percent of your earnings each month as savings AFTER you’ve met all your standard obligations like utility, groceries, insurance, etc.

If you can’t do that then it means you aren’t living within a margin that will allow you to become debt-free and stay so.

  1. Pay A Bit More Than The Minimum

We know things are quite tight and paying your bills on time is tough enough. However, we’d advise that you do a bit more…

Don’t just make the minimum payments on your credit cards at the end of each month. Try to pay just a bit extra. Paying as little as $50 more will help you reduce the interest you pay on each of those cards over time. The simple logic is: The more you pay at a time, the lower the amount you’d have to pay in interest over time.

That’s money saved.

  1. Consolidate Your Debts

You can take out a loan that helps you pay off your debts while consolidating them. All you’ll have to do is make one payment each month usually at a lower interest rate than your various debts.

But while this is a solution that has helped people pay off their debts, it only does if you’ve done the smart thing and have budgeted correctly. By budgeting correctly, we mean that you’ve planned your spending in such a way that you aren’t racking up new debt as you pay off the debt consolidation loan.

Furthermore, a good budget would also mean that you’ve taken steps to ensure that you are able to put away some money in savings. The savings will come in handy if you have to deal with emergencies that might come up while still servicing the consolidation loan. If you don’t have this in place, you’d be compelled to pull out a credit card for such situations and create a vicious circle of debt.

Failure to do these two things might mean you end up going back to where you were in debts before you got the loan or even worse.

  1. Start Shopping Smart

By smart shopping, we mean you should learn how to take advantage of every legal opportunity to reduce your costs while shopping for necessities. Here are few smart shopping tips…

  1. Take advantage of coupons. Yes, you know those help you get savings, but do you use them? And while you use them, make sure you limit such use to items you already have on your list. If you buy unnecessary items just to use a coupon, the savings benefits are lost.
  2. Buy pre-loved outfits especially if you have young growing kids. What’s the point in spending a lot of money on clothes that won’t fit in a few short months?
  • Make a list of your groceries before you step out to shop and make sure you stick to it. Impulse buying costs a lot of money and leads to debt.
  1. Buy A Used Car

Did you know that a brand new car loses up to 20% of its value once you pay for it and drive it off the dealership? Did you also know that you typically pay much more in sales tax on a new car than on a used one?

So how much would those two save you?

Now factor in the following…

The cost of a brand new car vs a used one – A used car could be up to 50% cheaper depending on how many mileage it has on it.

Insurance premium on a new car vs a used one –All other things being equal, you’ll get much lower premiums on a used car because of its current market value.

These all add up and, depending on how well you do shopping for a used car, you can still enjoy most of the features of a new car without paying the high cost associated with it.

  1. Get a Second Job Or A Side Hustle

While your spending habits determine how indebted you are, the amount you have available for the basic things of life is also a big factor. If you have a family of five but earn less than $3,000 per month, you are going to have a hard time living debt-free in the US while meeting your obligations.

So, if it’s something that’s available to you, a second job will help you bring in a bit more. And for those who might not have the time, opportunity nor inclination to get a second job, starting a side business can help.

There are many folks who make over a thousand dollars each month in their spare time freelancing, for example. Explore various opportunities around you and you’d be able to make a bit more.

  1. Boost Your Credit Score

One of the most important factors that determines how good a deal you get across most financial products is your credit score. If it’s high, you’ll attract lower interest on loans, more affordable insurance premiums and be easily eligible for a number of financial products that will help you get out of debt more easily.

If, on the other hand, your credit score is low, you will be expected to put down a larger amount for a car loan, for example. Furthermore, you’ll also be slammed with a higher rate. So if you want to get those savings on insurance premium, loans and other financial products, you just have to do your best to get a higher credit score.

So how do you do it?

Well, there are a number of ways that are time-tested. Here are a few…

  1. Pay your bills on time. It has a big impact on your credit history which accounts for up to 35% of your FICO Score. Late payments impact your score negatively.
  2. Reduce your credit utilization to a maximum of 30%. Your target should be 10%. Credit utilization is the percentage of your credit limit that you actually make use of.
  • Take advantage of your rent payments if you’re a renter. You can boost your credit score by up to 100 points using this method. A good reporting service can help you get the most out your rent payments for up to the past 24 months.
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