Most seafood distribution companies are faced with a constant tug of war between income and expenses. On the income side, most commercial customers can take up to 60 days to pay an invoice. This is a common industry practice where distributors usually offer payment terms to credit worthy companies . On the expense side,  most seafood suppliers expect quick payments. In the end, you have to pay suppliers before your own customers pay you – which leaves you right in the middle. If your company has limited financial resources, this will limit growth. And if this situation is not managed correctly, it could also send your seafood distribution company into a financial tailspin.

One way to manage this cash flow problem is to use business financing to cover company expenses while waiting for customer payments. The problem with this strategy is that obtaining business financing in today’s environment is very difficult. Most lending institutions will often demand that your seafood company have substantial collateral, impeccable financial statements and a long track record of success. Realistically, few small and midsize seafood distributors can meet these criteria. For many smaller companies, a better solution is to use invoice factoring.

Factoring solves this common working capital problem by accelerating your revenues that are locked in slow paying invoices. This provides your company with the liquidity to meet supplier expenses. More importantly, it enables your company to take on new customers without having to worry about their slow payment habits. When used correctly, factoring can provide financial stability and a platform for growth.

Most factoring transactions are structured as a two installment advance on your invoices. The first installment is paid as soon as the seafood is delivered and accepted by your customer – it covers between 70% and 85% of your invoice. The remaining 15% to 30% is rebated, less a factoring fee, as a second installment when your customer pays in full on their usual schedule. Note that your customers do not need to pay any sooner.

One of the advantages of factoring over other business financing solutions is that it is easier to obtain. The most important requirement is that your customers must have good commercial credit. This is critical because the factoring company is using your customers credit as collateral for the transaction. Aside from this, your company must also:

1. Invoice for delivered and accepted seafood
2. Not have serious tax or legal problems
3. Your invoices must be free of liens
4. Have industry experience and a solid reputation

Accounts receivable factoring lines are designed with growth in mind and will increase alongside your sales, provided that the transaction meets all the factoring requirements. This makes invoice factoring an ideal solution for growing seafood distribution companies that have cash flow problems due to slow paying customers.

Managing the cash flow of a chemical supply company can be complicated. On one hand, you have raw material suppliers who are demanding quick payments. On the other hand, your customers usually demand net 30 to net 60 payment terms. Companies that have large financial resources don’t have a problem with the situation because they can use their resources to cover expenses while waiting to get paid by customers. However, smaller companies that don’t have resources can easily run into working capital problems.

The simplest way to solve this problem is to ask customers for faster payment terms. It’s a common practice in the industry to offer clients a 2% discount if they pay 10 days. However, this still leaves your customers in control of your cash flow because they could choose to pay slowly at any time. A better solution to this problem is to use a business financing tool known as invoice factoring.

Factoring your invoices solves this problem in a simple way. A factoring company advances funds to your chemical supply distributorship and holds your invoices as collateral. This provides your company with immediate funding while the factoring company waits for your customers to pay. The transaction is settled once your customers pay in full on their regular scheduled payment date. When used correctly, invoice factoring is an invaluable tool that helps ensure that you always have cash at hand to pay suppliers.

Most factoring transactions are structured as a purchase of an invoice in two installments. The first installment covers about 80% of your qualifying accounts receivable. This installment is given to your company as soon as you customer is invoiced. The second installment, which covers the remaining 20% (less the factoring fee), is given to your company as soon as your client pays the invoice in full.

The most important requirement to qualify for a factoring financing line is to have credit worthy commercial and industrial customers. This is important, because the factoring company considers the credit worthiness of your customers as the most important collateral of your company. Aside from that, your company must also:

• Invoice for delivered and accepted chemical products
• Be free and clear of legal and tax problems
• Have invoices that are free of encumbrances

Most factoring companies will structure a financing line so that it can be flexible and grow with your revenues. Because of this, factoring can be an ideal financial tool for growing chemical supply distributors that have cash flow problems.

Managing the cash flow of an industrial supply distribution company can be complicated at times. On one side of the working capital equation you have your suppliers who usually demand quick payments. On the other side of the equation you have commercial customers who tend to demand net 30 to net 60 day payment terms. This can create a working capital problem for industrial supply distributors who don’t have the financial resources to wait for customer payments.

One obvious way to address this problem is to request faster payment terms from customers. While this can work at times, it also puts your cash flow at the mercy of your clients. They could choose to slow their payments at any time. For many companies, a better alternative is to use business financing to cover expenses while waiting. One tool that has been gaining traction in this type of environment is invoice factoring financing.

Invoice factoring solves this problem in the simple and elegant way. A factoring company acts as a financial intermediary and advances funds to your company using your invoices as collateral. This gives your industrial supply distributorhip access to immediate working capital, while the factoring company holds the invoices until payment. The transaction settles once your customers pay their invoices on their regular schedule. When used correctly, invoice factoring can minimize the impact of slow paying customers on your working capital.

To qualify for factoring, your company must work with credit worthy industrial customers. This is very important because the factoring company is using the paying ability of your customers as collateral for the transaction. Additionally, your company must meet the following requirements:

1. You must invoice for delivered and accepted products
2. Your invoices must be free of liens
3. Your company must not have legal or tax problems

Most invoice factoring transactions are structured as a purchase of your accounts receivable in two installments. The first installment is called the advance and covers about 80% of your outstanding receivables. The second installment covers the remaining 20% (less the factoring fee) and is paid to your company once your customers pay the invoice in full.

One of the most important benefits of invoice factoring is that the line is flexible and can grow with your revenues. Because of this, accounts receivable factoring can be an ideal solution for growing industrial supply companies that have working capital problems.

Unless they have established solid business credit, most small distribution companies have to pay their suppliers relatively quickly. Usually payment is made upon receipt of goods or shortly afterwards. On the other hand, when they sell products to a commercial customer, small distributors usually needs to wait  30 to 60 days to get their invoices paid. Unless the distributor (or wholesaler) has a solid cash reserve, this situation creates a potential cash flow problem where the company can run  out of money while waiting to get paid. There are several things that you can do to minimize this problem.

One solution is to establish a more effective accounts receivable management program that also offers an incentive for early payments. It’s common to offer 2% payment discounts to quick paying customers. Another solution is to try and delay payments to suppliers as much as possible while still remaining within your payment terms. This can be risky and if done improperly could cause your supplier to stop working with you. For many, a better solution is to use business financing.

For many distribution and wholesale companies, getting business financing is easier said than done. Most institutions will only provide a business loan to wholesale companies that can provide spotless financial reports, a solid growth record and plenty of collateral. Few, if any, small wholesale companies can meet that criteria. However, there is a solution that has been gaining popularity in recent years that can improve your cash flow substantially – it’s called factoring financing.

Factoring improves your cash flow by accelerating the money that tied in your slow paying invoices and due to your company. It provides the funds you need to pay critical suppliers, operating expenses and growth opportunities. Invoice factoring works by using an intermediary financial company that advances funds to you based on your invoices from credit worthy clients. The transactions conclude once your customers pay their invoices in full.

The most important requirement to qualify for factoring financing is to have customers with solid credit. It’s OK if they pay slowly, provided that they pay reliably. Another important requirement is that your invoices need to be clear of liens and encumbrances. Therefore factoring works best with companies that have no legal or tax problems.

One important benefit of factoring is that it accommodates the changing revenues that many distributors have. Since the financing line is tied to your sales, it can grow easily provided your customers have good credit. This makes factoring an ideal solution for distributors and wholesalers who need business financing but can’t obtain a conventional financing product.

Most automotive supply companies tend to have  cash flow problems at one time or another. Many of these originate from the business practice of paying invoices on net 30 days. The problem is that thanks to the economy, net 30 days has slowly but surely been extended to net 45 days or  net 60 days and sometimes to net 80 days. This can create problems for smaller auto industry suppliers who don’t have substantial cash reserves and need quicker payments to be able to meet their own obligations.

Many small companies try to deal with this problem by juggling their own expenses and paying their own suppliers slowly. Also, they may try to coax their customers to paying faster by offering discounts for quick payment. While these strategies can work, they don’t always solve the problem and ultimately leave your cash flow at the mercy of your customers.

Another approach is to use business financing to cover any cash flow shortfalls that are created by slow paying customers. One challenge with this approach is that most common business financing products, such as lines of credit (or a business loan), are hard to get. Most financial institutions will only provide them to companies that have a long track record of success, pristine financial statements and substantial collateral. Unfortunately, few small automotive supply companies can meet this criteria. However that does not mean they are out of options thanks to a product that has been gaining popularity in recent years.

Factoring financing solves cash flow problems created by slow paying customers in a simple way. A factoring company advances a payment to your company using your slow paying invoices as collateral. The accelerated revenue provides your company with the liquidity it needs to meet expenses and take new client projects.  This helps relieve the pressure created by slow paying customers.

Most invoice factoring transactions are structured as two payments for an invoice. The first payment, known in the industry as an advance, is provided as soon as you deliver your products to your client. The advance is usually between 70% to 85% of the invoice. Your company gets the remaining funds (less a fee) once your customer pays the invoice in full.

Qualifying for factoring is easier than qualifying for most other business financing solutions. It’s important that your invoices be to credit worthy customers, since they are the main collateral for the transaction. Aside from that, your company needs to be clear of legal and tax problems. The easy qualification requirements and financing flexibility make factoring a great solution for companies that have cash flow problems created by slow paying customers.