Ozarks Capital Funding

When a business decides to enter into an accounts receivable factoring arrangement, they should carefully review the companies they intend to do business with.  Some funding sources specialize in construction factoring, others in funding medical third-party receivables, while others focus on providing working capital for trucking companies.  Each of these niches has their own set of challenges and it’s important to know which factoring firms are adept in dealing with your industry.

As a professional broker, Ozarks Capital Funding can guide your company through the maze of options available.  We know which factoring companies are a good fit for your business.   With traditional lines of credit from banks becoming more and more difficult to get, invoice factoring is becoming a financing option of choice to provide cash flow for many companies with business to business accounts receivables.

Call us today for a free consultation at (417) 849-7394.

Many brokers who are involved in such areas as real estate, health insurance and service providers, talk to business owners on a daily basis.  In many cases,  these owners share their concerns and day to day challenges of operating the business.   One of those challenges for many businesses is maintaining an adequate amount of working capital on hand to ride out the downward cycle of our economy.  Invoice factoring is a way for businesses to stabilize cash flow and give them a predictable and necessary layer of working capital.   A broker who is aware of the company’s cash flow problems may suggest this form of financing and give us a call.

We have developed several relationships with brokers that are unaffiliated with accounts receivable factoring.  Once they express an interest in working with us, we execute a commission agreement.  This agreement allows 40% of all commissions earned during the life of the contract to be paid out to the rerferring source.   All the co-broker needs to do is provide some basic information about the company to us, such as the type of business, amount of receivables generated per month, and the main contact’s phone number.  We also ask they make the initial introduction.  We take it from there by making sure the application and supplementary information is packaged.  We will keep both the co-broker and the client appraised on the status until the transaction is closed.  We also follow up to make sure the client is happy with the service.

Co-brokering is a good way to receive supplemental revenue and increase customer goodwill.  Call us today at (417) 849-7394 or email us at kenth@ocflink.com to discuss a co-brokering arrangement.

I was on a Webinar with a factoring company I work with last night and representatives of this group confirmed what I already knew: invoice factoring volume is growing at a rapid rate this year. In fact, they said this was by far their best year ever and they’ve been around since 1993.

The reason I wasn’t surprised was because accounts receivable factoring is not a loan. Thus, companies that use it don’t have to apply for the service like they would with a bank line of credit. Excellent credit scores of business owners aren’t important to us. Although we usually require financial statements to be submitted with the application, it’s normally just a way for us to see if the company is in “survival mode”. Personal guarantees on the part of the owners aren’t required, as would be the case with a bank loan.

“But Isn’t factoring an expensive way to acquire working capital?” That’s a question i’m asked all the time. Yes, it is more expensive than bank loans. But the financing is only limited by the amount of receivables on the books. Also, the key decision point is whether or not the company is better off with or without factoring. In many cases, NOT factoring is a lot more expensive than doing it.

We can give you a free quote. Call us today at (417) 849-7394 or click here to apply

The country is focused on the crisis in our financial markets.  It’s amazing how all of a sudden, we’ve gone from an “economic slowdown” to a complete meltdown in the blink of an eye.  Did a series of calamitous events emerge during one week to cause a “perfect storm”?  No.  This problem has been tainting our economic system for several years and has finally reached critical mass.

There is plenty of blame to go around, from Wall Street to Main Street to the federal government.  The root of the problem is the staggering amount of credit given to people and businesses who were not credit-worthy.  Part of the problem was greed on the part of lending institutions for making the loans in the first place with very little underwriting processes applied.  Next came the  investment banks who bought billions of dollars of sub-prime mortgages with little due diligence done.  It is also the fault of people who allowed themselves to become overextended.  Finally, the federal government is to blame for not listening to the warnings of Greenspan and others in 2005 and not taking action, especially with Fannie Mae and Freddie Mac.

An example of how things went bad is my mortgage which was approved in June of 2005 by a local bank.  I trusted a real estate agent who was in cahoots with an appraiser.  The appraisal was grossly inflated, making it appear I was getting a great deal and could make some quick money by reselling the home for a profit.   It was a scam.  But had the bank performed a debt to income ratio, they clearly would have rejected the loan.  Unfortunately for me, it was approved and the mortgage was sold to Countrywide.  Three years later, I’m still living in a house that’s twice as big and twice as expensive as I can afford.  Don’t get me wrong - I take the blame for not doing my own due diligence.  But the point is that the mortgage should have never originated.  Take my situation and multiply it by millions and you’ve got the meltdown we see before our eyes today.

Will we learn our lesson?

With the credit markets in disarray, it’s becoming more and more difficult for a business to get a working capital line of credit from a bank.  That’s why instead of simply rejecting the loan request, the banker can maintain customer goodwill and loyalty by referring them to us.

We work professionally and honestly with our clients in establishing an invoice factoring relationship.   Our policy is to keep the referring source and the customer updated on every step of the process.   Other than typical due diligence costs that the factor requires the customer to pay, there are no other up-front fees.

If you’re a banker with a customer that has business to business accounts receivable and is in need of working capital to grow to even survive, we would appreciate  the opportunity to work with you.  Please call us at (417) 849-7394 anytime.

Many business owners are fearful of utilizing invoice factoring because of stories they’ve heard about its high costs.  Although accounts receivable factoring fees are normally higher than bank rates,  it shouldn’t be rejected out of hand.  If your company is growing at a rate that requires a constant infusion of working capital that the bank can’t provide, it is worth performing an analysis of cash flows and profits to see if factoring can increase incremental profits.

Let’s say your company has the opportunity for a new contract to sell $100,000 of energy drinks to a chain of grocery stores.  You’ve been denied a line of credit at the bank and look to establish a factoring relationship, which will give you the cash flow to pay employees, purchase raw materials and pay other costs incurred in connection with the additional production.   Here’s how you might analyze the situation to see if it’s worth using invoice factoring:

Sales                                                  $100,000

Less:  Cost of goods (40%)                 $(40,000)

Gross Profit                                       $ 60,000

Labor (30%)                                       $ (30,000)

Other Expenses (10%)                       $ (10,000)

Factoring Fees                                 $   (2,500)

(2.5% per 30 days) *

Net incremental profits                  $17,500

*  This is merely an example.  Fees vary depending on the credit-worthiness of the customer, the type of industry , and other factors.

With the above example, would you as a business owner think it would be worthwhile to factor your invoices?

Would you like to get a quote on factoring for your company?  Click here

This is one of those times where I’ve decided to deviate from the normal topic of factoring.  I’m not a fan of the mainstream press.  In fact, I don’t waste time debating about whether or not the press presents a liberal bias.  It’s just a given.  This year seems to be different, however.  In prior years and presidental campaigns, the bias and lack of balance was more subtle.  This year, they might as well carry around a sign that says “Vote Obama/Biden”.  There doesn’t seem to be any pretense about their position.  In  fact, in a recent poll, 5 out of 6 people felt that the mainstream media was in the tank for Obama.

I’m doing better at not getting angry about the bias.  At some point, I realized that there was no relationship between me getting upset and the media becoming balanced.   But I couldn’t  help myself when watching the “fourth estate” throw all journalistic standards and fairness out the window when attacking Republican Vice Presidential candidate Sarah Palin.  At first, I was outraged.  Then I smiled.  It’s fun to watch the liberal press and the Daily Kos nutcases go into complete panic mode.  Sarah Palin is a game-changer and they know it.

It’s ironic that the press has devoted more resources to destroying Palin in the past few weeks than they did in investigating Obama’s questionable close relationships to convicted felon Tony Resko, anti-American bigot Jeremiah Wright, and unrepentant terrorist William Ayres.  In fact, there was no vetting until Fox News played the disgusting videos of Wright’s rants and that was when Obama had a comfortable lead.  Had the press done its job, Hillary Clinton would be the Presidential candidate for the Democrat party, not Obama.

Palin is the real deal, and it’s fun to watch the left scream in pain.  It’s called PDS:  Palin Derangement Syndrome.

I was interviewed recently by Cynthia Wilson of Inside Arm Magazine, an online publication that delves into all facets of accounts receivable management.  We talked about the proliferation of medical accounts receivable factoring and how it has provided working capital for both heatlhcare providers and dental professionals.   Here is the link to the article :

http://www.insidearm.com/go/arm-news/health-care-providers-find-factoring-companies-fill-financing-void

If you’re a doctor or dental professional in need of working capital, click here or call us at (417) 849-7394.

It wasn’t too long ago when working capital loans from a bank were easy to acquire for dentists and other health care professionals.  Those days have changed dramatically.  it’s not that banks don’t loan money anymore.  The issue is the tightening of underwriting standards brought about by the sub-prime lending meltdown.  Minimum credit scores of 685 are common to qualify, compared to low 600’s less than a year ago.  Application-only working capital loans for dental practices are rare.  Now, a practice must provide tax returns, financial statements, and needs to have a track record of profitability.

Many dental practices are opting for a less cumbersome form of financing:  invoice factoring.  With this arrangement, the dentist’s personal credit score, profitability, and personal guarantee aren’t necessary.  The only requirement for dental accounts receivable factoring is to submit legitimate third-party invoices (those paid by insurance companies and government programs).   With factoring, dental professionals submit their invoices for payment and receive an advance of funds rather than waiting  30 to 90 days for payment.  The difference between the amount advanced and the amount actually received is called the reserve.  The reserve amount is paid to the client when the receivable is paid, less the fee charged by the factoring company.

Do you have a dental practice that could use working capital?  Click here to apply.

You see advertisements all the time promising invoice factoring rates less than 1.6%.  When you’ve been quoted a fee rate of 2.75% for thirty days, the natural inclination is to jump to the :”lower priced” factor.  After all, the 1.15% difference in the rate can result in thousands of dollars of savings per year, right?

Unfortunately, the accounts receivable factoring companies that offer these lower than normal fees make up for it by charging OTHER fees such as an origination fee, account maintenance charge, or other auxiliary costs.  I’m not saying it’s wrong to charge additional fees, as long as it is fully disclosed at the outset.  But many bury these costs in the fine print of the contract and that’s not ethical.

I work only with factoring companies that make it clear exactly what the client will be paying and you should too.

Do you need immediate working capital?  Click here to apply.