Ozarks Capital Funding

I’m no different than most people who celebrate the 4th of July holiday. I always look forward to barbequeing with family and friends and relaxing. But I also spend some time thinking about the state of the union. Last year, I was uneasy because I reflected upon what appeared to me to be more and more intrusion into our lives by the federal government. And that was BEFORE things really went south.

I’m more than “uneasy” this 4th of July. An onslaught of legislation has been signed into law that is meant to impose an exponentially greater role of government in our lives and limit our freedom for generations to come. The “stimulus” bill had to be signed that day or we would be facing enormous peril. We were told by the transparent Obama adminstration that the public would have 5 days to read all major bills before the vote. Not only did that not happen, only a few Senators and Congressmen had the time to read it since it was released the night before the vote! This bill will eventually help quadruple our debt and burden our children and grandchildren. The Cap and Trade bill was narrowly passed by Congress, even though 44 Democrats crossed party lines to vote against it. Obviously these Dems were seeing their political carreers pass before their eyes.

This monstrocity will place yet more taxation on everyone, even though Obama promised not to raise taxes on 95% of us. There are other provisions coming to light. One states that if someone wants to sell their home, federal inspectors must verify that the dwelling is enviromentally sound before it can be put on the market.

Are you seeing what’s happening here? This adminstration had a goal of shoving as much legislation through the pipeline as fast as possible to achieve their agenda of what appears to be outright totalitarianism and total dependency on government. They probably knew they would have some defectors, but as veterans of the Chicago thug machine, they know how to deal with them. They probably also knew that they would possibly lose the House & Senate in 2010. As Raum Emanuel, Obama’s Chief of Staff said, “you can’t let a good crisis go to waste”. Straight out of the Saul Alinski handbook “Rules for Radicals”.

Are you getting it? These people are scary but very smart. They know they have the media on their side (for the time being anyway), so they’re trying to attack and destroy the concepts and precepts that have made our country great as quickly as possible. What can we do? Get involved, let your voice be heard, and elect only those that will commit to repeal as much of the socialistic agenda as possible.

When a potential client has submitted an application to a factoring company, one of the fist things they do is a lien search.  They do this because in most cases, the client’s pool of accounts receivables are the only protection or collateral they will have.  Therefore, they must have a clear UCC filing.  This filing gives public notice that the lienholder has filed a security interest and will take possession of the asset in the event of nonpayment.

In order to avoid delays in funding, the business owner should find out beforehand if their receivables are encumbered.  If the receivables are pledged on a term loan, line of credit, or other obligation, the company may need to pay off the debt from the first factoring advance.  Factoring companies work with banks all the time to get the lien released.   Sometimes the bank will release the UCC filing for a partial payment on the loan if other assets are part of the collateral base.

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Many dental practices, like a lot of other business sectors, have had a tough go of it in 2009. The recession has caused many to postpone their dental work, particularly elective procedures. This has tightened up cash flow and the problem is further magnified by the time gap between the date of service and the actual receipt of payments by dental insurance companies.

Dental invoice factoring allows the practice to monetize this unproductive asset by receiving an infusion of cash at the time of service. Typical advance rates are between 75% and 85% of the expected net collectible amounts and the cash is wired to the practice’s bank account within 24 hours after the invoices are submitted.

The receipt of cash allows the dental professional to make payments in a timely manner, receive vendor discounts on supplies, or even take a much-needed vacation.

Can your practice benefit from an infusion of cash? Complete our online application to get the process started today.

We strive to provide relevant and timely information to those business owners and decision makers who are either considering using invoice factoring to generate working capital or are wanting to make the most of the relationship they are in.  We have recently developed an easy to read e-book that touches all bases in regard to accounts receivable factoring.  This handbook, entitled “Accelerate Your Cash Flow With Invoice Factoring“,  delves into the following areas:

When a factoring company advances funds to a client for a customer’s invoice they have submitted, they are taking a lot of risk.  The risk comes from the possibility that the invoice may not be paid.  Factoring companies must take steps to mitigate that risk or they will be putting their own longevity in jeopardy.

At the onset of an invoice factoring relationship, the client submits a master list of its customers.  The factoring company checks the credit standing of each customer through a variety of resourses such as Dun & Bradstreet, Experian, and quarterly reports if the customer is a publicly traded company.  If a customer has a poor history of making timely payments on invoices, that customer’s invoices may be ineligible for factoring.   The same may be true for customers who frequently dispute the quality of the goods or services provided.

One of the benefits of accounts receivable factoring that is not available with conventional bank loans is the credit screening function.  Most reputable factoring companies offer this service, which can result in a major improvement in profits and overall financial health for the client.

Would an infusion of cash take your business to the next level?  Fill out our quick online application to get the process started.

When business owners who have been turned down by their bank for a working capital line of credit, they oftentimes look for alternatives rather than give up the search.   Although accounts receivable factoring has been around for centuries, many owners and financial executives aren’t educated as to how it works.  When a factoring company receives an application and it appears the applicant is a good candidate for an invoice factoring relationship, they will issue an initial proposal called a Letter of Intent (LOI).  Subject to due diligence, the LOI specifies the proposed term of the contract, advance rate, and factoring fee stated as a percentage of the amount of invoices factored.

The last component of the LOI, the fee structure, is often a cause for concern for the potential factoring client.  The truth is that factoring is more expensive than traditional bank lines, although they are two different ptoducts.  We have outlined the differences in prior posts, emphasizing the additional services factoring companies provide to their clients.  But the cost of the financing is of primary importance to those who can’t get a bank loan and are considering using factoring to finance their company’s growth or survival.

When business owners geta proposal that states the factoring fee will be 3% per thirty days, many will shut the door immediately because the cost is too high.  We would encourage decision makers to not reject factoring out of hand because of the cost.  Instead, a deeper analysis should be conducted to compare the fianncing cost to the opportunity cost of NOT moving forward with the arrangement.  If there is no appreciable difference between the two, then it may not be worth it to move forward.  But if factoring provides the funding needed to get a new customer’s business or launch a new product line, the incremental profits may well indicate that the high financing costs are well worth it.

Start the process today with our online application.

Many pain management groups, imaging centers, and other healthcare providers give care to individuals who are uniinsured and victims of personal injury accidents.  For these practitioners, the dilemma is that they usually won’t get paid until the case settles, and that can often be years down the road.  But a new type of financing, called medical lien funding, gives the provider much-needed advances on these special types of medical receivables.

When a medical professional decides to take a personal injury case, they typically receive a medical lien.  This gives assurance that they will ultimately get paid when the patient receives money when the case is settled either in or out of court.  But in a situation where there exists a significant mix of these PI cases, cash flow can be disrupted.  Medical lien funding provides relief to these providers by giving them advances on billings immediately after the care has been provided.

When a company offers a credit relationship to a customer, they are in effect playing the role of banker.   The company has already used their resources to either manufacture a product or provide a service.  By offering credit, they won’t realize the fruits of their labors for quite some time, sometimes up to 90 days.  In other words, the accounts receivable that has been generated is a dormant asset.  Invoice factoring is a great way to convert a non-productive asset to one that can provide much-needed working capital for the business.

When a client decides to enter into an agreement to factor their receivables, they will have access to immediate cash.  In fact,  most factoring companies will advance up to 85% of the invoice amount in cash and wire it to the client’s bank account within 24 hours.  The remaining amount, called the reserve is remitted back to the client when their customer pays the bill.  The factoring fee, which can vary anywhere from 2% to 4% per month, is deducted from that remittance.

Cash flow is the life blood of a business and accounts receivable factoring offers a great alternative to bank lines of credit, which are very difficult to get these days.

Invoice factoring companies are in business to help companies in need of working capital to monetize their accounts receivable.  They do so by advancing funds (usually 75% to 85%) on those receivables which gives the client instant cash to pay bills, take on new contracts or even take advantage of vendor discounts.  As a result of the advances, the factoring company now has exposure and must take steps to protect its interests.   One way it does this is to demand what is called a “first position” on the client’s accounts receivable.  This means that the factor can retain rights to the A/R  if things go south for the client.

But what if the client doens’t pay it’s 941 taxes?  These are obligations to the Internal Revenue Service relating to taxes wihheld from employee’s paychecks and the employer’s share of Medicare and Social Security taxes.  The IRS typically will file a lien against the company’s assets in this situation, and their lien always takes precedence.  That would leave the factoring company greatly exposed.  That’s why clients are typically asked to fill out IRS form 8821.  This form allows the factoring company to receive a copy of any correspondence or notices that have been sent to the client.

If the factoring company finds out that the IRS is placing a lien on the client’s accounts receivable, they can either halt future advances or, as is common, work out a payment plan with the IRS to fund the delinquent payroll taxes from the advances.  It is important that filing out the 8821 form is typically part of the application process.