What is Invoice Financing and is it the Right Choice for My Business?

Invoice financing may be an option for you if your business is in a cash crunch, yet a surprising number of people don’t know much about this financing option. There are some cases when invoice financing is a much better solution than traditional lending and should be considered if you have immediate needs. Let’s learn more about what invoice financing is along with its benefits. We’ll then share a few tips for determining whether or not invoice financing is the right choice for your business.

What Is Invoice Financing?

Invoice financing is when you borrow money against a customer invoice. You may sell the collection rights to the invoice altogether, or you may borrow money from the invoice financing firm while promising to repay the loan as the client pays you. Invoice financing is also called accounts receivable financing and A/R financing.

Invoice factoring is a form of invoice financing. With invoice factoring, you’re selling your invoices to the factoring company. You’ll sign a contract giving them the rights to pursue the money you’re owed. With invoice financing, you receive the loan from the invoice financing firm, but your clients continue to only deal with you. One of the benefits of invoice financing is that your clients don’t know that you’re experiencing revenue problems, though that’s not the only benefit.

The Benefits of Invoice Financing

Invoice financing doesn’t depend on your credit. Instead, it depends on the creditworthiness of your customers. That means a business on the edge of bankruptcy will pay the same fee for invoice financing as a business with good credit.

Invoice financing can give you capital that is currently locked up in payables so you can pay your own bills. Then your own cash flow isn’t crimped by big businesses taking their time to pay what they owe you.

You have greater flexibility with invoice financing than other options. For example, you can choose which invoices to borrow against. And you can choose when you borrow against the invoice’s value. This gives you more control over your cash flow.

Your personal and business credit isn’t affected if the customer doesn’t pay their bills. Furthermore, the rates you’re charged are not affected by your credit score or bill payment history.

You don’t have to mortgage your home or business to raise much needed money. And invoice financing is an option if you have slow-paying clients but no other assets. For example, invoice financing is an option for marketing firms, law firms and consultants who only sell their services.

What You Need to Know Before You Apply

With invoice financing, you can get anywhere from 50 to 95 percent of the invoice amount. This percentage will depend on how old the invoice is, the creditworthiness of the customer and the general odds of the invoice being paid in part or in full. However, costs and terms of invoice financing vary between service providers. For example, lenders like Advanced Point Capital offer a variety of options. They generally require you to have a set amount a month in accounts receivable, however, they might make an exception. So, don’t hesitate to try even if you don’t think your business meets the minimal requirements.

Conclusion

Invoice financing is an under-utilized financial option for small and mid-sized businesses, and It has a number of benefits that you can’t afford to ignore. Make sure that you consider it and see if it would be the best option for your situation.

Unsecured Business Loan Vs Secured Business Loan

If you are one of those smart people who have finally made it to the entrepreneur level, you must have found that it’s not easy. It requires a lot of tough decision making. From the type of business to production methods, hiring and firing there are a thousand matters to be resolved. In all the hype you cannot just forget finance. This is because it is the crux that holds your business together. You need it to keep your business running. But most businesses usually do not have enough capital to self-finance so they have to borrow. And the best and most common way to borrow is through loans.

However, borrowing itself is a complex decision. This is because the vast array of options makes it quite confusing especially for those new it. You can easily make the wrong choice and end up with a loan not suitable for you. So if you are thinking of applying for a loan to finance your business you must learn the basics. You have to at least contemplate the different options available such as unsecured business loans and secured business loans. That is why we have compiled a guide that can help you differentiate between these two major types. You can then easily decide the optimal one for your business.

What are secured business loans and unsecured business loans?

You must have often heard lenders and Funding Option teams mentioning ‘security’ for loans. You might not have understood it before. But it is a simple idea. It is a crucial thing that distinguishes between secured and unsecured business finance. So we will first look at what these loans truly are:

Secured business loans

These loans are backed by security. This in simple layman language means, that they are guaranteed by some valuable items belonging to your business. These lending are called are secured because the items that you have presented as collateral, act as a security if you fail to pay back. These loans are also known as asset-backed finance as they cannot occur without the support of business assets. These assets usually are tangible things such as property, vehicles, machinery, etc. But these loans can be complex as well. They can be secured through accounts receivable which are known as invoice financing. There are other lending options in it as well such as merchant cash advances that base security on terminal sales.

Unsecured loans

By contrast, unsecured financing has no backed asset. They have a high risk for lenders as they get no guarantee in cases when borrowers defraud them or get bankrupt. They cannot get their money back as they won’t have any collateral to assist it. But these generally have higher interest attached to them to make up for the higher risk. Moreover, these also tend to finance small sums and for a short period so that lenders can be relieved. This is common with mainstream banks who do offer unsecured loans but not above £40,000. Additionally, they are only given to a business with a good history! Gauging the profitability of the business and their payback history, lenders decide whether they should give such loans or not. Sometimes these loans are even based on multiples of turnover based on recent and anticipated financial performance. This acts as hypothetic security. Last but not least as there is more burden on the givers they don’t prefer such unsecured transaction thus you won’t find many willing lenders as well!

The differences between the two:

You can see the obvious difference between the definitions stated above. But there are other distinct features as well. We have formed a table to make it easier for you to compare them:

 

DifferenceUnsecured business loansSecured business loans
Backed byBusiness’s trading positionAssets
RiskHighLow
Time periodShort termLong run
AmountSmall sums of moneyLarge sums of money
RequirementsCredit checksGuaranteed Assets
FeasibilityLowHigh
Approval timeMoreLess
Legal requirementsLowHigh

 

The optimal choice for your business:

As we all know there is not a perfect finance solution for all businesses. As all businesses are different and have varying needs, they cannot expect to use the same type of finance. Even an individual organization cannot use the same type of finance to fulfill all their needs. So there has to be an optimal balance between the two. The right choice will depend not only on your preference but also on various factors. Sometimes you won’t even get the choice of unsecured loans because of your credit history. Most unsecured loans are only given to firms with good cash flow. So if you are a startup this would be very difficult to achieve. Your only remaining option will be secured loans then. In other cases, you won’t have any assets to give as a guarantee, so you will have to bear the high costs of unsecured loans. Moreover, you should also keep in mind the period, amount and purpose you require the loan for. This is necessary because even when you have both options available you will find on more superior over the other based on overall feasibility. For example, you already have too many secured loans on your profile, its best to balance the portfolio with an unsecured loan. If the amount is small and the purpose it is required is short-term then it will be easy to attain and repay them. Even though the cost may be high but it will free you from both the legal hassle and asset requirement.

However, if you require large amounts for longer periods, you will find it difficult and very expensive to find lenders willing to provide unsecured finance. Normally it will require a lot of time as well. No one is ready to take such high risk without background checks. You will have to provide business information like financial performance, and prospective financial statements. Credit checks will also be undertaken which can be bureaucratic and can lead to disapproval in the end. From the lenders’ point of view, the candidates for such loans are only limited. This is because they only prefer a business with extensive trading history, growth potential, and strong financial statements that reflect affordability to payback for such schemes. Unfortunately, this all makes it difficult for early-stage and medium enterprises to prove their worth to gain such loans. So in such cases, it is best to opt for secured loans if you have assets available.

Conclusion

The bottom line is with an increase in loan finance, it is necessary to be cautious. As small and medium-sized enterprise provides the banking sector with $70 billion worth of lending opportunities, they should also benefit from this lending themselves. For this, all business including yours, have to be perfectly knowledgeable to make the right decision. You cannot just rely on one type of finance. You will have to find the optimal one and for that, you have to compare your options. We hope we prove to be helpful here and now you would be able to weigh up the pros and cons of each loan according to the situation!

Tips for Improving Business Presentations

Most business professionals will find themselves giving a presentation at some point in their careers. For some, presentations are a routine experience. Whether it’s a one-off experience or done on a regular basis, giving a business presentation requires the ability to successfully share insights and information to an audience of people. Failing to do so can result in time wasted, lost sales, or worse.

With this in mind, let’s take a look at some of the best ways to improve the potential of business presentations: 

Tell a story

The best way to keep an audience engaged in what you’re saying is to tell them a story. More importantly, it’s got to be an interesting story. Take a look at the information you’re presenting and identify the main characters, the conflict, and how the two interact. Make that the focus of your presentation. What’s more, take the audience on a journey from point A to point B, wherein the characters have undergone change and transition. Introduce problems and provide solutions for solving them. Storytelling is a timeless method of making people interested in what you have to say, making it a go-to technique for transforming a presentation into an adventure.

Show instead of tell

Most people assume a good presentation hinges on what they have to say. However, more emphasis should be put on what they show their audience. For example, rather than explain how a competitor’s website is better optimized for sales, use a capture web page tool to have it available to view when you need it. By accessing the site pages during your presentation, you’re able to show your audience exactly what you’re trying to get across. The findings can be supplemented by your narration, rather than the other way around.

Take advantage of technology

Storytelling has often benefited from advances in technology. For example, the development of photography ushered in the age of motion pictures, which remains the premier method of telling stories to modern audiences. With this in mind, harness the power of technology for your presentation. While your budget probably doesn’t have room for movie production, consider whiteboard animation as a means of providing your audience with a fun little video showcasing the story you’re trying to tell them.

Know your audience

The best live performers are those who can read their audience and act accordingly. What works for one group of people might not succeed with another. Use this to your advantage when preparing your presentation. Does the audience consist of coworkers who know you personally? If so, feel free to insert inside jokes into your presentation. Is it going to be executives from out-of-town? If so, you might want to stick to family-friendly forms of breaking the ice.

Prepare to answer questions

Many people tasked with giving a business presentation make it their mission to explain everything they can, in order to prevent members of the audience from having to ask questions. Not only is this impractical, but it also inhibits an organic form of audience engagement that presenters can use to their advantage. Rather than try and cover every base, engineer your presentation to lead to specific questions, and prepare your answers ahead of time. In the event nobody asks the questions you planned to answer, include the information as a postscript afterthought before concluding your presentation.

Presentations are the fact of life for most business professionals. Even if they’re only an occasional responsibility of yours, the stakes involved typically call for giving it your best. By taking steps to improve the power of your presentation, you’re more likely to reach the goal you’ve set out to achieve.

4 Jobs that Allow You to Make Your Own Schedule

Sometimes you don’t want a typical 9-5 job. Even with modern HR departments and their fancy—and admittedly highly effective—HR platforms, you might not want to deal with the stress of the classic hiring process. All those phone calls, interviews, and drug tests. 

You would like the freedom to pursue your own passions and your life outside of work, but also want work that is fulfilling. Maybe you pursue another passion part-time and need job flexibility. No worries, there are many different kinds of work that allow you to create a schedule outside of the standard work-day that works for you. 

Here is a list of 4 jobs that allow you to make your own schedule. 

Freelance Writer

If you have strong writing skills, and a background in marketing or another specific field, you may want to consider being a freelance writer. Many marketing companies look for a content writer to help them write articles for their clients. Most articles are 500-700 words, and marketing companies typically pay per article. Or, you could even ghostwrite. People often look for others to help write articles, blogs, memoirs, or other content. 

Freelance writing is wonderful because you can write at any time, at any place so long as you meet the deadline. You can look up writing gigs on Craigslist under the writing category to find a gig that best suits your creative and financial needs. 

Eyelash Technician

If you are interested in aesthetics and helping people look their best, you might consider training to be an eyelash technician through an eyelash extension course. Many courses offer eyelash technician courses online, or in-person. Search for some eyelash technician classes near you. Typically, in-person courses will be available in most big cities. 

However, if there are no available in-person courses, considering looking at eyelash technician certification online. You have plenty of options for helping others feel their personal best. This is also true for those who are extremely detail-oriented and enjoy scheduling their own lives. 

Private Tutor

Consider private tutoring if you feel confident in a certain academic subject, music, and the like. You can become a private tutor through some kind of studio or academy, or you can freelance private tutor. The hours are extremely flexible, as you get to decide when, and how, you work. Try reaching out to people with children still in school, who need help in a particular subject such as history or math. Or, consider your own personal talents and see what niche markets there may be to educate others–all for pay. 

Dog Walker

If you have a love for animals and light exercise, why not consider being a dog walker? You can look at dog walking companies to see if there are any availabilities in getting a job. Dog walking is extremely fun if you particularly love dogs, and want to get some casual exercise in your day. If you don’t want to go through a company, reach out to friends and family who may work during the day, and need someone to check in on their pooch to make sure they get adequate exercise. You can make your own schedule, and find out what approach works best for you. 

These are just a few options to work while having freedom in your life. Look at these jobs that allow you to make your own schedule, and find whatever works best for you! 

The 1031 Exchange Timeframe: A Guide for Businesses

Investing in real estate seems like a great way to build wealth. There are dozens of stories that still tout real estate investing as the best way to make money.

At the same time, there are a lot of unknowns and a lot of risks. There are also capital gains taxes and other tax rules to navigate. Those taxes could eat up a good percentage of your profits.

You can use a 1031 exchange, but you have to do so within the rules and timeframe. Read on to learn more about this option and the 1031 exchange timeframe so your transactions are successful.

Why Use 1031 Exchange?

When you sell a real estate property, there’s a good chance that you’ll sell it for a price that’s higher than what you bought it for. Housing prices have been going up over the last few years, making it likely that you’ll see a profit.

That profit is called capital gains.

The IRS requires that you pay taxes on capital gains, whether it’s for a real estate investment, stocks, bonds, or artwork.

How much taxes you need to pay depends on how long you hold on to the asset and which income tax bracket you’re in.

If you only hold on to a property for a year, the capital gains will be higher, up to 37%. The capital gains maximum tax rate is 20% for assets held for over a year because it’s considered to be a long-term investment.

The IRS code has a section, called section 1031 that allows you to defer capital gains taxes for real estate sales. You roll the proceeds of the sale of your property into another property.

1031 Exchange Timeframe and Rules

A 1031 exchange might seem like a great way to avoid taxes. You only get to defer taxes, not avoid paying them altogether. You would have to keep buying replacement properties if you wanted to avoid paying taxes altogether.

Think of a 1031 exchange as a tool that you can use to lower your tax burden. You can be strategic about when to use it and when you should realize the capital gains and pay taxes on them.

In order to make a 1031 exchange work, you have to have the transactions meet the IRS’ requirements and all within their timelines. Here are the main rules and the 1031 timeframe.

Property Must Be Like-Kind

The first rule to know about 1031 exchanges is that the properties have to be like-kind. There is a lot of leeway around this. You can have an empty lot and exchange it for a multi-family home.

The value of the properties does need to have a similar value or the replacement property has to have a higher value.

You might be wondering why you haven’t heard of this option as a homeowner who’s bought and sold properties. A 1031 exchange only applies to properties that are for business or investment purposes only.

A residential property does not qualify, like your primary residence or vacation home.

1031 Exchange Timeframe

The 1031 timeline is often the most challenging part of the entire transaction. You need to make sure that you understand when properties need to be identified and purchased and file the paperwork with the IRS.

When you sell your property, the timeline begins. There are 45 calendar days to find a replacement property. You then have 180 calendar days from the sale of your property to close on the sale of the replacement property.

If you purchase sell a property and April 15th (or whichever day is Tax Day) falls within the 180 day period, you have to complete the purchase by April 15th.

If it’s impossible to close the deal in a shorter timeframe, you can file a tax extension. If you owe other taxes, you still have to pay what you owe by April 15th. If you file an extension and pay your taxes later, you will be charged penalties and interest.

You Can’t Do a 1031 Exchange by Yourself

As you can tell, there are a lot of potential issues with a 1031 exchange. If you miss any of the deadlines, you will have to pay capital gains taxes.

You have to use a firm, or a person called a qualified intermediary. They are the holders of the proceeds of the sale of your initial property and help you handle the paperwork required.

The thing to remember is that they handle the money. The moment any funds from the sale of the property are in your hands, you have to pay taxes on them.

What Happens When You Want to Exit Real Estate?

For many property owners, they’re doing the maintenance and management of the properties themselves. Being a landlord is challenging.

At some point, you’re going to want to get out of real estate. Do you sell your properties altogether and pay capital gains taxes?

There may be a way to realize the benefits of a 1031 exchange, retire as a landlord, and see regular real estate income. That’s through a Delaware Statutory Trust or DST. These reasons explain why you want to explore this option.

Understanding Capital Gains Deferments

Taxes are complicated. They’re even more complicated when you’re dealing with investments like real estate. You can defer your real estate capital gains by leveraging a 1031 exchange. This lets you sell one property and purchase another without paying capital gains taxes right away.

You have to understand the 1031 exchange timeframe. If you can remember 45 days and 180 days, that’s half the battle. If Tax Day, falls in the middle of 180 days, do everything you can to finalize the purchase by then.

Keep checking this site for more great business tips and articles.

3 Reasons Why Your Business Should Transition To Solar Already

It’s no secret the renewable energy market is booming. You’ve seen the ads and I’m sure you’ve read the articles— solar, wind, and hydroelectric power are the energies of the future.

According to the IEA’s Renewables 2019 market report over the next five years, the renewable energy market is expected to grow by over 50%. The largest component of that growth, over 60%, coming from solar.

So what are you waiting for, it’s time to transition your business to solar already. 

Return on Investment (ROI)

In the past, arguments around going green and expanding the use of solar energy were based on moral standings. It’s the right thing to do socially and environmentally. Now, however, things have changed. 

With the increasing efficiency of solar panels, falling costs and a significant federal tax credit, solar is now a solid investment for your business with the potential for significant ROI.  

Until the end of 2019, the Solar Investment Tax Credit (ITC) is worth 30% of your total system cost. After that, the credit falls to 26% in 2020, 22% in 2021, and just 10% for 2022 and beyond. 

Now is the time to invest in solar for your business before you miss out on savings from the federal government.

State and local tax credits are also available in the U.S, depending on your location. With the increased efficiency of panels, falling installation costs and significantly associated tax breaks, solar—now more than ever— is a solid investment for your business.

In the past, payback periods—the period it takes to recoup your initial investment—was almost a decade long for solar installation. Today, companies can recoup their costs on an average of just 8 years. 

Solar now, more than ever, is a solid ROI proposal.

LEED Certification

Getting certified as a leader in going green can be huge for any business owner. Not only is it great for your business’s reputation, but it can help attract valuable employees. 

The Leadership in Energy and Environmental Design or LEED Certification was developed by the U.S. Green Building Council (USGBC) to recognize leadership in environmental responsibility. It is known as the best certification in the industry.

Back in 1993, senior scientist Robert K. Watson of the Natural Resources Defense Council (NRDC) campaigned for and then helped develop the certification as a way to push businesses into sustainability.

Today, the LEED certification is well-respected and can really help a company’s bottom line by attracting new customers and solid employees. 

Easy Financing For Green Energy Production

Perhaps the number one reason to go green now and install solar panels for your business is the ease of financing. Commercial real estate lenders are now offering great deals to install solar panels at small and medium-sized businesses. 

In the past, commercial real estate loans rarely involved renewable energy, but now there are a plethora of options that have led to quality results for real companies. 

While the average commercial lender may avoid situations where banks have refused funding or construction has been halted, many renewable energy lenders are willing to take the risk. This is because they know the ROI and savings from the product make borrowers more likely to make their payments. 

If you are a small business, taking advantage of low rates and quality lenders can help accelerate your business into the 21st century. 

Clearly, now is the time to transition to solar. With tax credits expiring and new innovations driving price reduction in the market the ROI for solar panel installation is better than ever. 

So, what are you waiting for…go solar today!

How to Become a Successful Online Retailer

The one sector that has outperformed all the others is Internet-based retailers, and such is technology today, anyone with basic business and IT skills can become a successful online retailer. If you are serious about making a fortune from e-commerce, you need to take the following aspects into account.

  1. Product Line – There must be a demand for your products obviously, and you need to do your market research to determine the market. Any shopping cart website needs to focus on either natural products, or hand-made, or some other form of personalisation.
  2. Digital Marketing – You do not possess the skills to make your website number one on a search result, but you do need search engine optimisation (SEO), which improves a website’s rankings within an online search. You must attack social media, and your digital marketing partner will compile a marketing plan that delivers results. You should not look at digital marketing as some form of option, because it is not. Simply put, without digital marketing, your sales will be average at best, so invest heavily in this at the very outset.

 

  1. Focus on Customer Service – If your customers can easily purchase items that are of good quality and delivered promptly, your business will grow. In this day of Broadband Internet, shopping cart websites must load at super speeds, and the payment gateways must offer some varied choices, such as PayPal, credit or debit card, or direct bank transfer. Making the buying experience stress free will ensure that your customers come back.

 

  1. Develop with the Industry – E-commerce is quickly becoming the normal way for people to order products, and with super-fast deliveries, the logistics sector covers you completely. You can outsource picking, packing and delivery to a third party logistics provider (3PL), and they can pack your products into your packaging and deliver anywhere in the world. By outsourcing your logistics, you have the time to focus on improving the buying experience, which is the key to long-term success.

 

  1. Determination – There will be times when the going gets tough, ask any successful business owner about the early days and they will confirm that determination is something you must have. This will help you to overcome obstacles, and there will be many, and it also helps if you adopt a positive ‘can do’ attitude, especially with your customers.

The benefits of Success

If, for example, your site was a hit, then you would be on the road to wealth, and for your parents, you can afford a top nursing facility such as Right at Home, the leading Australian care provider that offers many services.

If you have a good business plan, plus the help of a digital marketing agency, there is no reason why you can’t be successful, and by working round the clock for the first year, you will establish your market share and can grow progressively to become a major player.

Spend time on your business plan, and when you think it is as good as it can be, pass it to some business friends to comment on. It is only by sharing your visions and plans that you can discover if they are any weak areas in your business model.

5 Smart Business Proposal Tips to Knock It Out of the Park

Are you preparing for an important business proposal?

Here in the business world, it’s safe to say that an effective business proposal is absolutely essential to gaining clients.

If you’re on the hunt for the best business proposal tips, you’re going to want to read this. We’re uncovering the five smartest business proposal tips to ensure that you knock your business proposal out of the park.

  1. Build a Template

Of course, every great business proposal needs to begin with a great template.

Without a great template, you’re going to have difficulty communicating why your business is worth hiring.

Your business template is the bread and butter of your business. This is where you are going to outline everything about your business model and why hiring your business is essential. This template should be clear, concise and effectively communicate the ins and outs of your business.

It also needs to be just as physically appealing to the eye as it is mentally appealing to the mind of the client. Do you need a hand in creating a successful business template? Click here for business proposal templates for free.

  1. Understand Your Customer

Next, it’s time to research everything to do with your customer.

If you’re going to appeal to your customer, you have to understand everything about your customer. Here, you need to diagnose all of the problems that their business is experiencing. Next, you will outline how your business can work to alleviate these problems and eventually find a solution to solve them.

You need to make a claim for why this business needs your help. Of all businesses that have failed, 42 percent claim that they failed because there was no market need for their business/product. You need to give your clients reason to believe that they are in immediate and significant need of your business.

  1. Present as a Team  

Here in the business world, presenting yourself as a team is often better than presenting yourself as a mere individual.

When you work as a team, your consumer is going to feel that they have twice the manpower on their side. Even when duties are equally divided between team members, the consumer is able to feel greater confidence in your joined abilities.

Here, it’s the age-old mentality that two brains are better than one that makes teamwork appear so promising.

  1. Validate Your Claims 

If you’re going to make a claim, be sure to back up that claim with evidence.

Of course, anyone can claim that they are the best in the business. But, what are these claims when they are not back by evidence? The best way to validate your claims is to provide statistics or glowing testimonials from past clients.

Provide your clients with undeniable evidence that you are the best and that that hiring your services is going to benefit them.

  1. Radiate Confidence

In today’s day and age, presenting a business proposal typically means speaking in front of a group of people.

If the thought of this makes you nervous, you’re certainly not alone. In fact, up to 75 percent of people admit to a fear of public speaking. Even the savviest of entrepreneurs today experience these jitters.

When you discuss your business proposal, present yourself and your words with the utmost confidence. Even if you’re consumed by nerves on the inside, do your best to radiate confidence on the outside. Ensure that you know your speech inside and out and always back up your claims with evidence.

If you’re failing to radiate confidence, how is your client supposed to generate confidence in you?

Business Proposal 

It’s only natural to feel nervous and jittery before a significant business meeting.

But, with these simple yet effective business proposal tips, you can be sure that your meeting will be off to a good start. By researching your client, radiating confidence and working as a team, you’re well on your way to a positive sales meeting.

If you’re always on the hunt for business advice, be sure to bookmark our webpage today!

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