How can a company in business a short period of time with literally no collateral, no credit history, and maybe even an operating loss capitalize their company on an almost limitless basis … without borrowing and without giving up equity? We do this for business owners every day!!! How? We move the credit risk from them to their customers … and if they’re selling to strong customers they’re sitting on a gold mine so put it into action and use it!
True or False: A huge problem for business owners is how fast his customers will pay them back – END. Disagree? We believe that a sale is a gift to your customer until you are paid … so what do you think?
Envision a company selling $10,000 a month in goods but cannot grow past that. Sadly: They do a great job and a new customer would love to buy $5,000 worth of services/goods from them monthly but they need to pay in 45 days (or how about in 60 days?). This company cannot fill the order because they have to pay their people in seven days and their suppliers in 30 days so they actually have to turn that business away. This goes on endlessly in the United States and worldwide but it can be solved!
HOW? At the end of the year they’ve done $120,000 in sales at 30% profit for a $36,000 profit. Their over head by the way is about 25% of their sales and they paid for that during their normal operation … but now they are turning $5,000 a month away because of cash flow. ENTER THE WONDERFUL WORLD OF FACTORING …
If they factored $5,000 in invoices they could take on this new customer and upon completing their work invoice their customer and cash flow by factoring their invoice. By doing this their payroll gets to the bank weekly and their suppliers are paid in 30 days. The cost? Let’s say it’s 4% for 45 days or $200 per month on the extra $5,000 in sales.
All in for the year they now add $60,000 in sales to their bottom line BUT where they paid their overhead with $120,000 in sales (remember that 25%?) because this is now “through put” sales the profit is now 55% versus 30% on the new sales. That said the sales are now $60,000 extra @ 55% or $33,000 less the factoring fees of 4% or $2400 for a net profit of $30,600. The big question we ask: If you gave me $2400 and I gave you back $30,600 in return would you do that?
Can we help you make those extra margins? Call today at 1-603-818-4778 and ask for me personally: Ernie Brown. I am the principal for Business Funding Northeast and I’ll be only too happy to answer your questions and do what I’ve done for dozens of business owners nationwide: Launch them into the next level!