How Sound Financial Organization Can Grow Your Business Fast

Financial planning is a process that can be used by anyone to help them stay on top of their financial goals in life or. In business, choosing a good financial strategy can be the more than just good sense. It can mean the different in growth or stagnation. It is important to consider your business’ overall economical health and goals before making a plan. This can help keep your business goals on track and improve your chances of obtaining your financial desired goals.

There are four ways to build a financial strategy:

Once you’ve decided on your approach, you may then begin the process of gathering the necessary information.

A self-directed schedule is a good method to get started when you are not familiar with the ins and outs of the fiscal industry. It’s a good idea to talk to monetary professional first before creating your schedule.

An online service can also provide support and answer questions quickly. A few of these tools deliver free business credit scores, budgeting suggestions, and basic funding guidance.

A financial plan will let you achieve your long-term and short-term desired goals. It can also assist you to identify and take advantage of certain tax breaks as well.

To determine the needs you have, you need to examine your business’ assets and liabilities, revenues and growth projections over the next 12 months. This analysis should be sure to include your total assets, debts, costs and net profits.

You should also include your company’s future sales and growth forecasts. These kinds of forecasts can help you determine your need for additional funding regardless of whether you’ll need to raise your funding from investors, applying for a loan, or by financing your invoices.

Another main factor that a good financial plan should be to include a debt management schedule and business credit counseling plan.

97.4% of all businesses close within the first 5 years. Simply by paying off your business’ debt, you’ll be able to lessen your risk of potential business failure substantially. 

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LOCs vs Factoring
L.O.C.s versus Factoring

The main difference between LOCs (Lines of Credit) and Factoring is the purpose of the financing. LOCs are mainly used to provide long-term financing for things like working capital, while Factoring is used to convert accounts receivable into short-term financing.

LOCs usually require a certain amount of collateral to be set up to secure against the value, while Factoring does not require collateral. With LOCs, borrowers can draw funds as needed, up to the maximum approved amount, while with Factoring, the borrower only receives the amount of the invoice, but that money is debt free unlike with the LOC for which the money must be repaid.

LOCs can have lower interest rates and fees than Factoring, but with an experienced Factoring Consultant representing your business, these Factoring fees are often dramatically reduced and Factoring is typically more flexible to be used in situations where LOCs are not available. Ultimately, the decision of which financing option to use depends on the borrower’s specific needs and financial situation.

What makes factoring a better choice for your business?

If your business is doing B2B sales on terms, such as Net 30 as an example, Factoring is a great alternative to using a line of credit (LOC) to finance business operations because it provides businesses with faster access to funding. Unlike an LOC, which requires businesses to wait for approval and to pay back the money over time, factoring allows businesses to receive funds almost immediately, and without incurring any debt to the business. Factoring also provides more flexibility in terms of repayment, as businesses can choose when and how much to pay back, depending on their current cash flow. Additionally, there are no restrictions on the types of invoices that can be factored, so businesses can use it to finance a variety of expenses, making it a more versatile financing option than an LOC.

Moreover, depending on certain key factors when applying to the bank, you might find that you business does not qualify for an LOC, or any type of Business Loan product for that matter, without pledging a significant asset, such as the business owner’s home as an example, as security against the funding’s potential for loss. With Invoice Financing setup through a Factoring program, the lender does not incur any debt because the value funded is already secured by the invoice of money already owed to the business for sales made that have not yet been paid for. This relieves a lot of pressure against the threat of potential loss that an LOC or other business loan might have, thereby removing many barriers to funding through the right Factoring program that the LOC cannot look past.

A great example is a startup business.

Startups are often unable to secure an LOC for their business, choking them off from the needed funding when they need it the most. Factoring does not bar against new startups because the business is already producing an owed the money prior to the amount being funded. For this reason, we believe Factoring to be a better option than an LOC when looking for business funding for startups.

For more information and to hire an experienced Factoring Consultant, contact us at Rocket Business Finance today.

At Rocket Business Finance, we provide experienced Factoring Consultants who can help you understand and get the most out of your factoring services. Our team of experts will assist you in understanding the details of the process, and answer any questions you may have. Whether you are just starting out, or are an experienced business owner, our team can help you make the most of your factoring services, help you identify the right deal and Factor to work with, and most importantly, save you money.

Our Clients save an average of $70,000 in fees they would have paid without having had our representation to back them up.

Contact us today to learn more and to hire an experienced Factoring Consultant to represent your Business against the Big Banks. We offer Free, No Obligation, Consultations and charge no service fees unless we find you the right deal. Fill out our Business Questionnaire Form to get started today.

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