Factoring and Accounts Receivable Financing Expert Tips

There probably isn’t a day when Canadian business owners and financial managers don’t hear about factoring and accounts receivable financing as a method of financing their business in Canada. Despite its growing popularity and, we can say, relative importance in the Canadian business financing marketplace this financing mechanism is still somewhat understood.What information do business owners need to know in order to assess if factoring, also known as invoice discounting, is a viable transaction? Also, are there mistakes and pitfalls to be avoided when considering this financing strategy?Let’s examine the answers to some of those questions. You can be forgiven for trying to figure out why factoring has increased in prominence from a time when no one had almost ever heard of it! The answer to that popularity is more simply and obvious than you might think, and its simply that Canadian chartered banks are finding it increasingly more difficult to fund accounts receivable (and inventory of course) to the extent that their customers need this financing.When you have a situation where the actual need for financing is acute, and the benefits and flexibility seems significant it is not hard to see the rise in popularity of such a financing mechanism.First of all, 99% of the time, factoring provides your firm with a greater level of borrowing based on your accounts receivable levels. Quite of 90-100% of you’re A/R under 90 days can be financed.So is it all good news? Not necessarily, as we are always meeting with clients that have chosen the wrong type of funding or factoring, and, even worse, find them locked into contracts they cannot get out of. That is uncomfortable for any size firm as you can imagine.As with any newer type of financing the playing field is complex. You can be forgiven for not knowing how many factor firms are out there, how they run, what their own limitations are, and, even to a certain extent, do they in fact themselves have the funding to survive, let along finance your firm. For that reason we cannot over emphasize the need to work with a credible, experienced and trusted professional in this area.Lets talk about some of the nuances, we can call them potential ‘pitfalls ‘also, of picking the wrong factoring partner. For a starter if you choose a firm who itself is not well capitalized, as we said, you might find that the financing commitments made to you cannot be honored. Canadian business has never had to think that the Canadian chartered banks could be ‘out of money ‘but the Canadian landscape is somewhat littered with small and medium sized factor firms that do not have the financial wherewithal to support their funding commitments in all places. That just re – enforces our idea that a trusted industry expert will guide you to the best partner for your firm.Other issues, again, we can call them pitfalls, to look for include:- being locked into a contract- having the total factoring cost, or pricing, not reflected properly in your term sheet- advance rates which don’t make sense relative to the price you are paying for discounting invoices- excessive notification and intrusion with your customers, which is very prevalent in the U.S. model of factoring (Many Canadian factor firms are branches of U.S. firms)So let’s recap. It’s simply that factoring is growing in popularity. It works because it is providing funding where banks often cannot. If you don’t understand who you are dealing with and the various nuances of this type of financing it becomes a burden, not a solution. Investigate this great financing mechanism, but ensure you know what you are getting into. Talking to an expert always helps – that’s just common sense

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What Makes Good Advertising – Easy Tips for Beginners

In the journey of marketing your products or services, what makes good advertising could really be the most important chapter you ever take the time to learn about.Advertising is the unspoken means of communicating to potential customers and is a vital component of major companies. It’s really essential for smaller business owners too and if you can understand how it works, then it can also give you the edge over your competition.Owing to it’s acquired popularity and demand, advertising services is an industry in itself. Nowadays the smart people expect a lot from their advertising promotions because a lot of their market awareness and income comes as a result of this.Numerous small scale and large Industries are dependent on the advertising industry for laying their ground work and promotion. But contrary to popular belief, most advertisements are not successful. In fact, the majority of them may not connect with the potential customer at all, which is a shame because it is lost money,In other words, there are certain rules that one needs to abide by, for creating a good advertisement that is helpful as well as resourceful. What makes good advertising is a skill that has to be learned and is a joy when you get it right. Now, here are a few things for you to consider:Tip #1 – Know who your customers areThe most important rule for advertising is selecting the right target audience. This is mandatory as, the wavelengths and sensibilities of different classes of people are different all over the globe. Be sure to consider who would benefit from what you have to offer and target them. For example, don’t try to sell your cooking product in a knitting magazine just because it is read by housewives.Tip #2 – Understand their needsAn essential part of what makes good advertising is in knowing how your product or service can benefit your customer. For example, your advertisement should always talk to the customer about: A) how they will profit from their investment, or B) why they will look better from taking your supplement, or C) how they will feel healthier from receiving your therapy, or D) why they can be safer and more secure from installing your product etc. This is how to connect with your target audience.Tip #3 – Add credibilityGain confidence from your audience. Support your advertisements with facts, testimonials, statistical graphs, charts and references to make them visually more appealing and believable.For example, suppose you are promoting a weight gain supplement by the company “XYZ”, you need to support your product in a reassuring tone with pictures or proof of previous users who have achieved desirable results from using that particular product.Tip #4 – Grab their attentionWho says cheesy lines can only be used by roadside Romeos? They can also be put to use effectively in adverts in order to make them catchy. You should give those minute details in an advertisement some thought to make it stand out in a crowd of dull, boring adverts that all look the same.Gone are the days of monotonous sing song advertisements. Nowadays, people like them to be creative & cool and this is one of those tricks that you should consider using if you want to know what makes good advertising.Tip #5 – Call a spade a spadeDo not use confusing languages or hidden meanings in your promotion as the prospective customer may not understand it. The first lesson of learning what makes good advertising is that you put it in a simple manner, in a language that people can understand without trying to be too clever.Provide hard hitting facts and list the important benefits first rather than the features, which will enable people to choose your product at a single glance.Tip #6 – Be creativePrepare a resourceful advertisement, but with a twist. Surprise the audience and keep the interest alive with special discounts or other incentives.One must remember that this is also an art form and can only be perfected with the help of correct knowledge. There are some individuals and companies that understand this and advertise on a regular basis and keep their company running at a profit. They know exactly what makes good advertising – and so can you with just a little bit of effort.

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