Stalled growth plagues four in five businesses, but analysts say most have the necessary ingredients to build a successful company.
HOUSTON, July 15, 2021 – Leading factoring company Charter Capital wants business owners to focus on their growth strategies going into the third quarter. Drawing on McKinsey research, company representatives say just one in five businesses scale, but nearly two-thirds could level up by adjusting their approach. The full report, entitled “6 Business Growth Strategies for Successful Small Businesses,” is now live on charcap.com.
Business owners need to look beyond their brand, products, and services, explains Joel Rosenthal, Co-Founder and Executive Manager of Charter Capital. While these are the building blocks of successful businesses, it’s the growth strategy setting industry leaders apart.
“People are passionate about the businesses they create and often start engaging in all sorts of growth activities at once,” Rosenthal says. “The problem with this approach is that it spreads the business too thin and dilutes resources, so growth in any one area is modest at best.”
To create measurable results, businesses with finite resources must focus on a single expansion strategy at a time, such as market development, market penetration, or product expansion. Once researched and tested, all development activities can then be built around the selected model, serving as a firmer foundation for growth.
“Oftentimes, we see business owners creating goals before they’ve chosen a model or researched the viability of their strategy,” expands Rosenthal. “You need to understand the purpose or methodology before you set goals though. Maybe you can double your sales or increase active customers by 25 percent, but you must do the work beforehand to see where this growth can potentially come from.”
Mapping out end-to-end resources is an essential step too. In addition to identifying the non-negotiable resources required to carry out tasks related to the goal, business owners are encouraged to create a list of helpful resources that will allow the team to work more efficiently, grow the business faster, and address issues along the way.
“Raw resources, supplies, tools, and equipment are generally at the forefront of minds,” Rosenthal notes. “However, funding, especially back-up funding, as well as professional service providers such as lawyers or consultants are often overlooked.”
Invoice factoring can play a key role in business growth strategies contends Rosenthal. When companies need a quick cash injection to kick off their plans or money runs tight during execution, they can tap into their unpaid B2B invoices to get things moving.
Those interested in exploring factoring or obtaining a free rate quote may do so at charcap.com.
Invoice factoring can be a huge help as businesses ramp up, but not all contracts are created equally, specialists say.
HOUSTON, June 17, 2021 – Leading factoring company Charter Capital is urging business owners to explore their funding options carefully as they ramp up post-pandemic recovery operations. With the return of customers and S&P 500 gains leading to greater optimism, it’s easy for still-vulnerable businesses to put themselves in a precarious position, company representatives say.
Those considering rapid funding options are encouraged to read “Important Questions to Ask Before Signing a Factoring Agreement,” which is now available at charcap.com.
Gregory Brown, co-founder and executive manager of Charter Capital, notes that small businesses, in particular, often need working capital injections to ramp up for a busy season. Coming out of the pandemic is similar, though the need is much greater due to the extended closures and economic uncertainty.
“Businesses are stocking up, purchasing equipment, and hiring again, which is a very promising sign,” Brown says. “However, they need cash to do it. Some feel like they don’t have options and, unfortunately, take the first offer they’re given, while others miss critical details in their agreements that will impact their recovery in the long run.”
Brown says business owners seeking funding should be on the lookout for hidden fees and odd fee structures that make it difficult to identify what the final cost will be. Long-term contracts and funding delays can also be problematic.
“Invoice factoring is a no-debt solution, which can give businesses a leg up during the recovery,” Brown explains. “But, even within the industry, there is a wide variety of terms, and the benefits will differ, too.”
Factoring, which is akin to getting an advance on a B2B invoice, is sometimes paired with perks like fuel cards for transportation companies or same-day payment options for businesses across the board. By evaluating these types of benefits alongside traditional considerations such as fees, business owners will get more growth potential from their partnership, Brown notes.
Those interested in exploring factoring or obtaining a free rate quote may do so at charcap.com.
About Charter Capital
Headquartered in Houston, Texas, Charter Capital has been a leading provider of flexible funding solutions for the B2B sector for more than 20 years. Competitive rates, a fast approval process, and same-day funding help businesses across various industries secure the working capital necessary to manage daily needs and grow. To learn more, visit charcap.com.
Unclear terms and obfuscated rates in merchant cash advances can leave small-business owners paying up to 4,000 percent interest and trapped in debt spirals, Charter Capital cautions.
HOUSTON, May 17, 2021 – Leading factoring company Charter Capital is issuing a warning to small-business owners about the dangers of merchant cash advances. Otherwise known as MCA loans, states and the FTC have been cracking down on predatory practices within the alternative lending niche that can leave businesses paying annual interest rates of nearly 4,000 percent. However, Charter Capital representatives say the problem persists and urges small business owners to approach MCA loans with caution.
Those interested in exploring the detailed release are encouraged to read “The True Cost of MCA Loans Compared to Alternative Funding Sources,” now available at charcap.com.
Joel Rosenthal, Charter Capital Co-Founder and Executive Manager, says that the way fees are presented with MCA loans is what makes them so troublesome. “Business owners hear their ‘multiplier’ is 1.5 and they think they’re getting a great interest rate on a loan,” Rosenthal explains. “But, an MCA isn’t a loan and a multiplier isn’t an interest rate. A multiplier is the rate by which the amount of principal is multiplied to calculate the payback amount. When it is converted into an annualized interest rate, or APR, it’s usually well over 100 percent and often into the thousands.”
Rosenthal says this is only the tip of the iceberg for business owners because MCA lenders typically scrape payments off the top of a business’ credit card income as a percentage of the processed payments. That can make it hard to predict income and expenses. Moreover, because MCAs are structured differently, there’s rarely any benefit to early repayment.
“Oftentimes, business owners don’t realize how their deal is structured until the money is coming out of their income. By then, it’s too late,” Rosenthal laments. “They may not be left with enough income to cover their expenses and can easily get caught up in a debt spiral while tapping into additional working capital solutions to make ends meet.”
Thankfully, small-business owners who don’t qualify for traditional bank loans still have options beyond MCAs, says Rosenthal. For example, some point-of-sale providers offer advances with more flexibility and reduced fees for early payoff. Invoice factoring, or advances on unpaid invoices, is also a good alternative to MCAs for those in the B2B sector.
Those interested in exploring factoring or obtaining a free rate quote may do so at charcap.com.
About Charter Capital
Headquartered in Houston, Texas, Charter Capital has been a leading provider of flexible funding solutions for the B2B sector for more than 20 years. Competitive rates, a fast approval process, and same-day funding help businesses across various industries secure the working capital necessary to manage daily needs and grow. To learn more, visit charcap.com.
The invoice factoring company cautions small-business owners to brace themselves, as the economic impact of COVID is likely to cause cash flow shortfalls well into 2022.
HOUSTON, April 19, 2021 – Leading factoring company Charter Capital is urging owners of small and midsize companies to prepare for an extended wave of delinquent payments in the B2B sector. Company officials predict the uncertain economy is likely to cause cash flow shortfalls well into next year. Full findings are available to read in “How Do You Know Your Clients Won’t Leave You with Unpaid Invoices?” at CharterCapitalUSA.com.
The problem is twofold, the organization’s business funding specialists say. Not only are businesses struggling to pay their invoices, but lending sources are tightening up in anticipation of extended hardship.
“Small and midsized companies have always had more difficulty securing vital funding,” explains Charter Capital Co-Founder and Executive Manager Gregory Brown. “They often don’t have the time in business, credit score, or connections it takes to get a traditional business loan.”
“Today’s challenges are even greater and it’ll take time for the economy to recover,” Brown says. With Wall Street Journal reporting a 26 percent increase in business bankruptcies and Business Insider noting 55 percent of temporary closures now becoming permanent, every link in the supply chain is feeling the impact. Slow payments and non-payments are on the rise as a result and the Federal Reserve’s latest survey shows banks are raising the requirements to get loans in response.
“It’s not a question of if you’ll have late payments,” the industry veteran contends, “it’s what you’ll do when it happens.” However, Brown believes businesses that are prepared for slower payments can develop an advantage over competitors and come out stronger in the end.
“Now more than ever, businesses should focus on service,” Brown notes. “Follow up with late payers, incentivize good payment behaviors, and work with customers for a positive resolution,” he advises business leaders. “This builds better relationships and stronger businesses as a result.”
Brown says options like invoice factoring can help reduce the strain of late payments. Charter Capital, which recently announced a new $10 million working capital fund to provide qualified B2B businesses adversely impacted by COVID-19 with invoice factoring at no charge for the company’s initial services, hopes to play a role in the recovery process.
Those interested in learning more about factoring or applying for the company’s funding program may do so by visiting charcap.com.
About Charter Capital
Headquartered in Houston, Texas, Charter Capital has been a leading provider of flexible funding solutions for the B2B sector for more than 20 years. Competitive rates, a fast approval process, and same-day funding help businesses across various industries secure the working capital necessary to manage daily needs and grow. To learn more, visit charcap.com
As an alternative or accompaniment to government aid programs and bank loans, the Fund provides invoice factoring at no charge for initial services.
HOUSTON, March 22, 2021 – Leading factoring company Charter Capital recently announced the creation of a $10 million working capital Fund for small B2B businesses. The Fund will be disbursed on a first-come, first-served basis via invoice factoring at no charge for the company’s initial services to qualified businesses. By accelerating B2B accounts receivable payments and unlocking working capital at a reduced cost, the company hopes to help those hit hardest by the pandemic. Businesses interested in applying can do so at chartercapitalusa.com.
The news comes on the heels of an Atradius release indicating late payments are up 25 percent year-on-year. Without a cash flow accelerant such as factoring, businesses may lack the working capital to continue operations. Factoring further helps businesses by increasing access to cash without taking on debt and serves as a flexible funding solution with an easy qualification process.
Late payments have posed issues for B2B businesses for some time. However, additional delays due to the economy and limited credit availability are proving especially problematic today. An estimated nine million small businesses report being at risk for closure this year per the latest Federal Reserve survey. Industries such as transportation, manufacturing, oil and gas, and services, all of which routinely leverage factoring, are also presently experiencing higher payment delinquency rates and challenges securing credit. These and similar industries are expected to benefit most from the $10 million Charter Capital Fund.
“Small B2B businesses have been underserved by traditional lenders for some time,” explains Charter Capital Co-Founder and Executive Manager Joel Rosenthal. “Many held hope that government programs would keep them afloat during the pandemic, but relief hasn’t materialized in a meaningful way, and businesses are closing every day while they wait.”
In general, factoring is an ideal solution for businesses facing challenges like these because the approval process is quick, most B2B businesses qualify, and funding is fast, Rosenthal notes. However, Charter Capital’s program is unique under the Fund because the charge for initial services is waived, and there’s no obligation to continue factoring after the term concludes. Small business owners can tap into the program, pay nothing to secure a portion of the $10 million Fund, and use their factoring cash to cover anything they wish, from ongoing expenses like payroll to things like purchasing PPE or adapting their business to meet social distancing guidelines.
“We’re proud to play a role in the health of small businesses, especially at a time when so many are struggling,” Rosenthal says.
Participation in the program is subject to Charter Capital’s terms and conditions. Businesses interested in learning more or applying are encouraged to visit chartercapitalusa.com to request a quote.
About Charter Capital
Headquartered in Houston, Texas, Charter Capital has been a leading provider of flexible funding solutions for the B2B sector for more than 20 years. Competitive rates, a fast approval process, and same-day funding help businesses across various industries secure the working capital necessary to manage daily needs and grow. To learn more, visit charcap.com.
In today’s economy, business owners are all too familiar with the struggle to find the necessary capital to meet their operating needs or to finance business growth. While traditional small business financing options (such as business loans and lines of credit) are increasingly difficult to attain, invoice factoring has significantly less stringent approval requirements. This is why many business owners, especially owners of small businesses and startups, turn to invoice factoring companies for a financing solution. Is invoice factoring right for your company?
Accounts Receivable Factoring Boosts Business Growth
Invoice Factoring (also known as accounts receivable factoring) is the selling of outstanding invoices (accounts receivable) at a discount to a factoring company that provides immediate cash to your business. Your business receives a percentage of the invoice value upfront (known as the factoring advance), and the factoring company will take care of collecting the invoices for you. The factor will refund your business the remaining balance once all your clients have paid (minus a small factoring fee known as the discount rate).
Usually, the value assigned to the receivables depends on their age (i.e., a more current invoice will be worth more). Generally, invoice factoring is also known as accounts receivable financing, accounts receivable factoring, or accounts receivable funding.
How Does Factoring Work?
With invoice factoring, you are selling control of your invoices (accounts receivable), either in part or in full. The process works as follows:
In the normal course of business, you provide goods or services to your customers.
Your company invoices your clients for the goods or services they receive.
A factoring company purchases your open invoices. Once the invoices are verified as valid, the factoring company pays you a percentage of the invoiced amount immediately. This percentage is typically between 80 and 90%.
Customer payments are made directly to the factoring company. When necessary, the factoring company will chase invoice payments.
Once the factor has received all the payments from your clients, they will pay you the remaining invoice value, minus a small fee known as the factoring fee.
The Benefits of Invoice Factoring
Immediate increase in working capital: Factoring releases the cash a business typically has tied up in accounts receivable and makes it available for paying expenses or for funding growth.
Predictable cash flow: Eliminate the burden of waiting for payments from customers. Instead of waiting 30-90 days, a business can factor in its unpaid invoices and get paid immediately.
No new debt: Since factoring is not a loan, it doesn’t appear on the balance sheet as debt, nor does it negatively affect your credit score. Instead, it appears as more cash and fewer accounts receivable.
Offer better credit terms: Offer customers better payment terms without creating business cash flow problems. Normally, when a business factors their customers’ invoices, they receive cash right away regardless of the terms granted to their clients.
Go after big accounts: Offer credit terms demanded by large, slow-paying corporations without depleting cash.
Take advantage of supplier early-pay discounts: Most vendors offer discounts for early payment. With the predictable cash flow provided by factoring, a business can take advantage of early-pay discounts, improve its credit rating, and offset the cost of factoring all at the same time.
Spend more time focusing on growth and less time managing receivables: Since factoring companies are experts in accounts receivable management, they provide the capability for business owners to spend less time managing receivables and more time managing their business. Small business invoice factoring services free up the time and capital you need to grow your business.
Back office support: The cost of factoring is bound to be a topic of discussion for any company owner looking to enter a factoring partnership. However, the benefits of factoring (such as back office support) easily make the accounts receivable factoring rate seem like a small price to pay. Businesses can reduce the overhead costs associated with managing accounts receivable and the processing of payments. These are services that are usually included with invoice factoring services.
As all business owners are acutely aware, an uninterrupted source of cash is the most vital element in the survival of a business. It shows where a company may be headed. Instead of hoping everything will work out, business owners can enhance their cash flow with Invoice Factoring. When cash flow becomes predictable and controllable, the business is better positioned for continued business success. In today’s lending environment, where traditional financing sources are continuing to fade, invoice factoring presents a welcome alternative.
Taking the plunge into invoice factoring could mean the difference between the successful growth of a business and remaining stagnant. You should first consider all your options, and then spend the extra time needed to examine the factoring companies you are considering working with. Carefully review contracts and work hard to negotiate discounts. In the end, using invoice factoring can provide immediate cash flow to meet your business needs.
If you think invoice factoring might be the right financing solution for your business, or if you have more questions before you take the leap, contact Charter Capital today to learn more about how we can help you.
