Category Archives: AR Financing

Why Invoice Financing may be better than a Business Loan

Jan 09, 2017 Posted in AR Financing, Small Business

Invoice Financing vs Business Loan

Invoice Financing may be better for your
company than a Business Loan.

Invoice Financing vs Business Loan

According to The Service Corps of Retired Executives (SCORE), 82% of start-ups and small businesses fail because owners have a poor understanding of cash-flow management and lack the ability to access working capital needed for growth.

One funding option that is often overlooked is invoice financing. This alternative lending method does not have the same strenuous requirement process as a traditional business loan. The main qualification is that a company has customers with outstanding invoices that are paid on terms. Below, we will take a look at why invoice financing might be a good fit for you.

Invoice Financing means...

Navy Triangle

No Debt Added

Invoice Financing doesn’t require a company to take on additional debt or have the pressure of paying back debt. The less debt acquired, the better your balance sheet, financials, ratios and investor perception. It also allows companies to receive needed capital without the hassle and risk of a loan.

Quick Funding

If a company needs money fast, there are few better options then invoice financing. In 2-3 days, a company can receive up to 90% of their outstanding invoices. After initial funding, capital can be provided within 24 hours.

Simplistic, Fast Process

In order to receive a bank loan, a company has to provide all of their financial statements, have very good credit, and have been in business for a good amount of time, generally more than 3 years. In contrast, invoice financing lenders are mostly concerned with the credit of the entity (debtor) that owes on the invoice, or your customer. This non-traditional approach takes a lot of pressure off the company in need of money.

No Debt to Payback

Because the money advanced is not a loan, it does not have to be paid back. As a result, there are no payments, principal, and interest to be made. The invoice is paid back by your debtor when payment is due and they receive no hassle about early payment, in turn increasing customer satisfaction.

3rd Party Handles Collections

Most Invoice Financing lenders will also handle collection duties for all invoices (even invoices not being financed). This service can provide huge savings for your company, as well as the ability to concentrate on managing your business and not having to worry about collections.

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Does Making Payroll Stress You Out?

Dec 02, 2016 Posted in AR Financing, Government Contract, Small Business

Payroll Funding

Payroll Funding may be the answer.

Payroll Stress

What is Payroll Funding?

Funding payroll can be a challenge without a constant source of cash flow. Even if your customers pay within 30 days, your employees likely need to be paid sooner. If your customers have longer payment terms of 45, 60, or even 90 days, Payroll Funding may be a necessity for paying your employees on time.

How does Payroll Funding work?

Slow paying customers, rapid growth periods, seasonal patterns, selling on credit terms, and other factors can create cash flow challenges for your business. With Payroll Funding, rather than waiting for your customers to pay, SouthStar will advance up to 95% of the total value of your unpaid invoices immediately. Then you receive the remaining balance, minus a small fee, once the invoice is paid. This process can be repeated for as many invoices you submit.

By having access to unlimited working capital, you will always have the cash flow needed for payroll, as well as other expenses. The process creates zero debt for your company, so you won’t have to worry about paying back loans or high interest rates.

The 5 Steps of Payroll Funding

Payroll Funding Process

What to Expect with Payroll Funding

As client of SouthStar’s Payroll Funding solution, you will be assigned a personal account manager who will handle collections, payment processing, and customer credit approvals, allowing you to focus on your business. With Payroll Funding, we look at the credit history of your customer, not your company or personal credit history. Years in business is not a factor in our decision to finance, making Payroll Funding great for start-ups.

Once established with SouthStar, you will receive same-day funding on submitted invoices. This gives you access to unlimited working capital, right when you need it. Payroll Funding also allows you to extend longer payment terms to clients and grow your business.

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Your Business May Be at Risk of Growing to Death

Oct 26, 2016 Posted in AR Financing, Asset Based Lending, Small Business

Business Grow to Death
business growing

Growth is usually viewed as a positive step for business owners, but if not managed properly, growth could be the death of your business.

If your business grows too fast, or grows the wrong way, you can actually grow yourself out of business. Along with growth comes the costs of additional staff, system development, and changes in operations. Without access to working capital, your business won’t be able to support these essential changes.

By tapping into your business’s Accounts Receivable, or outstanding invoices, you can free up existing capital and have access to the immediate cash flow needed for growth. Other assets, such as equipment, inventory, or purchase orders, can be used as collateral to advance capital to your business as well. Both of these options have a fast and easy qualification process that allow for initial funding in just 2-3 days. Unlike traditional lenders, we will not turn you down based on amount of years in business or your credit history. Plus, after initial funding, working capital will arrive in your bank account within just 24 hours of submitting an invoice.

If your business is growing faster than your capital can keep up, don't let it grow to death! Treat yourself today and learn more about your working capital options.

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SouthStar’s Recent Working Capital Solution

Oct 04, 2016 Posted in AR Financing, Equipment Financing, Small Business

Working Capital Solution

Providing alternative solutions to businesses in need of a fast and reliable source of working capital.

Below is one of our recent funding solutions that provided our client with the working capital needed to ensure the growth and success of their business.

Navy Triangle

$1,000,000 Receivables Line coupled with a $350,000 Equipment Lease, along with a Brokerage Line of $500,000 and a $100,000 Term Note for a Trucking and Storage Company

SouthStar Transaction

Contact us today to discuss the working capital options available to your business.

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How You Can Be a ‘Shark Tank’ Winner

Sep 13, 2016 Posted in AR Financing, Asset Based Lending, Small Business

Shark Tank
Shark Tank

Getting the chance to be on the reality show ‘Shark Tank’ can be a huge opportunity for any business. Having a great idea and company can only get you so far if you lack the working capital to grow.

What if we told you that SouthStar Capital can provide the same benefits as the show ‘Shark Tank’, but our version is even better? We can provide your business with the capital needed for growth, but we do not require any equity within your company. Instead, we use the existing assets you already own and turn them into working capital. In-turn, you keep 100% ownership of your company and have unlimited access to working capital.

SO...

  • If your business needs working capital for start-up or growth
  • If you dream about how much your business would benefit from being on the show ‘Shark Tank’

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Collateral

Aug 30, 2016 Posted in AR Financing, Asset Based Lending, Small Business

Collateral

You may have collateral and not even realize it…

Collateral

When looking for a source of capital, there are several factors your lender may take into consideration. For instance, traditional lenders will first look at your company’s credit history, balance sheet strength, and years in business when underwriting a loan. This way of thinking leads to many businesses being turned down and not receiving the funding they need.

SouthStar Capital takes a non-traditional approach and uses your business’s assets, or collateral, to make our funding decision. In-turn we are able advance your business capital by using your collateral as leverage.

Accounts Receivable

Any outstanding invoices or money owed to your company by your customer.

Equipment

Equipment your company owns, such as machinery, trucks, and specialty equipment.

Inventory

This includes both Work In Progress (WIP) and Finished Goods, each evaluated differently.

Purchase Orders

An order you obtained from a quality company that has agreed to accept your product or service.

Real Estate

Property consisting of land or buildings that is owned by you or your company.

Intellectual Property

Refers to creations of the mind and includes such things as patents, formulas, and inventions.

Stock

This includes both traded and privately held stock, each being evaluated differently.

Letters of Credit

A letter issued by a bank guaranteeing that your customer is able to pay for your goods or services.

Certificates of Deposit

A savings certificate issued to you, by the bank, with a fixed interest rate and maturity date.

Rolling Stock

Both powered and non-powered wheeled vehicles used by your business on the railway or roadway.

Contact us today to learn more about the collateral you may have and your funding options with SouthStar Capital.

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The SouthStar Funding Process

Apr 06, 2016 Posted in AR Financing, Small Business

Accounts Receivable Financing

How does Accounts Receivable Financing Work?

Accounts Receivable Financing
  1. You provide products or services to another creditworthy business on terms.
  2. You send the invoice to your customer and send the invoice, along with any support documentation (i.e. purchase orders, contracts, etc.) to SouthStar Capital.
  3. SouthStar will verify the invoice then advance a portion of the invoice directly to you, typically 70 to 90 percent.
  4. Your customer then pays the invoice by ACH, wire transfer, or a check made out to your company, but sent SouthStar Capital’s address.
  5. SouthStar then sends you the invoice balance, less our fee.

Contact us today to learn more about the SouthStar Funding Process!

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The SouthStar Advantage

Mar 11, 2016 Posted in AR Financing, Small Business

SouthStar Advantage

Non-Traditional Approach

  • Our credit decision is based on your company’s assets, not past financial performance or time in business.
  • Our in-house Underwriting allows for quick funding, typically in 2-5 days.
  • Our diverse product mix allows you the flexibility to select what most benefits your business.
  • We are a private company allowing for customizable solutions in your company’s best interest.
  • We work with both Tax Liens and Balance Sheet issues.

Grow with Confidence

  • We prescreen potential clients of yours allowing, you to better understand their strengths, payment habits, and credit worthiness.
  • We do not impose limits on our clients, so your growth is completely in your hands.
  • You have the option to build our fees into future bids or projects to offset the cost of growth/finance.
  • We fund within 24 hours of receiving an invoice to ensure your growth never out paces your obligations.

Personalized Client-Centric Service

  • With us, each client is paired with an Account Manager that handles their daily funding needs.
  • You deal directly with decision makers to expedite initial and future fundings.
  • We take a hands on approach to addressing each and every client need.
  • Submit invoices electronically to your dedicated Account Manager for prompt funding.

Real Time Accounts Receivable Management

  • 24/7 access to online reports through our website or your smart phone.
  • You can focus on running your business, instead of working capital or receivables collections.
  • We track your receivables as part of the overall relationship, so you minimize personnel cost.
  • Customizable reports are available to allow you to manage cash in real time.
  • You no longer have to worry about payroll cycles.

 

Contact us today to learn more about how SouthStar can tailor-fit a solution to your company’s specific needs!

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Your Business needs Cash Flow, but You have Poor Credit…Now What?

Feb 23, 2016 Posted in AR Financing, Blog, Small Business

Accounts Receivable Financing

Accounts Receivable Financing

Many business owners go through the struggle of having a sufficient amount of working capital to keep their company up and running. The typical solution to this problem is taking out a bank loan to support their company through the rough patch. But what are the options when they have a limited or challenged credit history? While banks can be an aid to businesses, having credit issues will most likely result in being turned down for the loan.

The Good News

The good news is that there’s an alternative solution know as Accounts Receivable Financing. AR Financing takes a business’s existing invoices and uses them as collateral to provide a working capital line of credit. This allows the business to receive immediate cash flow from their own assets, without having to wait for payback from their clients. Businesses typically receive 70%-90% of the invoice upfront, then receive the remainder once their client pays, minus a pre-agreed fee. Since the business track records and debt profile of the client (the account debtor) is heavily weighed in the underwriting process, personal credit score or balance sheet strength is not a determining factor. Many AR Financing companies also provide third party services, such as collections, payment processing, account management, and underwriting, that are an added advantage for using their services.

Cash Flow Growth equals Business Growth

Overall, there are many benefits to Accounts Receivable Financing for businesses both with and without credit issues. The fast funding and quick application process allows for immediate cash flow in a time of need. This will eliminate a business’s everyday cash flow problems, such as being able to make payroll. Unlike a loan, a business uses their own assets for funding, so there is no debt added to their balance sheet. Also, having accessible working capital gives them the ability to grow their business.

 

Learn more about how Accounts Receivable Financing can benefit your company’s cash flow, contact SouthStar Capital today!

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