funding companies

How do you pinpoint amazing funding companies? (Hint: It’s the people)

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Look out for these human-centered characteristics from great funding companies.

funding companies

As a business owner, what do you look for when starting a new partnership with a lender? You’ll take the obvious parameters into account — such as their ability to fund your business. But how often do you establish relationships based on a human-centered approach?

It’s easy to forget that real people are behind funding companies because you may not always have faces put to names (especially online lenders). But there are funding companies out there who take a more personal approach, including us at Liquid Capital. We are rooting for our clients and their businesses to succeed, and we want their teams, revenue and profits to grow.

Next time you’re searching for a funding partner to invigorate your business cash flow, these are some of the additional characteristics you should look for:

Great funding companies build relationships

A funding company that looks beyond dollars and cents is someone worth partnering with. Look for someone who can follow your struggles and understands what you’re going through, especially in unpredictable economies. 

At Liquid Capital, our ability to connect with clients at a human-level based on trust, experience and knowledge is what makes us stand out from our competition. Instead of developing one-way access to lending, we promote a reciprocal partnership that encourages business owners to lean on us for anything business-related.

One day we might be assisting our client in finalizing a new supplier. The next day, it could be supporting them to open a new warehouse location. It’s involvement like this that makes us stand out and puts us at the heart of business funding today.

Great funding companies understand the immediate and future needs of business owners

If your business is going through a cash shortage, chances are you need the problem resolved ASAP. When you work with a funding partner, they should perceive critical business challenges and provide timely and convenient solutions. 

But a great lending partner will also try to identify why there was a working capital gap in the first place — and anticipate future funding needs. In this case, their goal should be to offer continued support so you can rely on them to help you meet ongoing challenges.

Great funding companies are industry specialists

At Liquid Capital, we have experience and practice in almost every industry and market. Working with a lending partner who understands specific industries will significantly benefit you — and not just in terms of funding. 

Not only do they know the ins and outs of how particular markets work and how invoice factoring can be beneficial, but they can also use their knowledge to resolve problems and offer strategic insight.

Great funding companies are willing to ask the hard questions

It’s important to work with a provider who’s ready to ask difficult questions to learn more about your business and see if there’s a fit. 

Are they inquiring about your credit score? Do they ask about past bankruptcy filing or insolvencies? Have they figured out if you’ve been making payments on time? Will they delve into the health of your relationships with vendors and clients? 

Although it may be awkward to answer these questions, they’re willing to learn more about your business so they can lead you to a funding solution that’s affordable and wise.

 

funding companies to work with

Great funding companies will educate you

Ideally, you want someone who will offer you advice and feedback to help you grow your business. After learning more about your operations, they can pinpoint what’s working and acknowledge areas to improve productivity and output. 

Equipped with industry knowledge and experience, we help clients achieve a firm position in the market by continually educating them on best practices and answering questions that fuel business growth.

Great funding companies are realistic

We know it’s hard to hear ‘no’ if you’re in need, but a responsible funding partner won’t be afraid to decline an application request if it doesn’t make a good fit for your business. If that happens, they should also provide practical feedback on what you may need to adjust to qualify in the future.

Likewise, if you’re applying for a particular funding product but another solution is better for you, they should offer that advice. You don’t want to be working with a company that will sell you a service that’s beyond your affordability or does not provide the optimal solution to your funding challenges.

Great funding companies have proven success

Successful lenders can showcase results in the form of case studies, recent fundings and client testimonials. Don’t be afraid to ask them how they’ve helped clients achieve their goals, overcome a unique problem, or enjoy growth with their support. 

At Liquid Capital, we walk the talk. Here are some of our success stories that prove why our clients love working with us and how we help them achieve their business goals.

Funding is about more than just numbers

Liquid Capital is committed to the long-term success of SMBs and we realize that doing business is about more than earning money. (Naturally, that is important, and we want you to be as successful as possible!)

But business is also about making genuine connections, helping clients beyond their expectations, and working together with a more inclusive approach. With all the qualities listed above, we’re confident that our clients have the support to grow their business. 

 

At Liquid Capital, we understand the struggles and challenges of small, medium and emerging mid-market businesses – because we’re business people ourselves. Our company is built on a network of locally owned and operated Principal Offices, so whenever you’re talking to Liquid Capital, you’re talking directly to your funding source and a fellow business person.

how to ask for invoice payments

How to ask for invoice payments the right way—and get paid

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Your business survival depends on a positive cash flow. 

how to ask for invoice payments

As a business owner, you probably have some favorite clients. Those people you can call up and chat with about business easily, but that you also get to know on a personal level. The ones who have grown professionally alongside you, having battled through the highs and lows together. You may have both developed a mutual loyalty. 

So what happens when a client doesn’t pay on time?

Even if you want to remain loyal to a non-paying customer, unpaid accounts can negatively affect your cash flow. And without any cash reserve, you may struggle to keep up with overhead expenses. 

Your employees, suppliers and vendors also need to be paid every month, and if your client payments fall behind, you’ll experience an even bigger working capital crunch. If you’re unable to effectively run your business because your clients aren’t regularly paying you, it’s time to do something about it.

How to ask for invoice payments the right way:

If you’ve implemented the above tactics to avoid non-payment but still have clients that refuse to pay you, consider the following:

Get in touch with the main point of contact personally. 

Before taking any drastic measures, pick up the phone and call your customer to have a one-on-one conversation with them. In some cases, your team may have been messaging their Accounts Payable team, but the owner, decision-maker or your key contact may not even realize that payment is outstanding.

Verbally remind them of any outstanding balances, and notify them of any late fees that they’ve incurred or will continue to incur if they fail to make payment. If it’s getting hard for you to get in touch, you may be able to speak to another colleague in a senior role who could shed some light on the situation and come to a mutual agreement on payment timelines.

Try to understand why your customer is unable to pay you. 

Communication is key to overcoming stressful situations such as non-payment, so it’s crucial to understand the reason for the delay. 

Over the past year, businesses have been hit hard by the pandemic. Many continue to see declining sales, have been impacted by lockdowns and travel restrictions, and some have even had to shut down operations. It may be a good idea to investigate if the pandemic has affected your customer. Chances are they’re experiencing a slow season, or also waiting on capital tied up in invoices. Showing a little empathy goes a long way, especially in today’s uncertain economies.

 

how to ask for invoice payments

Stay top of mind with friendly reminders.

Sometimes, all it takes is a little reminder to push your client to pay an outstanding invoice. You can use accounting software or manually set up friendly reminders that follow-up with clients at certain points after an invoice is sent out.

You can set frequencies based on their payment history. If you know a customer takes their time to pay you, schedule more frequent reminders. It’s best to check in with clients to strengthen the relationship, and be open to a two-way conversation. By doing so, you’ll encourage customers to come forward if they think there will be a delay in paying you.

If nothing else works, the last resort is to get outside help. 

Your primary goal should be to resolve any non-payment issues without getting third-parties involved. Because let’s face it, no one likes to be the bad guy.  

If a client is unresponsive after multiple attempts of communication, then hire a professional to send a notice to a customer who hasn’t been responsive. Hopefully, you’ll be able to resolve the matter without further legal measures. 

Alternatively, you may also consider hiring a collections agency to try and recover payment. 

 

Recovering a payment doesn’t have to be a stressful experience 

Late payments can have a negative effect on your business. They slow down growth, you risk not paying your employees or vendors, and they interrupt the day-to-day of your operations. So how you ask for invoice payments from non-paying customers is important.

It doesn’t have to be a stressful experience — when you are waiting on payments, consider taking steps we shared in part one of this series, followed by the tips outlined in this post. 

By following through, you’ll get to the bottom of why a client is unable to pay on time, and decide if you should adjust the working relationship.

Financiamientos recientes – Marzo 2021

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non paying customer

43% of companies don’t get paid on time. Here’s how to deal with non-paying customers

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Dealing with non-paying customers can be stressful. Use these strategies to manage late payments and maintain a consistent cash flow.

non-paying customers

If you operate in the B2B industry, receiving invoice payments on time is a major concern that can make or break your business. Even with great sales and quality products or services, many companies still experience delays when expecting payment. 

43% of companies polled by Atradius reported they often have to deal with clients that don’t pay on time. Dealing with those overdue payments means significant time is consumed by customer follow-ups and chasing down unpaid invoices. 

While there is occasionally some room to account for late payments, it can be detrimental to your business if invoices are consistently late. To avoid unwanted stress, you need to know how to deal with non-paying customers and have a plan in place to make sure there isn’t a lag in cash flow.

How to avoid non-paying customers

Below are four ways to take back control:

1. Research and reassess

Before you begin working with a new customer, look at their credit reports and make assessments based on customer credibility and trustworthiness. For existing clients who fail to follow your invoice terms, consider reassessing their creditworthiness and doing business with them.

You can involve us at Liquid Capital in this process. We can run credit checks for you and evaluate a customers’ risk factor. In addition, we can advise you whether a new customer is worth doing business with or not, and if they fall in the high-risk category (how likely are that customer would be to default their bill payments). An added benefit of getting us involved early is learning if you’ll be able to make use of invoice factoring to improve cash flow from your customer’s future invoices.

 

2. Have a contract in place

It doesn’t matter if your new customer is a family member or a business professional you’ve known for a while. You must have a contract in place before you begin working with a new client. 

A contract is a legally binding document that outlines the specifics of your working relationship with a customer. What product or service are you offering your customers? When and how will the customer pay you? What will happen if the customer fails to pay you on time?

The contract is your chance to protect yourself from non-paying customers. You can discuss all costs and fees associated with late payments before-hand. Ensure you include a payment schedule that identifies the terms of payments (such as deposits, milestone payments, payments before delivery, etc.). You can also make sure you’re implementing terms that will create a consistent cash flow for you (for example, using 30, 60, or 90-day terms depending on your need for cash every month). 

You can also include a “default interest” clause in the late payment policy within your contract to encourage timely payments. If the customer misses a payment, they’ll pay a higher interest rate. This term may influence your customers to prioritize when choosing who to pay at certain times. They are likely to give priority to paying partners who will charge more for late payments.

 

dealing with non-paying customers

 

3. Ask for a deposit

After running risk assessments and background checks, if you’re still unsure about a customer’s credibility, you can ask for a deposit. This way, you can absorb some of the loss in the event of non-payment since you already charged a portion of the payment upfront.

It would help if you decided on the deposit structure based on the industry type and the product or service you’re offering to your customers. It’s also important to consider how much deposit your customer can make. If your payment is contingent on them getting paid by their customers, you should consider that and adjust the deposit term or schedule based on their cash flow. After all, you’re trying to build relationships with your customers, so it’s probably best to find a balance and discuss mutually beneficial terms.

 

4. Send invoices ASAP

If you think a client might disregard your payment terms and delay payment, it’s best to send an invoice as soon as you’ve completed the work. This can encourage on-time payment since the work is still top of mind, especially if they’re happy with the result. This also allows their A/P team to manage their payment process on time.

 

 

Implement these tips and speed up your invoice payment time to boost a steady stream of cash flow. If your cash flow needs are immediate and cannot be resolved with these strategies, you can use invoice factoring to inject some capital into your business.

 

Featured image by Adobe Stock, secondary image by Pixabay

Recent Fundings – March 2021

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Best Broadcast boosts sales with invoice factoring

Best Broadcast: AV company booms by adding invoice factoring

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Learn how Best Broadcast was able to save money and grow their business with the help of their local Liquid Capital Principal. 

Best Broadcast boosts sales with invoice factoring from Liquid Capital

 

Short on time? Read this 30 second summary

Best Broadcast is a thriving audiovisual company with a strong technical team and fast-growing business. Along their business journey, they have generated a lot of accounts receivables (ARs), but have sometimes had slow-paying customers, which has created cash flow shortages.

Since partnering with Liquid Capital, they’ve been able to leverage invoice factoring to consistently inject capital into their business that would have otherwise been tied-up elsewhere. This has allowed Dave Kip, CEO of Best Broadcast, to run his company with less stress — and focus his attention on growing his business.

With a reliable alternative financing solution in place, Dave now has access to the funds he needs to grow his business and no longer has to worry about cash flow to address operational expenses. Due to its affordability and easy access, he advises other business owners to consider invoice factoring when looking to improve their working capital.

“Positive cash flow in my industry has always been extremely important because it eliminates unwanted stress that can come with staffing and managing the day-to-day operations. Having a reliable cash flow allows me to focus my attention on growth opportunities.”
Dave Kip, CEO of Best Broadcast


The backstory: Bursting out of the starting gate

In the spring of 2008, Dave Kip had the exclusive opportunity to work on a major project that would garner a lot of media coverage, and would be the launching point for his broadcast systems engineering and consulting firm, Best Broadcast.

He was asked to build the groundbreaking CityTV Dundas Square station in Toronto, Ontario. With a successful launch putting him in the spotlight, Dave found his phone ringing off the hook with even further business opportunities to work with major companies such as Rogers. In just two short years, he grew from a one-man shop to a team with seven full-time staff.

In 2014, the stage was set for tremendous growth. Best Broadcast purchased an integration company and doubled their headcount, allowing them to provide an end-to-end solution for TV stations including AMI, CBC, TVO, Bell, and even clients as far away as in Trinidad. In 2016, the evolution rapidly continued, branching off into the audiovisual industry with 40+ employees. Best Broadcast was now a dominant player supporting large AV companies such as Samsung, supplying technical manpower that would allow their clients to focus on sales without having to worry about project delivery.

The business was booming, and positive cash flow became increasingly important. But with all this success came challenges that every business owner will face at each growth step. Best Broadcast needed to access more reliable working capital to manage day-to-day operational demands and keep the momentum going.

The issue: Overcoming cash flow challenges with a brilliant solution

While Best Broadcast was a thriving business, occasionally there would be a slow month where finances would be tight. Every business owner can relate to this cash flow problem in their own growth journey. To increase cash flow, Dave started offering clients a five percent discount if they paid their bill in full within 15 days. But this heavy discount was eating into his bottom line.

Fortunately, because the Best Broadcast billing process generated a lot of accounts receivables (ARs), a solution was right under their nose. When he was introduced to Liquid Capital, he realized he could change his approach, speed up his incoming cash flow and save money.

 

In many cases, when Best Broadcast sends technicians out on the field, they’re on the job for a couple of weeks before a first bill gets sent out to their client. Because they invoice on a net 45-day term, incoming cash flow can slow down. That means they can be waiting for a minimum of 60 days from when they start a job to get paid.

Dave often found that he had hundreds of thousands of dollars tied up in ARs and limited cash in the bank. With the majority of his funds not immediately accessible, he could not see how to keep growing the business.


The solution: Finding immediate cash flow relief

The solution was invoice factoring, and Dave learned it could alleviate his day-to-day working capital problems.

His Office Manager Barbara, who had been with the company since 2015, also took the time alongside Dave to understand and evaluate how invoice factoring could work for them. Together, with their Liquid Capital advisor’s strategic guidance, they were able to forecast the potential savings and financial improvements of this smart lending solution.

“Once we calculated the difference between what we were offering clients for early payment discounts, getting private loans or even dipping into our bank overdraft, it became a no-brainer to use invoice factoring,” Dave explained. “If other companies are offering early payment discounts, then you should consider factoring as a real option. I had always assumed that it would cost much more, but when looking at the calculations, invoice factoring was a much cheaper option.”

When they started using invoice factoring, Best Broadcast immediately saw a world of a difference in their cash flow. With Liquid Capital they now had access to the funds they needed so Dave no longer had to worry about day-to-day operational costs.

 

“Liquid Capital allows me to operate without stress. If a company is offering early payment discounts, factoring is a cheaper option to gain access to money.”

Dave Kip, CEO of Best Broadcast

 

The solution continues to help Dave evolve the business and increase their cash flow. Liquid Capital not only provides funding to reduce stress for Dave, Barbara and their team, but is building a lasting relationship they can count on. Their Liquid Capital Principal regularly checks-in with them and is available to discuss matters not just related to funding, but also strategic business moves.

By understanding his industry and unique challenges, the tailored advice from Liquid Capital gives Dave the financial assurance to take on new opportunities.

 

“Liquid Capital is more than just a source of money. My Principal calls regularly, gives me his perspective and shows me my financial trends so we can discuss what next steps make sense for my business.”

Dave Kip, CEO of Best Broadcast

 

Best Broadcast - Liquid Capital success story

A bright future ahead

Looking forward, the next couple of years could be an exciting era for the company. Dave has eyes on new industries to add to Best Broadcast’s lineup — including the remote working space, which will no doubt bring next-level business priorities for many clients. He also has plans to open a technical school that would provide formal training to AV technicians, with the goal of introducing more qualified technicians into the workforce.
As the Best Broadcast strategy evolves, Liquid Capital will be proudly by Dave’s side as a funding source and cheer him on as a business partner.

 

“The next time I need money, the first person I’m calling is my Liquid Capital Principal.”

Dave Kip, CEO of Best Broadcast

 

Up Next: How this trucking company was put on the road to success with both funding and strategic business advice.