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Advantages of factoring your invoices with Liquid Capital

noviembre 1, 2022/en Sin categorizar, Factoring/por Sarah Schoepfer

Not all factoring companies are made the same. These are the benefits of factoring your invoices with Liquid Capital.

Invoice factoring can be an excellent solution when you need business funding that’s as agile as your business. Many business owners have seized new growth opportunities and overcome cash flow challenges by partnering with a trusted and reliable alternative funding partner.

However, not all invoice factoring companies are made the same. At Liquid Capital, here’s how we’re doing things differently:

1. We help accelerate your cash flow quickly

While some factoring companies can take several weeks to advance payment, long-established companies like Liquid Capital can often provide approved clients with funding in as little as one day.

2. We help navigate credit issues to access funding

Some traditional factoring companies may make it difficult to qualify for factoring advances, but that doesn’t make sense to us. Given that you’re effectively selling your invoices to a third party, so long as your customers’ credit ratings are good, you should qualify.

Factoring, often considered one of the most accessible forms of financing, doesn’t rely on your company’s credit score, or level of revenue – and years in business are not part of the application process.

3. We give you access to significant funds upfront

Some factoring companies advance smaller portions of the value of invoices. Liquid Capital advances at least 80% of the invoices’ value and sometimes more. That means you can get more funding, more quickly.

4. We don’t overcharge our clients on fees

There are numerous factoring companies out there, and some of them charge high fees. Sometimes these fees are not clearly communicated. Trustworthy factoring companies like Liquid Capital are fully transparent and never charge hidden or egregious fees.

The amount you’ll pay can depend on several factors including the number of invoices you factor and their cumulative value, as well as the length of your factoring contract. Liquid Capital’s fees can often be comparable to what you would pay in interest on a loan.

5. We don’t lock our clients into long-term contracts

Some factoring companies lock clients into contracts of up to two years. However, the more established and reputable factoring companies offer more flexible contracts, some as short as a month or two. And you usually pay lower fees if you do sign up to a longer contract.

6. We protect your relationships with your clients

If your factoring company has poor customer service and pesters your clients for payment, this could adversely impact your relationships. However, this doesn’t happen with well-established factoring companies that offer high levels of consistently good customer service. The only aspect of your relationships with your clients that you will lose is chasing them for payment. Everything else remains the same.

All invoice factoring companies are not the same

Until you’ve worked with a factoring company or two, you might think that all factoring companies provide similar services. But here at Liquid Capital, we pride ourselves on being different.

We’ve been successfully helping businesses for over 20 years by delivering:

Speedy financing: approved clients often receive funds within 24 hours.
Complete transparency: no hidden terms or complicated restrictions.
Expert advice: we consider your unique needs and offer a range of options.
Capital strength: we’ve deployed over $3 billion in working capital.

Ready to dive deeper? Check out our Invoice Factoring Guide, which provides some critical questions and info you may not have considered, which you should be asking of any factoring provider.

Contact us to find out more about how you can improve your cash flow by turning your invoices into immediate cash, with invoice factoring from Liquid Capital.

Here to stay: The benefits of a hybrid workplace

octubre 25, 2022/en Sin categorizar/por Helen Burnett-Nichols

For companies to get the most out of the benefits of a hybrid workplace, leaders and managers need to ensure their teams are properly supported.

While the virtual office was a lifesaver for many companies during the pandemic, it’s clear that it isn’t going anywhere anytime soon — with many employees and business leaders readily embracing the advantages of a more flexible approach to work.

For many businesses, remote work has become part of a hybrid model, as both employees and management favour some face-to-face time while still being able to take advantage of the flexible hours and lack of commute that a partially offsite schedule can provide.

After polling more than 140,000 U.S. employees over the course of the pandemic, Gallup found that nine in 10 remote-capable employees now favour some type of remote-work flexibility, with six in 10 specifically preferring a hybrid work arrangement.

When asked earlier this year what their employer’s plans were for long-term work arrangements, 53% expected a hybrid model, compared with only 32% in 2019.

As McKinsey & Company notes, nine out of 10 employees who temporarily left the workforce and later returned said having control of where work could be done (regardless of whether they were in-person, remote or hybrid) was important to them.

But while the upsides of a hybrid work arrangement are significant – think greater choice in terms of where and when employees can do their work, leading to more work-life balance — in theory, it isn’t without its potential downsides.

Left unchecked, employees working remotely might feel disconnected from the team. They may also end up working longer hours as they’re connected to the office 24/7. This can cause overwhelm or professional burnout if steps aren’t taken to address these issues.

For leaders, as the Harvard Business Review (HBR) explains, maintaining strong ties with your employees remotely is critical – but building and keeping your team connected and aligned on a shared vision is more challenging in a hybrid environment. With the ability to measure their output easier now with new digital tools, the traditional management approach of “command and control” is also counterproductive for a hybrid workforce.

Here’s how to help your team thrive in this new hybrid working world:

Allow for choice and flexibility

Within your hybrid workforce, employees will likely have different plans, with some favouring more in-person work, and others opting for as much remote as possible.

Having a hybrid model with set days in the office provides a false sense of flexibility – in reality, it’s crucial for leaders to give employees control of where they work as not all elements of their job likely need to be done in person.

Amazon decided against a one-size-fits-all approach to hybrid working for its corporate roles, where, instead of setting out how many or which days employees need to be in the office, this was left up to individual teams with the idea that any approach chosen would eventually be evaluated by customers.

Foster strong and clear communication

As Gallup notes, in a hybrid environment, there is a risk of isolation, neglect of remote workers and ‘culture erosion’ – so managers need to double down on clear and strong communication and team-building.

With flexibility increasing, leaders need to be more proactive about clearly communicating with employees about their priorities and progress. Having designated checks-in regularly ensures remote workers feel like part of the team.

Giving employees a compelling reason to come to the office occasionally can help you strengthen team-building efforts. Activities such as having a monthly professional development day, guest speakers or in-house childcare can entice employees to work from the office. Looking at ways to reduce the barriers for employees to come into office can also help, such as offering a transportation allowance.

Move away from the old model

Hybrid workplaces should move away from simply reproducing how things are done in-person – for example, holding endless virtual meetings — towards a new approach that uses technology to involve all team members in the discussion.

When one retail bank was designing its hybrid work arrangement, it quickly realized the model had retained too many traditional meetings. When the bank eliminated some of these meetings and made others asynchronous, it helped to boost productivity.

More flexible tech tools and workshop rooms that allow for collaboration from both in-person and remote employees can replace traditional white-boarding. Meanwhile breakaway rooms can help all team members participate in problem solving and innovation and help stave off isolation and ‘Zoom fatigue’.

Set the parameters

Flexibility can be a double-edged sword for some – while employees can work when they want, removing the idea of a traditional 9-5 can blur the lines between work and home life.

To help employees avoid this, some organizations, have established rules of engagement around hybrid work such as mandating ‘no-meeting zones’ at certain times of the day. This allows employees blocks in their calendar for other activities, like exercise or ideation time. Others have put email disclaimers in place, setting the expectations around responding to emails only during business hours.

Along with letting employees decide how, when and where they work, Salesforce’s hybrid work strategy allows individual teams choose how they communicate, with some implementing ‘no meeting Fridays,’ for example and holding an “Async Week” where employees cancel routine meetings to allow for more focused work.

Success takes commitment

A successful hybrid approach doesn’t just mean logging on from outside the office a few days a week – for teams to ace this strategy, it takes a change in leadership style, a focus on communication and tech tools aimed at bringing everyone together.

In practice, as Gartner explains, companies benefit from the inclusive options offered by the hybrid approach, no matter where employees are working.

At the same time, it’s important to limit synchronous work to certain blocks and let employees take charge of their work schedules. By taking a flexible approach that shifts away from the traditional office model, you can help your hybrid work team succeed – whether they’re in the office or not.

Up next: Lead better with these top podcasts for entrepreneurs

Alternative business funders are fueling entrepreneurism — and the economy

octubre 20, 2022/en Alternative Finance, Sin categorizar/por Liquid Capital

During unstable market conditions, alternative lenders are here to keep fueling entrepreneurism.

Most entrepreneurs have a certain level of risk tolerance baked into their DNA. It takes courage to have a dream, come up with a solid business plan, and make the leap towards realizing it, but sometimes you need a bit of outside help…particularly when finances get a little tight.

And let’s face it — with recent changes in the economy — rising interest rates, contraction, supply-chain issues — it’s not getting any easier to sleep well at night.

That’s where alternative business funders come in.

They can help you accelerate cash flow quickly — often faster than you would with traditional banks. This is particularly helpful when you need to jump on business opportunities as they happen.

Plus, the application process is often easier, with fewer hoops to jump through compared to banks. This makes alternative working capital providers an attractive option when you’re dealing with a lack of cash flow due to late payments from your customers.

Banks are great – when you meet their criteria

When you try to access financing through a bank, you’ll typically need to meet a lot of eligibility requirements first: things like showing a substantial annual revenue, having a high credit score, exhibiting consistent cash flow, and proving you hold a strong debt-to-income ratio. After all, the bank wants to minimize their risk of loss.

These requirements are not a problem for larger, more established companies. But a start-up or smaller business often won’t meet these criteria. This—maybe unfortunately for you—means many prospective small business borrowers get turned away by the big banks at a time when they’re counting on a cash infusion to keep them going. Scary times for an entrepreneur.

Agile and ready

There is another option. Alternative working capital providers have grown in popularity, mostly due to their accessibility, flexibility, and speed (compared to old-school, bricks-and-mortar banks). This makes alternative funders like Liquid Capital a great fit for entrepreneurs.

In fact, statistics show that as a small business owner, you’re more likely to get approved for a loan through an alternative funder than a traditional bank or credit union.

How does alternative funding work?

Instead of complicated applications and strict eligibility requirements, alternative funding companies make it easier for entrepreneurs to get the cash flow you need, when you really need it, thanks to:

Lower credit score requirements: Alternative funders will often approve loans for new or small businesses that may not have the kind of credit score traditional banks require.
Faster approval: Banks can take weeks or longer to approve a loan, but alternative funders can often get the funds you need into your hands in as little as a week.
Easier qualification: Trying to get a loan with traditional financial institutions is often a complicated lending process which doesn’t favor entrepreneurs and small businesses.

Partnership: A good funding partner will take the time to truly understand your business challenges, goals and opportunities, propose a strategy that maximizes value for your business, and will remain an accessible and trusted partner throughout the process.

Creative financing solutions made for entrepreneurs

Alternative funders like Liquid Capital specialize in thinking the way entrepreneurs think. We know you need to be nimble with your financing, and often don’t have a long history of past performance to show to qualify for the funds you need. So we find other ways to get you the financing you need, such as Invoice Factoring and Asset-Based Lending.

Invoice factoring: your go-to working capital resource

Invoice factoring is one of the ways you can quickly inject your small business with cash. It’s simple: you sell your credit-worthy invoices to a funder like Liquid Capital, and you’ll get paid out a percentage of their value right away (usually 80% or more). It’s an advance on payments – not a loan. In essence, you’re transforming money you’re owed into money you can use to help float your business.

This kind of alternative financing is perfect for entrepreneurs, because it’s much easier to qualify for since your invoices act as security for the funding. If outstanding invoices are affecting your cash flow, invoice factoring could be the right solution for you.

Get ahead of the game with alternative lending

In today’s world, it’s easy for entrepreneurs to fall prey to the whims of an ever-changing economy. Having the right network of investors in your corner can make the need for unexpected financing a lot less stressful. Taking a creative approach to funding with an established and collaborative alternative funding provider can be the right move to help ensure your business dreams stay aloft.

Are you or your client looking to accelerate cash flow? Contact us today to learn more about how invoice factoring can help.

Invoice Factoring Mythbusters: Part 1

octubre 17, 2022/en Alternative Finance, Sin categorizar, Factoring/por Sarah Schoepfer

Alternative funding options are often overlooked sources of financing, but they can help businesses grow exponentially. Here’s what you need to know about invoice factoring.

Invoice factoring is probably the most unique — and misunderstood — of financing options available to businesses. It’s not a loan or a line of credit, and it’s one of the oldest funding solutions around.

Invoice factoring (also known as factoring or accounts receivable factoring) is an efficient way for companies to accelerate their cash flow. Most businesses have regular expenses they need to pay while working capital is tied up in outstanding invoices. When you leverage invoice factoring services, you can convert those invoices into immediate cash, rather than having to wait several months to receive the money.

So what’s true and what’s not?

We examine 5 common myths about invoice factoring and the truth behind this unique financing option.

1. The paperwork required can be time-consuming and overwhelming

This can be the case for some business loans, but invoice factoring is quite straightforward and easy to set up. Also, you could choose to only factor certain clients’ invoices, to make the process even more streamlined (such as only factoring your top 10 customers’ invoices).

“With financing, it’s important to shop around, do your research and make sure you understand the product. The solution must be transparent and deliver on its promise, and we honestly didn’t see anything that was as easy to understand as what Liquid Capital offered. There’s so much confusing—sometimes misleading—information out there; when you come across a company that’s telling the truth with no hidden items, it’s such a big help. It really gave us a comfort level we didn’t have with other providers.”– Ken Fincher, President, Defense Product Services Group USA Inc.

2. Start-ups don’t qualify for invoice factoring

Many start-ups struggle to qualify for regular financing options, such as loans or lines of credit, and so might think they wouldn’t qualify for invoice factoring. However, because this financing option is an advance on outstanding invoices, rather than a loan, many start-ups can indeed qualify for it.

These are the qualifying factors that we focus on:

You sell products or services to other businesses, not consumers.
Your customers have good credit and consistently pay on time.
Your invoices have payment terms (such as net 30, 60 or 90 days).
Invoices are within specified credit terms and credit limits.

3. My customers might think my business is in financial trouble

While factoring can be helpful for companies with cash flow issues, it’s also a useful financial strategy used by many large and growing companies that want speedier cash flow so they can expand faster.

Many B2B companies are now used to paying their invoices through a factoring company, especially in certain industries. They won’t think twice about it and certainly won’t assume you’re in financial trouble.

4. Invoice factoring is only for large companies

Smaller companies and start-ups may be under the misconception that factoring is only for big businesses with huge numbers of invoices, but this is simply not the case. In fact, Liquid Capital deals predominantly with small and medium-sized B2B companies.

5. The advanced money can only be used for specific expenses

This can often be the case for term loans: banks will only lend for specific reasons, such as for buying equipment or machinery. Invoice factoring is not a loan, however, so it doesn’t come with restrictions on how the money can be used. You can use the money to make payroll, pay monthly expenses or finance expansion — anything you choose, in fact.

Selecting the right funding partner

When using alternative financing options such as invoice factoring, it’s important that you select the right funding partner for your business (or your client’s business).

While there are many invoice factoring companies, not all of them are cut from the same cloth. It’s important that you and your funding partner share common values and a desire to work towards the same goal – accelerating your cash flow and keeping your business growing.

Contact us to find out more about how you can improve your cash flow by turning your invoices into immediate cash, with Liquid Capital’s invoice factoring.

The importance of shared values in referral partnerships

octubre 4, 2022/en Alternative Finance, Sin categorizar/por Sarah Schoepfer

When it comes to an ecosystem of funding referral partnerships, what determines whether a relationship is likely to last or be successful? Hint: it all comes down to sharing your values.

Whether you’re a business development officer, finance professional, accountant or agent, the seeds you plant will determine what comes to fruition down the way.

While speed and responsiveness are key to relationship building, they will always be trumped by trust—and trust is determined by offering reliable counsel. That means putting people first and seeing relationships as the ultimate drivers of business growth.

Business professionals play an important role in driving economic growth for the businesses they help. Indeed, 92 per cent of respondents in a Nielsen report say they trust recommendations from people in their professional network more than any other source. And 88 per cent of B2B decision-makers rely on word-of-mouth (both online and offline) for “information and advice,” according to Capterra.

Building a relationship-based business

Perhaps a client has reached out, but you’re unable to help with their specific business challenge. Maybe they need help outside your area of expertise. Or maybe they don’t yet meet the minimum requirements to access traditional funding options. However, you still want to help your client and maintain a good relationship.

If you help businesses deal with cash flow challenges, you could be working with a variety of funding partners—and you may be looking for (or already using) a referral partner that specializes in alternative business funding. But without a values alignment, you may not be in the same position to service your clients with the advice they need.

Working with a referral partner who specializes in alternative business funding can help you grow your business, while helping your clients. But you want to make sure that any partner you work with will act as an extension of your brand—and maintain your reputation as a trusted advisor.\

Why do you need a referral partner?

There are a lot of reasons to consider this type of strategic partnership. First off, you’re putting your client first and helping them meet their needs, even if you can’t help them directly. Creating a great experience for your clients will increase the likelihood they’ll return to you in future and recommend you to their network.

And, if you build a strong relationship with your referral partner, they’ll also be more likely to send their clients your way. And you may even receive a referral bonus if your client’s financing request is approved by your referral partner.

But recommending a client (or potential client) to another business partner can be daunting. After all, you don’t want to risk your reputation. Before entering into a partnership, take the time to research your potential referral partner. You’ll want to find out what kind of funding solutions they offer, their terms and rates, and how long they’ve been in business.

Questions to ask:

It’s also important to ask questions to help ascertain whether they’ll be a good fit for your business—which goes beyond their stated capability to fund deals.

Are your goals, values, missions and business needs aligned?
Are they a thought leader in their field?
In which ways are they at the forefront of their industry?
Have they demonstrated a willingness to go deeper to find a solution with other clients?
Most importantly, will they uphold your reputation if you send them clients?

Taking a people-first approach

Taking a people-first approach turns a transactional relationship—one that focuses on providing a service or fulfilling an order—into a dimensional partnership. That means focusing on building a relationship, not completing a transaction, even if it means referring business elsewhere.

For example, when Claudia Serna started her trucking business in San Marcos, Texas, she had just one truck. Over the years, she expanded her fleet and built up a highly successful business. But, like many other business owners, she struggled with delays between receiving payments from her customers and paying her subcontractors.

So she turned to her business advisor at the Greater Austin Hispanic Chamber of Commerce, who in turn suggested she seek assistance from his connection at Liquid Capital. After getting to know Claudia’s business needs and challenges, the Principal at Liquid Capital in Austin helped her set up invoice factoring so she could immediately pay her subcontractors—and significantly improve her cash flow, growing the company by 20 per cent.

Read the full story here: Serna’s Trucking: Driving results within the construction industry

This was good for business, but also built trust with her advisor at the Chamber of Commerce. Serna’s Trucking—which sees consistent year-over-year growth—is now a strong contributor to the local economy, and Claudia uses her success to make donations and give back to the community, including assisting teen sports programs at local schools.

Relationships are everything

Working with a referral partner who shares your values will help your clients in a way that will deepen your relationships and expand opportunities for your business. Finding the right strategic partnerships not only helps to build your reputation, but can also take your business to the next level in unexpected ways.

Liquid Capital has been funding businesses for more than 20 years, deploying over $3 billion in working capital in more than 35 industries. Find out more about the Liquid Capital Referral Program here.

Exciting ways to avoid professional burnout

septiembre 29, 2022/en Sin categorizar/por Helen Burnett-Nichols

While we’ve all heard about the importance of self-care, sometimes taking a different approach to unwinding and relaxing is just what’s needed to avoid professional burnout.

You may be living your dream — running a company you’re passionate about and leading a great team. But when your phone is buzzing at 2 am, clients have questions only you can answer, and you’re carrying the weight of your company’s success on your shoulders, it’s hard to avoid letting the stress take over.

The dangers of getting too close to the dreaded burnout zone are real for business owners — especially as inflationary concerns, supply chain, and staffing issues continue to grow.

As a survey from the Canadian Federation of Independent Businesses revealed, two-thirds of small business owners reported that they were close to burning out. And this is a phenomenon being experienced across the border as well.

Gallup’s most recent State of the Global Workplace report found that 50% of employees felt stressed daily – making North American workers among the most stressed in the world.

Although professional burnout is a work phenomenon, it creates negative physical, emotional and behavioural effects (such as headaches, poor sleep, self-doubt, helplessness, isolation and frustrations) that can seep into all aspects of life.

Many of us have heard about the importance of taking daily walks, disconnecting from our devices or getting a good night’s sleep to avoid reaching the burnout zone. But if these standard de-stressing techniques aren’t cutting it anymore, it may be time to add a few more tricks to your repertoire.

Here are some unexpected ways to proactively avoid professional burnout before it starts:

Get (your office) back to nature

It’s always a nice idea to take a walk when stressed. But if work is calling non-stop, it may be challenging to take an actual break, find a trail and breathe some fresh air. If this is the case for you, finding solace in your own space can be a great alternative.

Consider bringing the outside in by adding a few plants into your office — the time you spend tending to them or simply admiring them can have a temporary calming effect.

On a larger scale, the trend of bringing nature into the workplace is known as ‘biophilic design‘. It involves incorporating indoor plants, natural light and natural materials (such as wood or water features) into your office.

For example, industrial analytics firm Uptake in Chicago has worked in natural carpet and other materials throughout its office, including wood beams, green walls, plants and a yoga room with foliage.

The benefits of this approach can be significant. As one Harvard study showed, individuals working in spaces with biophilic features were more creative and had «consistently lower physiological stress indicators.»

Look to alternative solutions

Along with greening your office, other natural remedies may go a long way to providing stress relief. Edward F. Group III, CEO of Global Healing Center, told Inc.com magazine that having live plants in the office environment, combined with other strategies like deep breathing exercises, favourable lighting and essential oils, helps to reduce stress during the workday.

Certain essential oils, such as lavender or chamomile, have been heralded for their stress and anxiety-fighting benefits. If you want to benefit from their healing properties, consider diffusing these oils at your desk or switching your afternoon coffee to a calming herbal tea.

It’s also beneficial to pay attention to your breath when you’re feeling burnt out — odds are, it will be shallow, making you feel more anxious.

Focusing on closing your eyes and taking slow, deep breaths through your nose, out through your mouth, and letting your lower abdomen rise and fall for a few minutes will help slow your pulse down. Do this a couple of times daily to give your body a reliable go-to stress-buster when needed.

And don’t ignore the advantages of the right lighting. As one CEO told Entrepreneur, bringing a minimalist LED floor lamp into his office helped improve his mental health and eased feelings of stress and fatigue — especially when he found himself burning the midnight oil.

Push the boundaries of your comfort zone

As a business owner, you might be tempted to fill your free time with new client meetings, professional development opportunities, or other activities focused on driving your company towards important goals.

While these moves are great for your business, they keep your mind in work mode and don’t do much to help you avoid stress. Instead, it’s time to think outside the box and dedicate part of your week to something completely different.

A study from the U.K.’s University of Sheffield found that leisure activities far removed from someone’s day-to-day work can give people time to develop themselves. It also boosts confidence and recharges one’s batteries — as long as that hobby uses skills different from their job.

Have you always wanted to learn how to DJ in front of a crowd? Maybe you’ve been intrigued by surfing for a while? Perhaps Brazilian Jiu-Jitsu is more your speed?

If you typically spend a lot of time writing, strategizing, speaking at conferences or even playing golf for business development purposes, it’s time to activate a different part of your brain and try something new!

Prioritize your mental health

At the end of the day, prevention is the best prescription to avoid professional burnout. So make it a priority to dedicate a few hours a week to a new pursuit, re-imagine your workspace or begin incorporating natural remedies into your self-care routine.

After all, you need to take care of yourself so that you can take care of your business.

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Navigating unexpected supplier price increases

septiembre 26, 2022/en Alternative Finance, Sin categorizar/por James Burns

How can businesses remain competitive in today’s market when faced with navigating unexpected supplier price increases?

Small and medium-sized businesses have gone through tough times over the last few years. With unfavourable market conditions pushing businesses to make hard decisions, many companies are facing new and increasing challenges.

Decades-high inflation has made pricing and contracts more difficult to navigate, and, along with labour shortages and continuing supply-chain delays, some businesses have been struggling to keep moving forward.

This is particularly the case for B2B businesses that operate on small margins and offer fixed-price contracts, such as manufacturing or trucking and transportation companies.

Companies in manufacturing, transportation and energy have seen instances where suppliers have increased costs by as much as 20%, even though they had a contract in place at a lower price.

So how can business owners continue to deliver at the fixed-price contract rate? Keep reading as we examine this growing problem and how small and medium-sized business owners can overcome it.

Contract reneging is a wide-reaching issue

In recent months, we’ve heard of numerous instances where North American-based companies have had suppliers increase costs at short notice. This is causing strains to their cash flow and putting their client relationships at risk.

Manufacturing, transportation and energy have seen an increase in suppliers reneging on contract pricing. Often in these sectors, purchase agreements are locked in for years or are structured in such a way that they can’t simply pass along the increased costs to their customers.

If a business depends on one or two large accounts (such as a company that is selling products to a grocery chain or a transport company who provides exclusive shipping rights to a single customer) the last thing they want to do is damage or lose a contract.

So what is the driving force behind this phenomenon and what can business owners do to overcome the cash flow challenges it presents?

Dramatically shifting market conditions to blame

The fall-out from COVID-19 lockdowns and ongoing supply issues are partly to blame for the increase in supply prices. Continuing lockdowns in China (which is the world’s leading manufacturer, with almost 30% of the world’s output) have had serious impacts on the supply of goods and materials.

The Russian invasion of Ukraine has played a large part in the increase in global prices for oil, which in turn has raised the costs of transportation and the overall cost of a wide variety of supplies. The war has also caused an increase in energy and food costs, bringing a knock-on effect to the price of many other materials.

The cost of moving goods around the world has also increased considerably. In some places the price of transporting a container almost quadrupled within a year. Labour shortages and wage increases have also had an impact on the cost of most goods and materials.

These pressures have brought about unavoidable chain reactions: businesses’ costs have spiralled and so the goods they provide have also had to jump in price.

For the foreseeable future, these pressures are likely to remain for many businesses. Between 75% and 84% of businesses expect to continue seeing increased supply costs, supply shortages and delivery delays.

Manufacturers are facing almost $1 billion in increased costs, with 80% admitting that they have had to considerably raise their prices and delay deliveries of orders.

It looks likely, therefore, that suppliers reneging on contracts is likely to be a reality for many businesses, for some time to come.

How businesses are reacting to increased costs

To stay afloat, many small and medium-sized businesses know that they have to continue delivering on their contracts, regardless of higher costs they themselves may face. Increasingly, therefore, companies are reconsidering the viability of offering fixed-price contracts.

No business with small profit margins can continue to swallow price increases that can’t be passed on to the customer. More and more companies are providing estimates but no fixed price, so they have leeway to account for potential fluctuations in the cost of materials.

This is fine for the future, but how can companies manage increased costs which they can’t pass on to their customers, right now?

Financial ways to bridge the gap

Many companies will need extra financing to help bridge the gap between what they’re paying for materials and what they can charge their clients. They can, of course, apply for a loan or line of credit with their bank. However, the big banks are typically more risk-averse than other lenders, and less likely to approve loans to small businesses that are experiencing cash flow issues.

This is where alternative lenders could come into play. One option is asset-based lending, which provides businesses with a line of credit based on the company’s assets, and repayments which are made on a monthly basis.

There is also an option for businesses that need improved cash flow without taking on extra debt. Invoice factoring involves selling invoices for cash, meaning companies can get paid up-front, without having to wait 30, 60 or even 90 days. This can help businesses to deliver on their contract obligations without having to pay debt interest.

When traditional funding options aren’t available, many companies have benefited from alternative financing options to help them overcome the cash flow challenges posed by the current market conditions. The key is to find a partner who understands the company’s specific needs and is able to provide a funding solution that is in the best interest of the business’s long-term growth.

As one of North America’s leading alternative business funding providers, Liquid Capital delivers agile working capital to small and medium-sized businesses to help accelerate growth. To learn more about our alternative lending options, contact your Liquid Capital Principal today.

Cash Flow Survivor: Alternative business funding strategies to outwit, outplay & outlast your competitors

septiembre 6, 2022/en Alternative Finance, Sin categorizar/por Liquid Capital

3 alternative business funding strategies to help you avoid cash flow exile.

With 42 seasons under its belt, Survivor has lasted the test of time and remains one of the longest-running reality TV game shows. To win the game, you must not only be strategic and form alliances, but you also need to have sheer determination to overcome the challenges contestants are faced with.

And when it comes to battling it out in business, finding the craftiest ways of improving your bottom line can often feel like you’re competing for an immunity idol to send the competition packing.

Often the biggest obstacle standing between a business owner and success is working capital, and having sufficient cash flow to support your goals. Luckily alternative funding solutions can be the immunity idol that growing companies have been searching for.

Here are three ways to outwit, outplay, and outlast your competitors to the finish line of the fiscal year.

1. Outwit your bank loan challenges

When you need funds, one of the first places you likely turn to is your bank. But banks can have strict criteria and getting that loan can become an instant roadblock. Unfortunately, it’s no surprise that businesses can struggle when trying to access credit and a lack of cash could put you on the chopping block.

To outsmart the traditional loan criteria, form an alliance with an alternative funding partner who can offer you solutions such as invoice factoring — allowing you to sell unpaid invoices to access cash faster. You get paid upfront and can continue operating as usual, even if your credit rating isn’t the strongest. The important part is to form that alliance with an alternative funding partner that has a proven track record and is willing to work with you to advance your business goals.

2. Outplay the risk

Being marooned with no lifeline is a horrible feeling, so it’s important to have a support team to help avoid any risk in the business that can leave you stranded. Whether it be the risk of not getting paid on time (or at all), being subject to fraud, cybersecurity risks, or not getting cash in time to pay your suppliers or staff, you’ll want to mitigate the issues.

To start, ensure that your alternative funding partner has the experience to back up their claims. They should have their own team dedicated to assessing risky funding opportunities, and they should understand your specific cash flow challenges so they can help keep your torch lit. And since 76% of businesses are concerned about cybersecurity risks, it’s important to work with partners who are equally aware of online risks and take data privacy and security seriously.

Related Read: 5 ways factoring can clear your cash flow hurdles

3. Outlast without giving up equity

When you work so hard at growing your business, would you give up equity in the company to gain financing? Many business owners do this, turning to venture capital firms, angel investors, crowdfunding, or even friends and family to increase their working capital. But according to the University of Cambridge, 67% of companies would still rather follow a debt financing model (such as PO financing) than give up a portion of their business

Why is this the case? It may come down to predictability. Looking at your balance sheet is often easier to understand, and knowing exactly how much you are borrowing (and need to pay back) can allow the average business owner to formulate a plan that fits into their schedule. The equity model, on the other hand, can raise more questions and leave you wondering just how much of your business you’ll leave on the table.

Related Read: Is my money running out? Create a cash flow budget to find out

Make a comeback

Even if you stumble upon cash flow challenges, you can still make a comeback. Obtain your secret advantage by conducting a cash flow audit and updating your cash flow budget to accurately forecast your incoming and outgoing cash flow. Assess all the financing options available to determine which will be best at maintaining consistent cash flow to stay ahead of expenses. And of course, don’t be afraid to explore options beyond what a bank may have to offer.

To become the ultimate business survivor by making the most of alternative business funding, download The Invoice Factoring Guidebook now.

Company values rise above a major network outage

agosto 25, 2022/en Sin categorizar, Invoice Factoring/por Vawn Himmelsbach

Even when disruptions happen out of our control, our clients still need to rely on funding to keep their business going. This is the story of how our team embraced our company values, came together with a shared purpose and worked together to find a way to keep things moving for our clients—despite enormous obstacles.

Just another Friday…

On the morning of Friday, July 8, Nikita Silvestrov awoke to find that his Internet wasn’t working. He didn’t think much of it at the time and took his dog out for a morning walk. Then he checked his phone and realized that wasn’t working, either.

“I wondered, ‘What’s going on? This is a bit weird, right?’ When I got back and tried resetting my modem, I realized nothing was working,” he said. “And I couldn’t call anyone because my phone didn’t work.” So Nikita went to a nearby Starbucks where he saw about 100 people standing outside trying to access free Wi-Fi.

That’s when Silvestrov, a relationship manager with Garrington Group (the parent company of Liquid Capital), discovered there was a massive service outage at Rogers Communications—including Internet and cellular networks—affecting more than 12 million Canadians across the country. The outage also affected systems that relied on the Rogers network, including Interac debit payments and certain federal government services, as well as access to 911 emergency services.

Since his office also ran on the Rogers network, Nikita—whose job is focused on supporting long-term franchisee relationships—couldn’t work from there either. But rather than throw in the towel, call it a long weekend and take the day off, as so many other Canadians did that day, he and his colleagues banded together and found a way to make it work.

“We work with so many people who need funds day to day. Just because there’s a network outage doesn’t mean the world stops. People have to make payroll and pay their suppliers. If we don’t send cash out the door at the end of the day, they’re not able to pay their employees and suppliers.”

— Nikita Silvestrov, Relationship Manager, Liquid Capital/Garrington Group

Getting creative to keep things moving

“I ended up running around the whole day between Starbucks, the library and a couple of restaurants that had free Wi-Fi,” Nikita explained.

He knew that there was a lot riding on it. Garrington Group provides alternative financing solutions to entrepreneurs and emerging businesses, allowing them to quickly access funding without the need for traditional bank financing. Liquid Capital is part of a wider group of companies that share the same funding source and underwriting resources that fall under the Garrington umbrella.

While many companies claim that customers are at the centre of everything they do, that messaging sometimes falls apart in a crisis. But Garrington’s values came to life that day in how the whole underwriting team responded during the massive outage to keep money flowing for clients.

Banding together, through shared purpose

“Our teams knew the importance of getting money out to our clients and they did whatever had to be done, just to make sure everyone who needed money that day got their money,” said Robert Thompson-So, Managing Director and Chief Strategy Officer of Garrington Group.

Colleagues who were on the Rogers network teamed up with colleagues who were on a different network. By tethering to a network that was still in service, they were able to contact clients, submit paperwork and move money where it was needed.

“Senior management didn’t have to tell them to do that. Our people have consciously chosen to make their contribution in the world with our company. And that just speaks to the kind of company culture that we’ve tried to promote,” Robert proudly said of his team.

“We just focused on getting cash out the door, making sure that everyone got their funds that day,” said Nikita. “If you’re really passionate about your work and passionate about helping others, it shows. Everyone really banded together to get through the day.”

Keep the business beat going with accelerated funding to overcome cash flow challenges

agosto 23, 2022/en Sin categorizar, Invoice Factoring/por Sarah Schoepfer

You don’t need to lose your groove when you hit a wrong note with your financing. Overcome cash flow challenges and keep the beat going with invoice factoring.

For many business owners, growing a company can often feel like you’re improvising as part of a jazz ensemble – you and your team are trying to create beautiful music on the fly. And if you miss a note and hit a cash flow challenge, it can throw you off the beat of success.

However, just as any musician (and savvy business owner) knows, it’s not the notes that you’ve already played that matter; it’s the notes you play next that do. And often your inspiration for the next note comes from your fellow musicians.

So if you or your client need some inspiration for overcoming a wrong note, keep reading to learn how these entrepreneurs created their magnum opus, seized growth opportunities and created beautiful music (even after playing a wrong note or two).

Overcome long payment terms

Ray Bowman, Owner and President of Rayzor Edge Tree Service had plans to take his company, which provides professional, environmentally conscious tree services for commercial and residential properties in southern Ontario, to new heights. But his goals for growth initially outpaced his working capital.

As a small firm, he was constrained by cash flow, as his need to pay subcontractors quickly was met head-to-head with invoice payment times of 30 to 120 days from commercial customers, limiting the number of jobs he could accept.

“Before working with Liquid Capital, we just didn’t have the cash flow to support our growth. We were confined to doing basically a job a month or so. Now with Liquid Capital behind us, we’ve freed up our cash flow to continue to grow — and there’s no ceiling on it.”

– Ray Bowman, Rayzor’s Edge

For Bowman, tapping into the power of his accounts receivable through invoice factoring was the solution. The extra working capital allowed him to double his sales, maintain positive relationships with valuable subcontractors, while also benefitting from the business support and advice of his Liquid Capital principal.

Overcome offering early payment discounts

Similarly, opportunities for further growth were abundant for thriving audiovisual company Best Broadcast — the business was booming after a successful launch set the stage for new business opportunities to work with major companies.

At the same time, Best Broadcast was facing a cash flow crunch that was limiting the company’s ability to sustain its upward momentum. Customers were taking 45, 60 or 90 days to pay their invoices – often, hundreds of thousands of dollars were tied up in outstanding accounts receivables. While the company initially tried to remedy the situation by offering clients a five percent discount if they paid their bill in full within 15 days, the heavy discounts started to eat into the bottom line.

After taking the time to understand and evaluate the invoice factoring process, Dave Kip, CEO of Best Broadcast decided that the best way to access more reliable working capital was to put his accounts receivables to work with the help of Liquid Capital.

“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.”

– David Kip, Best Broadcast

With a reliable alternative financing solution in place, Best Broadcast immediately had access to the funds it needed, increasing cash flow and alleviating Kip’s worries around day-to-day operational costs so he could focus on his business strategy and successfully scale his company.

Overcome traditional funding solutions

Having enough staff and enough materials to fill orders are the two most important factors for running a successful manufacturing business. They also require sufficient working capital – you need to pay your employees regularly, and you need to purchase materials to fill orders.

For Summit Retail Solutions, invoice factoring was exactly what they needed to access regular cash to cover these two major operating expenses. They had purchase orders worth hundreds of thousands of dollars in the pipeline and business was booming for the two-year-old custom manufacturer of premium store display fixtures.

However, without an established credit history, the company did not qualify for traditional bank financing, and its small business line of credit wasn’t enough to help them continue growing. As their cash flow started to dry up, they struggled to fill large orders, while supply chain and payroll issues began to threaten operations.

After researching several factoring companies, Summit Retail chose Liquid Capital’s invoice factoring solution for its creativity in meeting the company’s specific needs and for its exceptional service and support.

“I honestly believe that we would not have had this success without Liquid Capital’s ability to cut through the red tape and factor our receivables. I would strongly recommend this course for other companies that require working capital to grow.”

– Ted Hope, Summit Retail Solutions

With the influx in working capital, Summit was able to draft larger contracts and drive more business. Almost immediately, they began to enjoy higher sales growth, and in just 18-months of working with Liquid Capital, sales more than doubled, going from $1.4 million to over $4 million. Now firmly established – and with the track record to prove it – Summit was soon able to secure traditional bank financing to fund its continued growth.

Overcome cash conversion cycles that can’t support growth

When the glove fits, it fits! And for many businesses, including Dig It Apparel Inc., invoice factoring fit their business needs just right.

When the co-founders came up with the idea for Dig It Handwear® —a line of utility/gardening gloves specifically targeted to women because they could protect hands and manicured nails—they knew it was a good one. What they weren’t prepared for was how good—and how in-demand—their product would be after an appearance on a Canadian TV Show, Dragon’s Den.

“We fell into the gap. A small business loan is usually about $50,000, which we qualified for, but we needed between $200,000 and $250,000—and weren’t even sure specifically how much. The bank needed more solid information to bump us up to a commercial loan, and we didn’t have it. So we were not able to get the loan secured in time for manufacturing. We needed to look at other options.”

– Claudia Harvey, Dig It Apparel

In need of financing—and fast—Dig It started exploring the options. They started talking to other banks, but didn’t yet have the relationships or track record needed. Next, they considered selling a portion of their company—fortunately, a trusted person in their business network introduced them to Liquid Capital before that became necessary.

Working with Liquid Capital enabled Dig It to expand, and offer banks the solid projections necessary to obtain traditional financing.

Overcome financial instability caused by seasonal demands

For any type of business that relies on seasonal buying cycles, finding sufficient cash flow to keep you going through the slow months can be challenging.

For Ridgeline Manufacturing, this was the problem they faced specializing in summer recreational equipment. The winter months brought lean times, and owners Nick and Julie Newman knew that they couldn’t lay off their workforce and close production for half the year. However they also didn’t qualify for traditional funding options.

Though they had previously tried factoring with other providers, but were turned off by the experience. But when they were introduced to their Liquid Capital Principal, they knew working with Liquid Capital would be different.

“With a lot of other companies, you go through tons of different people—even just to get an approval. After you’re approved, you still don’t have a dedicated contact. At Liquid Capital, I know who I’m dealing with—and I know he’s looking out for my best interests, and trying to save us money whenever possible.” – Nick Newman, Co-Owner, Ridgeline Manufacturing

With Liquid Capital there were no minimums or penalties for inconsistently factoring their invoices, and Nick liked that he wouldn’t be charged interest on money already collected. With the flexibility Liquid Capital gave them, Ridgeline was able to not only coast through the winter months, but also continue growing during the busy times.

Overcome unforeseen events

When traditional funding options just don’t cut it, invoice factoring can help businesses that find themselves in hard-to-finance situations. For Silani Cheese, they had a quality product and demand was high, however after a series of financial obstacles, they needed an influx of working capital.

Naturally the company turned to the banking facility it had in place for help. Unfortunately, certain margin criteria in the banking arrangement unexpectedly changed resulting in a reduced credit facility, forcing it to negotiate an insolvency/restructuring proposal with its creditors.

During the restructuring process, the company had repaid its bank debt using personal funds as well as financing from Farm Credit Canada, but in order to fully exit the proposal, it needed a broader financing solution—one that factoring could readily deliver.

“The other companies we dealt with just weren’t cutting it. Their financing approach made us nervous, and they made promises they couldn’t keep. When Liquid Capital came in and took over the deal, everything changed. We were three weeks into problematic negotiations with the other company—with an irreversible deadline looming—and Liquid Capital team jumped in, put everything together and closed the deal two days ahead of schedule.”

– Joe Lanzino, Silani Sweet Cheese Ltd.

Despite arriving rather late in the process, Liquid Capital impressed immediately with their face-to-face approach, deadline-driven commitment and upfront clarification of what was possible in terms of timing.

In the end, Liquid Capital negotiated the deal, completed due diligence and funded Silani on the timeline it needed—all in less than three weeks—enabling Silani to exit the insolvency proposal and repay the Farm Credit loan as well.

Different industries, same cash flow challenges

These businesses turned their accounts receivables from a daily headache into a tool to help them drive positive cash flow and ensure their companies continue to thrive.

When you have the right funding partner, you can avoid those ‘wrong notes’ in your business orchestra.

If payment delays from your credit-worthy customers are resulting in missed growth opportunities for you or your clients, Liquid Capital can help you keep your business beat going.

“You want your business to be more than it is today. You’re facing the opportunities in front of you but you’re lacking in the cash or the capital… Let us help you by showing you a light at the end of the tunnel — and the best way to do that is to accelerate that cash cycle by replacing your near-current assets with cash.” – Liquid Capital Principal

Ready to learn more about invoice factoring? Contact your Liquid Capital Principal – we’ll take the time to learn about your goals and challenges and will deliver accelerated funding solutions that hit the right note.