Factoring Won't Cost Too Much!
Are you PASSING UP SALES on new larger ticket contracts or orders due to lack of
Do you not pay SUPPLIERS on time and miss up front, volume, or early pay
Are you having a hard time meeting PAYROLLS on time?
Have you had a hard
time paying TAXES on time?
IF YOUR ANSWER IS YES TO ANY OF THE ABOVE
YOU PROBABLY SHOULD
LET US SHOW YOU WHY!
PASSING UP SALES due to lack of cash?
Increased Sales = Increased Profits
The most dramatic impact of factoring is to allow you to fund sales beyond breakeven
where your profit margin now goes to the bottom line instead of covering overhead.
Variable Costs / COGS
Fixed Costs / Overhead
Approx. Cost To Factor *
Money In Your Pocket
% Of Sales
25% 17% 12.5%
5% 13.5% 17.5%
N/A 1.3% 2%
5% 12% 15.5%
How are you going to complete the order or sale if you don't have money to get the
materials and pay for the labor and taxes? This is where Northwest steps in: By
giving you cash for monies tied up in accounts receivable now!
Don't pass up opportunities!
The customer may not contact you again so you won't only miss this sale but possibly
future ones because the customer may assume you can't do future projects either.
you can't give the best service, have the highest quality, and the lowest price. Companies
that do go out of business. Your customer expects service and quality at a fair price. If
they want you to in essence be their bank you can probably include the cost of financing
in your pricing.
Factoring is like having my customers pay for labor and materials as soon as the
billing is done!
NOT PAYING SUPPLIERS on time and missing up front, volume, or
early pay discounts?
Decreased Costs = Increased Profits!
|Take Advantage of Up Front Cash Discounts!
Many times there are cash discounts of up to 5% that you can take advantage of. With an
average cost of 2% for 15 days to obtain the funds you can actually save money on
Take Advantage of Volume Discounts!
Do you know what materials you will need for the next 30 days? Make one purchase from
you supplier and get a volume discount of 10% or more. With an average cost of 4% for 30
days you can save on materials!
Take Advantage of Early Pay Discounts!
Most supplies offer a 2% net 10 discount if you pay by the 10th of the month. With an
average cost of 2% for funding you wont make money but you will build your credit
rating for future line increases which will decrease costs.
Build Your Credit Lines for FREE Working Capital!
One of the biggest mistakes a company can make is not building a good credit history.
When the busy season comes, they would like more credit, their suppliers credit manager
cannot approve the increase due to a poor pay history. With a good credit history you can
virtually double your supplier credit for a 30 day period during your busy time.
Order Larger Volumes to Save on Freight!
One of the hidden savings is when you can ship in larger quantities. You can not only
get volume discounts but can cut back on the number of freight bills by having fewer
shipments and not paying higher less than full load rates.
Having a hard time meeting PAYROLL?
Avoid Cost Increases = Maintain Profits
Avoid Loss of Productivity
Is it reasonable to expect employees to give a 110% effort when they are not sure when
they will be paid, or whether their check will be good? Having employees wait to cash
their checks for a few days can help cash flow but it has serious drawbacks. Loss of
productivity is the usual one. If it happens repeatedly normally employees will look to go
Avoid Costly Turnover of Help
How costly is it to loose an employee? First have to spend money to market for a
replacement. Then you have to spend a lot of valuable time with the interview process.
Finally after you have found the right person you then have the expense of training the
new employee. Also a new employee is never as productive as the old one until they are
Obtain Peace of Mind
One of the most difficult challenges an owner must face in business is meeting payroll
deadlines. This is the one area that is not strictly business, to the employee a paycheck
is a personal matter. Monies in accounts receivable do not meet a payroll. It is hard to
put a price on the peace of mind that being able to meet payrolls on time brings. Usually
it frees your mind to concentrate on other more productive matters like making sales.
Having a hard time paying TAXES on time?
Contain Costs = Maintain Profits
|Avoid Penalties and Interest Expenses.
As you gear up, your tax liabilities gear right up with you. Labor & Industries,
Unemployment, Federal withholding, FICA, FUTA, B&O and state sales taxes all increase.
Since taxes are not directly related to physically getting the job done and out the door,
usually they are the last thing to get taken care of. Thus, you incur costly tax penalties
and interest charges. Avoid those penalties and interest charges that add to costs and cut
Protect FREE Working Capital.
Delinquent tax payments are a matter of public record. Today, most credit granting
institutions have records of any and all tax delinquencies. This can have a large impact
in the future when you try to obtain credit from new suppliers and vendors. If new
suppliers or vendors turn down your credit, you miss out on new free working capital. In
addition it probably will hinder you from getting increases in credit from your current
vendors which also will limit your free working capital.
Protect Ability to Obtain Equipment.
As you grow, sooner or later you will need to obtain additional equipment. You will
want long term financing for this equipment rather than using your short term capital to
avoid causing cash flow problems. A credit history with delinquent tax problems will make
obtaining financing for this vital equipment more expensive or in some cases virtually
impossible to obtain. Maintain your credit rating and prevent increased costs.