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“Truckin got my chips cashed in. Keep truckin, like the do-dah man.

Together, more or less in line, just keep truckin on.

Arrows of neon and flashing marquees out on Main Street,

Chicago, New York, Detroit and its all on the same street.

Your typical city involved in a typical daydream

Hang it up and see what tomorrow brings…”- The Grateful Dead lyrics

to their song, Truckin’.

“There is a road, no simple highway, between the dawn and the dark of night, and if you go, no one may follow, that path is for your steps alone”- Jerry Garcia quotation.

Many books have been written about the Greateful Dead and about Jerry Garcia. It has been written that they succeeded “in spite of themselves”. The lyrics of Truckin’ suggest a meandering of purpose albeit a desire to get somewhere. One might say that Jerry Garcia was telling us that there is no simple way to success. You have to find your own way there.

One of the greatest impediments to success in the trucking business is getting paid on time. What if it takes 30 to 60 days to be paid after you have delivered the goods to your customer? How do you pay for fuel, insurance, equipment leases and wages? Accounts receivable financing may be your answer. Once you have a receipt/bill of lading for delivery and an invoice that can be confirmed, you can receive an advance of 80% to 95% of the funds due to you. When your client pays, you receive the remainder due, less applicable finance charges.

Johnny Cash wrote in his song “Further On Up the Road”:

“Now I been out in the desert, just doin’ my time

Searchin’ through the dust, lookin’ for a sign

If there’s a light up ahead well brother I don’t know

But I got this fever burnin’ in my soul

So, Let’s take the good times as they go

And I’ll meet you further on up the road”

If you are “Truckin’” accounts receivable financing may help you get “Further on Up the Road” to your financial success. Why not just go to your bank for all the funds you need to grow your business? If you have great credit, two past years of successful operations, excellent bookkeeping, and no major needs for substantial growth your bank may be the best choice.

If the bank says “no” to your growing company’s needs because you do not meet their qualifications, accounts receivable financing can accelerate your cash flow to pay your payroll, your fuel, insurance and other costs. You can take on new business opportunities and grow successfully by managing your cash with this proven method of commercial financing.

Here are some questions to ask yourself: Do you need a back office to help you with your collections and operations? If you company is a startup, you may want a commercial finance company to handle one hundred percent of your collections. If your company is established and you have administrative personnel, you may not want a third party talking to your customers regarding collections, especially if you believe these contacts may cost you business. Perhaps you want something in between regarding collections, where you can be the “good cop” and the commercial finance company’s collection department can be the “bad cop”.

Do you need credit check on prospective customers? Do you need help with legal or regulatory compliance issues? Are you in a cash crunch emergency that requires you to make a decision in a very short time such as one to three days? Do you have the time to read and compare proposed terms from several commercial finance companies just as you might if you were getting a loan on your home? Are you computer literate and will you have online access to your accounts? Lastly, is the cost of these extra back office services worth the extra expense you may be charged?

Here are a few legal issues to think about: Are you required to sell all invoices for a particular shipper or can you pick and choose which invoices you desire to sell? What does the contract say about choice of law? If you have a dispute with the commercial finance company and your headquarters is in California, will the dispute be pursuant to California law and California courts, or will you be agreeing to settle any dispute in a distant state such as New York? Can you afford to go to New York? Are you giving up your right to litigate disputes with a mandatory arbitration clause? Is there an attorney’s fee clause in the contract so if you have a dispute and win, your attorney will be paid?

The bottom line: The Grateful Dead and Johnny Cash were right: keep on trucking further on up the road with accounts receivable financing; and choose your lender wisely.

Copyright © Gregg Financial Services

www.greggfinancialservices.com

• 10×8 Photograph (25×20cm)
• Facsimile from the book of accounts of the Coopers Company, 1576, (1893). Hazlitt, Livery Companies of London. An illustration from A Short History of the English People, by John Richard Green, illustrated edition, Volume III, Macmillan and Co, London, New York, 1893. John Richard Green,Unknown (creator),
• Printed on professional grade Fuji Crystal Archive Photographic Paper for clear and sharp images. Paper size 254×203mm (approx).
• Licensed Heritage-Images Merchandise
• © Copyright Heritage-Images – All Rights Reserved

Product Description
10×8 Photograph (25×20cm). Facsimile from the book of accounts of the Coopers Company, 1576, (1893). Hazlitt, Livery Companies of London. An illustration from A Short History of the English People, by John Richard Green, illustrated edition, Volume III, Macmillan and Co, London, New York, 1893. John Richard Green,Unknown (creator),

Photographic Print of Facsimile from the book of accounts of the Coopers Company, 1576, . from Heritage-Images

Accounts receivable financing is another name for factoring. It simply means selling your slow paying invoices at a discount to a factor in return for immediate cash. Factoring improves your cash flow and greatly simplifies your accounting process because once you factor your receivables i.e. sell your invoices, the factor becomes the owner and the invoices then reflect on the factor’s books of accounts. The collection of payment related to the invoices is also taken care of by the factor and you are free to concentrate on growth and expansion of your business.

Accounts receivable financing is nothing new and has been around for a long time. Earlier it was only big and reputable companies who could take advantage of this type of financing. When growing competition and stiffer lending norms made it difficult for medium and small companies to obtain financing by traditional methods through banks and other lending institutions, the financial industry gradually extended this type of financing to small and medium companies also.

Necessity of accounts receivable financing is experienced by all businesses which sell their products/services on credit and are constrained to wait for payments for 30, 60 or even 90 days. This leads to a negative cash flow situation for these businesses and they start experiencing severe cash crunch because they need to meet regular and essential business expenses like payroll, purchases, taxes, etc. In many cases such problems can be so severe that they may put a company out of business.

Bank financing is hard to come with many formalities to be completed and hosts of documents and reports to be submitted before a case for financing can even be considered for approval. However, all this still does not guarantee approval when the bank looks into their business records or past performance that has not been satisfactory.

Accounts receivable financing approval is a complete turn around. It does not operate on such principles. In fact the credit history of the seller of the invoices is of little consequence, if at all. Factors take into account the creditworthiness of the clients/customers who have to make payments against invoices. If the customer has a good reputation for timely payments then accounts receivable financing approval sails through even for those with a low credit rating/history.

Required documentation is simple and easy to greatly simplify the financing procedure and makes factoring finance approval opportunities very high. Factors also maintain their own databases of credit worthy companies and help their clients in researching companies to get to know their reputation before they decide to do business with them.

Accounts receivable financing offers other advantages which bank finances do not. It takes much less time for accounts receivable financing to be approved, to be set up and financed. A typical time frame for setting up an accounts receivable account with a factor would be just seven to ten business days. Once an account is set up, it merely takes 12 to 24 hours to credit an account against a factored invoice. The 1.5 to 3 percent factor’s fee is also nominal when you consider the enormous advantages available to a business to continue its normal business activities which otherwise may grind to a halt due to cash flow problems.

Benjamin Zander and his wife wrote a book entitled: “The Art of Possibility; Transforming Professional and Personal Life”. Their idea is that “you can create a passionate energy permeating The Art of Possibility that will be a true force in your life. You can make your own rules.” Their book is inspirational. You will be inspired if you buy and read it. The question is: how does this pertain to accounts receivable financing?

It’s all about attitude, enthusiasm and point of view regarding how to conduct your business. Can you make your own rules regarding how banks, commercial finance companies and other financial entities operate? Of course not. Can you make your own rules regarding how you utilize the financial recourses that are available to finance your business? Absolutely!

Here are three examples how to harness the power of accounts receivable financing sometimes with other types of financing to grow your B2B business.

Case Study One:

A Solar Energy Company that designed and supervised the installation of renewable energy systems was unable to obtain bank financing. They were one of the area’s lowest cost providers of solar panels, system design and supervision. One of their biggest assets was State Solar Tax Credits that are paid to homeowners who install the solar energy systems. An obligation from a State to a consumer is not within the definition of an account receivable. In other words, it could not be financed because it was not an obligation to a business. Using the art of possibility, the homeowners were persuaded to assign their solar tax credits to the Solar Energy Company. This transformed a consumer receivable into a commercial accounts receivable. Voila! The Solar Energy Company received accounts receivable financing it needed to grow.

Case Study Two:

An individual purchased an Importing Company that had been financed with a bank’s SBA loan. As collateral for the loan, the bank placed a UCC1 filing on the accounts receivable and inventory of the business. UCC refers to the Uniform Commercial Code in effect throughout the United States of America. In some respects, it simplifies the process of lending, selling and borrowing nationally. In other ways it is very complex. A UCC1 filing by a bank usually prevents any further financing because there is no collateral left to be financed. It is similar to a first mortgage loan on a house. If you have a 95% loan on your house, no other financing is available on the house because there is no equity to lend on. Using the art of possibility, the Importing Company was successful in convincing the bank to subordinate their UCC1 filing to another commercial lender’s UCC1. The Importing Company convinced the bank that it would be mutually beneficial to lower the bank’s UCC1 lien to a secondary position to allow a commercial finance company to offer new accounts receivable financing and inventory financing. Voila! The Importing business has a new credit line available for growth. It is now more profitable and the bank is more likely to be repaid. This is a win-win situation.

Case Study Three:

A start-up Clothing Company involved in manufacturing, distributing and designing T-shirts landed a substantial purchase order for their product. The product was to be made in China, and the Clothing Company lacked sufficient funds to pay for the costs of manufacture and distribution. Using the art of possibility, the Clothing Company obtained a letter of credit to guarantee the Chinese factory of payment, purchase order financing to pay for the T- shirts upon delivery, and accounts receivable financing to pay the purchase order company upon delivery of the goods to the customer in the US.

Accounts receivable financing can help your B2B business realize the art of possibility for growth and profits. Voila!

Copyright © 2007 Gregg Financial Services

www.greggfinancialservices.com

The Merriam-Webster Online Dictionary defines “secret” as:

“1 a: kept from knowledge or view : hidden b: marked by the habit of discretion : closemouthed c: working with hidden aims or methods : undercover d: not acknowledged : unavowed e: conducted in secret 2: remote from human frequentation or notice : 3: revealed only to the initiated : esoteric 4: designed to elude observation or detection 5: containing information whose unauthorized disclosure could endanger national security”.

As used in this article, secret means: revealed only to the initiated; kept from knowledge or view; and designed to elude observation or detection.

The first secret- “revealed only to the initiated” relates to the fact that most schools, even business schools, do not teach the subject of factoring or purchase order financing; most banks do not offer these financing facilities as products. Therefore, it is not surprising that many businesses are unaware of the cash potential that lays dormant in their business invoices.

Let’s suppose you own a small to medium business and you depend on customers paying invoices within a 45-60 day period for your working capital. In essence, you are extending credit like a bank to your customers. For that period of time your cash is tied up in your invoices- your accounts receivable. This limits growth and may create problems regarding meeting payroll and paying your suppliers. Accounts receivable financing is the process of selling your invoices for cash as soon as they are issued which allows you to make more effective use of your assets. Purchase order financing is the process of obtaining a third party commitment to pay your suppliers as soon as products are received by your clients (in advance of payment by you or your client), based on the surety of an accounts receivable financing arrangement.

All businesses are limited in their growth and profits by the amount of capital and cash flow available to take advantage of business opportunities. The availability of virtually unlimited cash creates a powerful paradigm for potential growth. It also can expand your thinking about what business is possible and how you might go out and develop new business.

The second secret- “kept from knowledge or view” relates to the practice of non-notification factoring. Some business people are concerned that working with a factor, an accounts receivable financing company, may not be viewed favorably by their customers. In many cases it is possible to structure a transaction legally so that the accounts receivable financing is transparent to the ultimate customer.

The third secret- “designed to elude observation or detection” has to do with your business plan and how the way you think about the world can affect your success. In 2006 Prime Time Productions produced a film and a book called “The Secret”. The film dramatically describes the “Law of Attraction” which asserts that people’s feelings and thoughts attract real events in the world into their lives. Can your feelings and thoughts attract more business and success? Is the visualization of what you want an aid for manifesting your business goals? Is The Secret “just a new spin on the very old (and decidedly not secret” The Power of Positive Thinking (a book by Norman Vincent Peal written in 1952) wedded to ‘ask and you shall receive’ -as opined by Karin Klein, editorial writer for the Los Angeles Times? Did The Secret fail to discover the real roots of powerful thinking?

In the book, “The Diamond Cutter”, Geshe Michael Roach examines The Budda on Managing your Business and your Life. Roach graduated from Princeton University with honors, studied the ancient wisdom of Tibet and traveled to the Tibetan Lamas at the seat of His Holiness, the Dalai Lama. In 1983 he took the vows of a Buddhist monk.

His teacher encouraged him to enter the world of business. Mr. Roach choose the diamond business. He hid the fact that he was a monk and maintained a façade of a normal American businessman on the outside. The business developed from nothing to a one hundred million dollar per year business.

The original book, “The Diamond Cutter” is the “oldest dated book in the world that was printed rather than being written out by hand. The British Museum holds a copy that is dated A.D 868.” It is a written record of Buddha teachings from over 2,500 years ago. In brief, the central principles are: 1) business should be successful and make money in a clean and honest way; 2) you should enjoy the money and stay in good health; and 3) you should be able to look back ay your business and say your years of doing business had some meaning leaving some good marks in the world. I highly recommend “The Diamond Cutter” vs. “The Secret”.

The bottom line: accounts receivable financing and purchase order financing may be the secrets to your business’ financial success. If you read and follow the principles of “The Diamond Cutter” you can expand your opportunities for exponential growth based on the 2500 year old teachings of Buddha, as explained by Mr. Roach.

Copyright © 2007 Gregg Financial Services

www.greggfinancialservices.com