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The “Guardian” Postgraduate Guide: What to Study, Where to Go and How to Finance it

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Q. Despite a significant increase in our sales, our bank is refusing to increase our overdraft facility and have suggested that I consider factoring. Please could you let me know whether I should be concerned about what my customers will think?

A. In the UK nowadays, over 40,000 businesses use invoice finance. This sector is currently growing by double digits year on year. Invoice finance is a cost effective and well established alternative to overdrafts and traditional bank funding. Some years ago invoice financiers were perceived to be the lender of last resort, with companies using a facility when they were experiencing a downturn in sales and cash flow pressure. However, nowadays, a larger number of businesses turn to factoring, invoice discounting and asset based lending because they are trying to keep up with their ever increasing order book!

So, in terms of how your customers may perceive you using this product, they should see it as a positive form of finance allowing your business to best meet its cash flow requirements to underpin its growth. Dependant on your turnover level, an invoice discounting facility may be the right solution for you. That said, if you are still concerned about perception, please talk to us about various confidential facilities which may be available to you. This way your customers will not be aware that you are using any form of external funding.

Q. I run a relatively new start business and find it difficult to manage my cash and plan ahead because I can never gauge how much my factoring facility will release. To make matters worse my customers seem to take forever to pay me and giving credit terms is common place in the countries where I trade. How can I make life more predictable / easier?

A.Many companies use their creditors to ease the cash flow of their business, however pushing too much pain into your suppliers can be detrimental for your business relationships as well as late payment potentially adversely affecting your credit rating.

You are absolutely right that overseas transactions can often carry a longer debt turn, be it down to local customs in payment terms or language barrier in chasing the debt. The longer the debt is outstanding, the higher the risk of the debtor failure which will have a greater impact your business.

However, your factoring company should provide you with this collections expertise. It is not clear why you can’t forecast the level of funding available to you from your factoring finance facility. Various facility nuances such as your lender’s funding restrictions on the percentage of export debt, percentage of any given customer, and even your customers’ rating can all affect the amount you receive from each invoice.

There could be a number of ways to help make life easier. The first is to talk to your finance provider and get them to look at a non-recourse finance solution, this will increase the funding period and provide protection against non-payment in the event of debtor failure or sometimes even in cases of protracted default. Alternatively if level of exports or the level of exposure to your top customers is an issue which falls outside your funder’s criteria, then we can look at finding you an alternative funder who can take account of your business needs.

• Cut your admin costs typically by at least 60% and making your business over 150% more efficient
• Automate Journal postings to your TAS financial ledgers: Sales Invoices, Receipts etc
• High speed update of TAS Customer and Supplier records with over 70 separate items of data
• Import and update your Budgets to TAS, using 12 or 13 period financial years and 3 budget types
• Handle multiple Customer and Supplier code changes from a simple spreadsheet

Product Description
By eliminating the duplication of data entry and reducing errors, financial controls are more effective and you gain greater business accuracy. MultiTAS Business Manager Finance contains productivity tools for the TAS Sales, Purchase, Nominal and Cashbook ledgers.
Achieve this whilst gaining the confidence of 100% accuracy and the satisfaction of a transformed bottom line.

MultiTAS Business Manager Finance

The factor then bears the credit risk for the accounts and finally receives the sum from the customers. It is among one of the most effective and efficient form of financing used these days. Factoring has been in existence since the beginning of trade and commerce. It can be traced back to the period of a Mesopotamian king Hammurabi. However, an extensive use of the concept began in American colonies before the revolution started. During those times raw materials like timber, fur and cotton were shipped from the colonies and before they reached the destination merchant bankers in London and other parts of Europe used to advance funds for the raw material. The practice was very beneficial to the colonists, as they didn’t have to wait for the money to begin their harvesting again. Basic work of factors of colonial times is similar to factors of conventional times. They have the same job of making advances against the account receivables ( http://www.hjventures.com/factoring/accounts-receivable-financing .html ) in order to help them in continuing with their job even before they are paid for their sale. With the Industrial Revolution the concept of factoring got narrowed down to credit. In the 60’s and 70’s with an escalation of interest rates there was a surge in private factors. The trend strengthened in 80’s with further increase in interest rates and changes in the banking industry. With various expenses and inflexible rules involved with banking, factoring is a safe and easy method for financial expansion and growth. Working capital arranged through factoring is an easy means to cover purchasing, operating and other pay roll costs and provides the much-needed freedom from varied book keeping functions like credits and collections. All these attributes have made ‘factoring’ a buzzword in the financing market. Learn more about http://www.hjventures.com/factoring/factoring-glossary.html

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http://myfreeinfo4u.com/finance/business_finance_expert_series_the_history_of_factoring.html

To have a bright career prospect, everything revolves around how much you are educated. But to have a good education, you have to pursue higher studies and for that you need to have sizeable funds available to you. In the present circumstances, pursuing higher education is not any more an expensive affair and for the same, you can rely upon student finance. Through this loan program, you will be able to extract the funds to maintain your education expenses in a convenient manner.

The program is flexible and offers a package attached with the best terms and conditions. Students with a history of bad credit can also apply for this loan package to take care their educational expenses. the amount derived can be use it for purposes like paying admission fees, hotel dues and mess charges, expenses on books and computers along with some to tackle personal needs.

Students can derive the funds basically from various sources, but it is the federal government through which you derive the funds with the best possible terms and conditions. Federal loan is offered to you as Stafford and Perkins loan schemes. The interest rate charged is comparatively low. This scheme of the finance is meant only for the students belonging to the economically weaker section.

Other than government agencies, finance for students is also offered by private lenders. The loans offered are categorized in to secured and unsecured form. Secured form of the funds offers a bigger amount at comparatively low rates. On the other hand, unsecured form of the funds can be derived without any collateral.

The repayment tenure too is flexible, as you have to start making payments only after completion of the desired course and that you have got a suitable employment.

Student finance makes it easy for you to undertake a proper education worrying about the financial hassles.

One of the biggest challenges for new and growing importers, resellers and wholesalers is getting a stream of orders from great clients and not being able to fulfill them because they lack the capital to do so. It is ironic, but true.

Going to a bank for business financing will seldom help. Why? Well, banks are happy to give you business loans if you have lots of collateral. However, banks don’t consider purchase orders to be collateral. This puts you, the wholesaler, in a bind. You have the order but you can’t get the money.

Fortunately, there is a solution that is better than a business loan. And it is tailored specifically to importers and wholesalers. It is called purchase order financing.

What is purchase order financing? It’s a tool that provides you the necessary financing to pay your suppliers using the purchase order as collateral. It enables you to deliver the goods, close the sale and book the revenue. When used correctly it can help owners grow their companies exponentially.

Although po financing is a great tool, it only works from companies that buy goods from other parties (or import them) and then resell them. It also works for companies that use 3rd party manufacturing partners. Unfortunately, purchase order financing does not work for companies that do their own manufacturing.

So, how does purchase order finance work?

1. You get a confirmed purchase order from your client

2. The purchase order finance company pays your supplier

3. Your supplier ships the products, which are delivered to your customer

4. Once your customer pays, the transaction is settled

As you can see, purchase order funding is fairly straight forward to use and works well with most companies. It is also fairly easy to obtain. The main requirements are that you have a solid purchase order from a reliable customer and a well run business. It is also common to combine purchase order financing with accounts receivable factoring (also known as factoring). When used correctly, the combination of these two financing tools can help reduce the overall transaction costs and enhance your profitability

On average, purchase order financing works best in situations where the client has a profit margin of at least 25%. However, most purchase order finance companies can work with lower profit margins if the transaction is large or has exceptionally good customers.

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Bharatbook.com is proud to announce the new report “International Trade & Pre-Export Finance 2nd Edition” (http://www.bharatbook.com/detail.asp?id=1112).

The second edition of the best-selling International Trade Finance: A Practitioner’s Guide is structured as a detailed and practical guide to established and emerging techniques in successful trade finance. Across 9 chapters it explains the practical issues involved in the successful application of modern trade finance practices. Interest areas: trade finance, commodity finance, pre-export finance, emerging markets, structured finance.

Introduction

The second edition of this practical book is the invaluable guide to successful trade finance. The book will help the practising trade financier and those seeking entrance into this field of finance to overcome problems encountered and understand the merits of this type of financing.

Across nine chapters it details practical issues involved in the successful use of trade finance techniques including:

ECA financing,

guarantees,

LCs,

standby LCs,

structured LC transactions,

trade finance and pre-export financing,

forfaiting,

countertrade,

tolling, and

fraud detection and avoidance.

The new edition features expanded coverage of structured trade finance, and details ten simple methods to avoid fraud. There are also a number of standard documentation specimens including a variety of letters of credit, forfaiting terms, and escrow agreements.

For more information kindly visit : http://www.bharatbook.com/detail.asp?id=1112