How cable installers can benefit from factoring receivables Business Реклама Recent Posts « » How cable installers can benefit from factoring receivables September 15th, 2011 | Author: admin How Cable Installers Can Benefit From Factoring Receivables

The cable installation business can be very profitable – if managed properly. Most cable installers operate as subcontractors for large telecommunications or cable companies, such as AT&T, Adelphia or Comcast. This can be a great business model that makes a tidy profit for the cable installer. These companies make great customers and provide constant work and reliable payments.

Although working for large companies can be a great source of revenue, business owners need to get used to the fact that they pay their invoices 30 to 60 days after the work is completed. That means that as an owner, you must cover all payroll and all other business expenses while waiting to be paid. This can be tough, especially for new or growing businesses.

When faced with a cash flow challenge, most installers go to their bank hoping to get some business financing. However, they soon learn that getting a business loan is very hard. As a matter of fact, few loans are ever granted to cable installers. Fortunately, business loans are not always the best solution to this problem. In fact, there is a solution that works better than a loan. It is called factoring.

Factoring receivables can provide you with a reliable and predictable cash flow. It provides you with a substantial advance on your invoices, ensuring that you have funds to pay employees and suppliers. Receivables factoring works as follows:

1. You perform the work and send an invoice to the Cable or Telecommunications company

2. You send a copy of the invoice to the factoring company. The company provides you with an immediate advance. The advance will be between 75% and 85%

3. Once your client pays the invoice, the factoring company will give you with a second advance (the remaining 15% to 25%), less a small service fee

The fee will vary based on how much you invoice per month and can range from 1.5% to 3% per month.

One of the most attractive features of factoring invoices is that it is easy to obtain. Most cable installers will qualify provided that they do business with good customers (such as large cable companies) and are free of problems. Factoring invoices is an ideal solution for both established and new companies and can help propel your business to the next level.

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