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Why Invoice Factoring is Important in Food Distribution
Invoice factoring, which is also known as accounts receivable financing, is an important part of many different industries, including the food distribution industry. In the world of food distribution (just as it is in most other industries), cash flow is a serious problem that in its extreme cases, can even sink a company. In other cases it can prevent expansion and growth, which is not a good situation to be in either.
Here are 3 reasons invoice factoring is an important service to have in the food distribution industry:
1. It helps fight back against the rising cost of fuel. It’s pretty much guaranteed that you will have to raise your rates frequently as the cost of fuel goes up, but when do while you are waiting for those new rates to take effect? You need to announce the rate increase and then wait a short time, but your business can’t afford to wait. This is where invoice factoring comes in to fill in those gaps. By leveraging the power of the invoices you have out that have not been paid yet, you make it possible to continue paying your fuel bill until those new rates kick in.
2. You receive the flexibility to extend payment times for your vendors. Sometimes in order to get a higher price for the goods you are distributing, it may necessary to extend your vendors’ payment times. There is a growing demand for extensions, but if you do not have the line of credit offered by invoice factoring, then you will be unable to offer this service. Then you will be cheating yourself out of a high volume of income because you can’t extend payment times in return for higher payments on the back end.
3. New distributors who are still growing will have to deal with lower profit margins as they begin to prove themselves to their customers. This makes working from check to check a reality, but it certainly isn’t a good reality. What can you do if you get offered a major contract and then aren’t able to fulfill it because you don’t have the cash to do so? You will be missing out on an important opportunity to expand and grow your business if you don’t have the financial advantage of invoice factoring to help you out.
Case Study
GTA Fruits is a distributor of tropical fruits that works closely with numerous major grocery store chains. By managing and financing GTA’s accounts receivables, the company has been able to grow rapidly, enjoying not just growth but also a greater need for cash flow, which is growing exponentially.
Financing for the Food Distribution Industry
Invoice factoring has worked in numerous different industries. Invoice to Cash, also known as ITC, actually specializes in helping small to medium sized business grow as they leverage those unpaid invoices. Low risk small business financing options include:
– Cash right in the moment you need it, whether it’s to fund the next contract, enable vendors to pay higher prices to you later, expand the business, or just pay your bills.
– Accounts receivable administration will improve your cash flow by placing someone in charge of managing it more efficiently. Collection becomes a breeze as well when you take steps to improve the workflow of this project.
– A transportation management system enhances your ability to serve your customers, thus raising your bottom line.
By combining these three services, you are sure to discover the growth that has been just around the corner for so long. Leverage your invoice so you have the cash to fill the next big order.
Talking to your Mortgage Lender for a Loan Modification
Homeowners who are struggling to pay their mortgage and are considering applying for a loan modification to save their home from foreclosure should be aware that how you talk to your bank will make a huge difference in the final outcome of your application.
Mortgage lenders do put a lot of emphasis on the interaction they have with their borrowers. Homeowners often end up thinking that simply sending all the required documents and submitting the application is all they can do. The fact is you need to do much more if you are serious about saving your home. You need to engage your mortgage lender in a way where they will not only know about your situation but also try to expedite your application approval sooner than the timeframe they give you.
The first aspect of engaging your mortgage lender is writing a good hardship letter. You need to put in a fair amount of thought in writing this as it is the hardship letter which will inform your bank why they must consider you for a loan modification. It tells your bank about your financial situation and why it is getting tougher for you to meet your mortgage requirements. A good hardship letter can capture your banks attention and allow your application to progress further.
Just be careful not to go overboard on your hardship letter. The letter should not sound so extreme that your lender will feel you wont be able to meet even the modified mortgage payment if they approve your application.
The next step would be to complete your financial worksheet. This is the single biggest reason homeowners get denied or approved for a loan modification. You dont want to go overboard listing so many expenses and being so negative at the end of the month that even a loan modification wont help you save your home or get you out of your financial hole. You want to give the minimum payments you are paying on credit cards along with the exact car payment and current mortgage payment. For example, when it comes to expenses like your grocery bill or gasoline bill there is a little more flexibility with those numbers since your credit report does not report on these areas.
Once you have submitted your loan modification application, it is absolutely essential you follow up regularly with your bank or mortgage lender. Remember, they are talking to thousands of homeowners each day and your file could end up at the back of the pack if you do not follow up at least once a week. You need to make sure your case stays active and you are moving up the line to get your loan reviewed. Follow up in regular intervals and be courteous, each time politely inquiring if they need any information or documentation to expedite the review process.
If you are not sure about how to talk to your bank or you feel you need some assistance for your specific situation, try researching on the internet or get a guide which would not only provide you with step by step instructions on how to modify your mortgage but also give you essential tips on how to talk to your mortgage lender.