Can Single Invoice Factoring Help Your Small Business Cover Health Care?

Accounts receivable financing for small businesses can convert their accounts receivables into cash on delivery, which can help pay for health care costs for their employees. New research has been released revealing that 17 percent of small businesses currently do not offer health coverage due to the red tape and high costs. Successful health reform could yield some serious benefits for small businesses in the United States. The research also revealed that 78% of those small businesses who do not offer health coverage would like to offer it to employees. Source: U.S. Public Interest Group (USPIRG).

Here's how accounts receivable financing could assist small business owners with being able to afford health care coverage for their employees.

Business owners usually have accounts receivables ranging from 30 to 60 to 90 days out. So, rather than waiting for these accounts to be paid, small businesses can convert payments on terms to cash on delivery faster, and then they can apply these funds to health care costs.

The research also revealed that small business owners who do make the sacrifices necessary to provide health care think that it is a smart business strategy to increase employee productivity.

Accounts receivable financing benefits businesses that do not get paid for 30 to 60 or 90 days by advancing up to 90 percent against invoices. The factoring company will look at the creditworthiness of the client's customers. Funds are often provided in 24 hours, and a commission fee is involved.

Today, single invoice factoring, also known as spot factoring, has become popular, as factors do not expect to buy 100 percent of a company's receivables.

Factoring has become a highly effective cash management tool today, with the recent economic downturn. It is most often small businesses that experience cash flow problems during a recession, and many employers find it difficult to meet payroll, buy supplies, let alone pay benefits and Workers Compensation. Invioce factoring allows small businesses to obtain funds based on the money they know will be paid by their customers.

Factoring is not the same as a traditional bank loan. Rather it is the purchase of financial assets, or accounts receivables. Bank loans involve two parties, while factoring involves three. Banks base their decisions on a company's creditworthiness, whereas factoring is based on the value of the company's receivables.

Most factors' professional rates are competitive because each client's circumstances vary, which may have an impact on the fees.

Accounts receivable factoring has been around for more than 4,000 years.

???????