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Small Business Owners Use Factoring Invoices Discounting to Double Exports

As top trade officials from the United states embark on a national campaign to recruit small-business owners to double exports by 2015 as part of the current goals within the administration, factoring invoices comes to light as a possible method. Only about one percent of nearly 30 million small and medium-size firms in the US export goods. The National Export Initiative (NEI) is an effort to lead to long-term, economic growth for the United states that is sustainable. The target is to double the amount of exports in the succeeding five years, which is then equivalent to two million jobs for the jobless.

President Barack Obama announced the export initiative in 2010, which asked small and medium-size businesses to export, because the more small businesses export, the more they produce; and the more they produce, the more revenues they have to hire employees.

At present everything is on the right track of achieving 15% yearly gains, which is a percentage needed to obtain the goal and this year to November the exports are up around 17%. But continued progress might be tough since the administration is using a benchmark of when exports were at a three-year low in 2009.

US companies could earn increased revenues if they were to begin exporting. However, in order to prepare they will need cash, and one method of achieve this goal is to begin factoring invoices. Factoring invoices have been around for more than a thoUSAnd years old. Initially, it was a financial strategy that was used at a time when goods were shipped from the colonies to the Americas. Factoring is not a loan but it’s the purchase of financial assets, also known as receivables. It differs from traditional bank loans as follows. Two parties are involved in bank loans while three parties are involved in factoring. In factoring, the value of the receivables matters. Banks base their decisions on a company’s credit worthiness.

Here is the process… A company that does factoring invoices takes on the process of due diligence that can take around two days. Once this step has been completed, the client is at liberty to offer invoices for purchase. Once the invoices are received, the company can now start checking the creditworthiness of each debtor in the invoices while making sure that the sale was completed. Next the debtor is advised of the purchase of the invoice by the factoring company. It is pretty simple, really. After all that, the client then acquires their cash. At the end of the credit period the debtor will then pay the factoring company directly, and the transaction is therefore complete.

The government plays a huge role in making all these possible by opening markets and increasing US exports and those companies that make use factoring invoices will be able to keep their business operational, earn more along the way, and employ more employees.

If you have questions about how factoring invoices could assist you with setting up exporting services, or if you are seeking an alternative funding source for small businesses, simply search online for the keywords accounts receivable factoring, or factoring invoices, and read the hundreds of thousands of articles on the topic.
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