It makes you wonder what the President will not do to stimulate the economy.

NY Times on March 19, 2009:

DETROIT ” The Obama administration moved on Thursday to stabilize the American auto industry by creating a $5 billion fund to support troubled parts suppliers.

The program will provide supply companies with much-needed access to liquidity to assist them in meeting payrolls and covering their expenses, while giving the domestic auto companies reliable access to the parts they need, the Treasury announcement said.

Every day a new development happens to make the world more optimistic for the North American Economy. What the latest developments will mean exactly is hard to say for now, but just the fact that Congress is doing so much is very pleasing to see. Now the US Government is going to start factoring invoices that most Factoring Companies have been hesitant to accept.

As I mentioned in a prior article that I predicted that Accounts Receivable Factoring is going to play a major role in the rebuilding of our economy ended up to be quite accurate.

Not everyone is familiar with Accounts Receivable Factoring so I will give you a quick overview. In it basic form, Accounts Receivable is a Line of Credit for Businesses which advances companies funds based on their Invoices that are outstanding.

Most Factoring facilities will advance from 80% up to 90% of the outstanding invoice face value. The cash injection can be used for what ever the company needs the money for ” payroll, supplies, inventory whatever. Once the end customer pays the invoice then the reserve will be paid to the company that factored the invoice less the finance fee.

The Factoring fee is typically between 2% and 4% per month. It can be less and can be more, this is just a guideline.

Purchase Order Finance is a compliment to AR Factoring for companies that need a little more financing. This will allow companies to borrow against orders to be filled. With this financing, there are strict guidelines to follow as companies that are in the manufacturing sector often can not use this finance option.

Purchase Order Finance is not intended for companies that buy raw material and then process or manufacture it. If you are interested in the possibilities for this type of financing for your company, be sure to speak to a Commercial Finance Broker as they will have the best knowledge as to which lender would be best for your circumstance.

Best of all, most Professional Commercial Finance Brokers will be paid by the lender so you are not normally required to pay them for their services so it really is in your best interest to consult with them.

Pro-BargainHunter.com Multiple Pre-Screened Vendors competing for your business Accounts Receivable Factoring Accounts Receivable Financing