| By :
Kristin Gabriel
A recent poll asked successful entrepreneurs what they personally believe affects the success or failure of a startup business today. They (549 founders) came from all industries, including computing, electronics, health care, and even aerospace. The top most critical success factors included learning from their mistakes and their successes, previous work experience, a good strong management team and good luck. 98 percent said prior work experience was a very important factor. Some of the most common questions asked on the government's Small Business Administration (SBA) website are: How do I get a small business loan ... or grant? How do I get started in a business? How do I find an investor for my business? What are the interest rates, and terms or fees that the SBA requires on its Guarantee Loan program? As small business entrepreneurs head into 2010, following are some real tried and true financial aids that can help any business grow. You can start by not wasting money. By using good financial strategies, you can stick to the plan to help lower operating expenses. Review your expenses to make sure you are not paying double for anything. Look at the year in quarters, then set aside time each quarter to review your expenses. You will most certainly find areas to cut back. For example: Do you rent or lease a car or truck? Did you know that a company vehicle is best purchased because they can be depreciated on your company tax returns. Plus you'll get a higher return on your investment after the vehicle has been paid off, than leasing. However, think about leasing your computers, which is usually a tax deduction, so that you can always trade them in for newer technology when the time comes. Now more popular than ever before, another financial business strategy is to begin factoring your outstanding invoices. An invoice that won't be paid for 60 to 90 days isn't doing your company any good today. However if you find a factoring company to factor one or more of your outstanding invoices, you can use the money wisely to invest in your business and grow faster. Many factors today do what is called "single invoice factoring" where they will spot one invoice at a time. Accounts receivable factoring is particularly helpful if you need cash in a hurry because once a factor receives your application and reviews your invoices, you can receive payment within as little as 24 to 48 hours after they have pre-qualified the vendor that owes you the money. Remember your credit isn't checked, but the vendor that owers you the money will be pre-qualified by the factor. Factoring companies, just like a bank or any commercial financial institution, charges a fee for its services. A factoring company will first examine your invoices and check the creditworthiness of your customers. You should be prepared to show the factor these following: 1) A current financial statement; 2) An accounts receivable aging report; 3) A certificate of incorporation or partnership; agreement; 4) Proof of insurance; and 5) Invoices and other business documents. A factor will take charge of collecting your receivables, so they will want to make sure your customers pay their invoices on time. Once you have selected which invoices the factor will purchase, they will typically pay you an advance; for example, the factor might pay you 80 percent of the total amount of your invoices and then reimburse you the other 20 percent once your customers pays the invoices. A factor will take anywhere from 3 percent to 7 percent or more of the total that they collect. Factors' fees vary depending on the size of your invoices, your customers' creditworthiness and the number of days (30/60/90) until the invoice is due.
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