Consumer Receivable Financing And The Business Owner
For the business owner whose business sells directly to the consumer consumer receivable financing provides an innovative and nontraditional means of enhancing the cash flow of the owner’s business. Consumer receivable financing involves the business owner selling his/her performing consumer accounts receivables.
The consumer receivables consumer contracts are purchased at a discount with a bad debt reserve set aside to offset any possible defaults. The advance which the business owner receives is usually about 70 to 85 of the principal balance on the consumer contract. The terms range from twelve months sometimes six months or even less up to five years. Usually the maximum amount of the consumer contract would be about 15000 although there are situations where this figure might be increased to as high as 25000.
If you are a business owner whose industry or business is one which traditional lenders have difficulty understanding and relating to why not consider the nontraditional benefits which consumer receivable financing has to offer. Traditional lenders like to have something they can repossess in order to get comfortable with the transaction and so they are not comfortable working with a business owner who works off of unsecured consumer contracts. Likewise many lenders are not comfortable with businesses which have consumer customers with marginal credit.
Access Funding Center Inc. can work with business owners which many traditional funding sources would not be interested in or able to work with. Interestingly the reality of the consumer finance industry today is that most companies who do purchase consumer receivables will only purchase ‘A’ credit paper. Many times people who have excellent credit do not even need financing. The people who actually do need help with financing are the ‘B’ credit score people. It is the ‘B’ credit risk people which Access Funding Center Inc. can help the business owner with. Why let these people walk away from your counter without the benefit of your product or service when Access Funding Center Inc. can help you make them profitable paying customers?
After having provided a financing option for the ‘B’ credit risk consumer the business owner has the further opportunity of selling the paper to enhance their cash flow position. There are many benefits to selling one’s paper either on a month to month basis or selling a large portfolio which the business owner may have been holding in house. These benefits will be discussed in a future article.
About the writer:nbsp;nbsp;Dr. Anthony F. Cicone the owner of Access Funding Center Inc. received his certification in the cash flow industry on Feb. 14 1996 through the International Factoring Institute Center for Business and Professional Development at the Open University. At that time Dr. Cicone was conferred a Diploma as a Certified Factoring Specialist CFS.
On April 2 1996 Dr. Cicone was enrolled as a member of the National Association of Factoring Professionals.
On May 14 1999 Access Funding Center Inc. was incorporated in the state of South Carolina.
Dr. Cicone was named “top grossing broker” for MFSI for 2002
Dr. Cicone has been the subject of several articles in the American Cash Flow Journal. Dr Cicone also actively contributes articles to the American Cash Flow Journal.
In January of 2003 the American Cash Flow Association designated Dr. Cicone as a Master Consultant in the areas of Consumer Receivables and Unsecured Business Loans.
Also in January of 2003 Dr. Cicone achieved the highest level of recognition in the cash flow industry when he was named to the Million Dollar Club.
In July 2003 Dr. Cicone became the founding president of the South Carolina Chapter of the American Cash Flow Association.
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