Earlier this month, ABFJournal.com, cited a report from the National Association of Credit Management (NACM) that the small business factoring experts at The Factoring Blog thought would be of some interest to our small business owners looking for financing. In a nutshell, the ABF Journal’s Credit Managers Index (CMI) dropped from 54.5 to 53.4 in July.
The article reported the difficulty in predicting the long term effects that the nation’s drought is bound to have on manufacturing factoring customers and invoice factoring clientele that are service providers, which has been hit hardest by the decline, says NACM.
The report indicated a stabilization in credit applications, which dropped from 57.5 to 57.2 between June and July. Dollar collections also dropped, along with a decline in dollar collections. The favorable factor index (the index that measures all of the optimistic components of the report) also dropped from 60.2 to 58.9.
If you’re having trouble applying for a credit card, small business factoring may be the best option for your firm because the process requires no credit check. With dollar collections at an all-time low, it may be time to factor your receivables. Though your clients whose invoices are factored will be subject to credit check, after a 3-5 day approval, invoices take 24 hours to advance.