The Benefits of Consumer Receivable Financing Part 3
Author: Anthony Cicone
Author: Anthony Cicone
The first two articles on consumer contract financing (ie. financing consumer receivables, financing retail installment contracts, financing consumer notes, etc.) enumerated eight distinctive benefits which financing consumer contracts offers. There are numerous other benefits associated with consumer contract financing which will be addressed in part three of this series of articles.
~The client may leverage off their customers' credit. A company seeking to finance their consumer receivables does not necessarily need to be profitable or in business for at least two years. Likewise, if you are looking into the possibility of financing your retail installment contracts, you most likely will not be required to meet the assorted credit criteria required by banks and other traditional financing sources. The non-traditional funding source, while not completely ignoring your creditworthiness, will focus most heavily upon the creditworthiness of your customers.
~You will be provided with detailed management reports. If, for example, you are financing consumer notes and want to closely monitor your customers payment histories, the funding source can provide you with detailed management reports. This will position you to better run your business and manage your cash flow.
~Concentrate on marketing and business expansion. If you decide to sell your consumer contracts to enhance your cash flow you will soon discover that your business will benefit in more than one way. As a business owner you probably spend more than half your time searching for capital, fending off suppliers, and doing collection work, administration and bookkeeping. By selling your consumer receivables your will position yourself to free up your time to concentrate on sales, marketing , expanding your business and other directly profitable activities. ~No geographical limits. When you decide you wish to sell your consumer receivables, locating a funding source in your city or county is not an issue. You can work with an appropriate funding source anywhere in the United States. Geography is simply not an issue. Likewise your customers' consumer receivables can be purchased from anywhere in the U.S.
~Early detection of customer service problems. If you elect to sell your retail installment contracts, the funding source who purchases those retail installment contracts will keep in touch with the customer relevant to service issues the customer may have. Typically, a client may not likely discover a customer service problem until the contract goes unpaid. At this point, it may be too late to salvage the account and the client very likely will have lost a customer. Funding sources who purchase retail installment contracts make it a high priority to monitor the payments of their accounts. It is a primary component of their business. In this way, the negative scenario of losing otherwise paying customers, because of solvable servicing issues is addressed in a fashion that results in increased profitability.
~Credit Screening and Credit monitoring. When you opt to sell your consumer notes the funding source will provide credit information on new customers for you, which will position you to make more informed credit decisions. Likewise, the funding source will provide continuous credit monitoring of existing customers to make certain there is not significant diminution in their credit status. About the Author:
Dr. Anthony F. Cicone, the vice president of Access Funding Center, Inc. (
http://www.accessfundingcenter.com) 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.
The Benefits of Consumer Receivable Financing Part 2 The Benefits of Consumer Receivable or Contract Financing Part I