Factoring
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- Опубликовано: 27 июл 2009
- Many small businesses get the cash they need to operate and expand from so-called factors. One of the biggest factors in the business is CIT, and with CIT on the ropes, small businesses are worried. Paddy Hirsch explains what factoring is, and how it works. #MarketplaceAPM #EconomicExplainers #SmallBusiness
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Brilliantly explained. Was looking for an explanation on factoring, and found the perfect video.
at the end of this video . i couldn't resist myself from subscribing to your channel.
this was fairly a decent simplified explanation. even a common person who is not familiar with this economic stuff could understand.
thanks and nice work
Simple and straightforward explanation. thanks!
It just sucks that when businesses uses factoring, it cuts into their profits. It seems to me that its like a check cashing place for businesses. Well done on the vid!!
After going thru so many videos..you finally resolved my issues on this topic..thx Super video..Best way to make things easier..and understanding.
Thank you so much!!! I am taking a intro to Business class and one of our assignments involves the concept of factoring. BLANK! The book does not provide nearly enough information about factoring. Thank you for taking the time to put this together.
I'm from Brazil, and understand what factoring is better with your explanation in English, that the explanations of the video here in Brazil. Thank you.
I would clarify one thing... In this relationship, it is not every month that the factor gives money, it is a percentage of every invoice. I think it is important to understand that fact.
Do factoring companies buy individual invoices from a company?
you're a god's given gift in teaching,hats off to you..........
Great video! Actually understood it :) thank you!
Thank you..... Easy to understand
Explained clearly.
Thank you
Thanks for the clarification on factoring!
Very comprehensive explanation. Thanks from Spain (Barcelona)
Now I get it!!!!!!!!!! Great job explaining the relationship!!!
Excellent , thank you.
Thank you, very well explained :)
Thanks :) Helped a lot.
A very good class. Thanks!
Just AWESOME sir ✌️👌👌
the best explanation!
thank you beautifully explained .
u r awsum....sir..!!
nice and simple explanation, I subscribed right away to your channel! thanks
Thank you!!!
Thank you so much it is so much clear. But can you explain in other video what is reverse factoring and how its different than factoring
I love your videos! I now have a whiteboard in my living room for my stock trading and it helps me,thanks! I also appreciate that your smart,I live in Las Vegas and I don't interact with many smart people here,thank god for the internet or I would starve!
tysm
thank u so much is this valuable
Good Explanation.
Good One ...!!!
thank you :)
Excellent video
amazing mate
Well, can you talk about invoice discounting.
cheers
It's a nice video, but it's not quite right... He forgot all about interest rates and provision... It has to be said that factor keeps a reserve in amount of 20% of the invoice, and after Nordstroms pays on time and in full, interest and provision is deducted from that reserve, and the rest goes to SB..
I am often in need of a factoring company that can factor Medical receivables. Very few factoring companies factor a Dentist's receivables or receivables that a practice is waiting on to get paid from an insurance company because the insurance companies pay significantly lower than the invoice.
nice sir
Good explanation. But does it really matter after couple of initial months? When you keep buying materials and sell products your cash outflows will balance with cash inflows.
It is very good idea and will be successful
What's the difference between a factor and a loan shark?
You legend
Good explanation!
Thanks Sriram!
Nice
I have a feeling by the end of this video I'll be very badly needing a drink.
How could you please explain me in more easy way. Thanks for this video.
Thank you so much British Robert De niro
How is the relationship between parties effected if say 1/4 of the shoes delivered are rejected by Nordstroms for defects (real or imagined)? Who sucks this up?
This video is not quite accurate since Small Business (SB) still assumes the risk. Here is how it works. SB assigns invoice to factor. Factor advances a % of invoice to SB, usually 70 to 80%. Amount with-held is called reserve. If Nordstroms fails to pay the invoice on time (usually 90 days) factor will close out the invoice by applying SB's reserve funds towards the unpaid invoice. If the invoice is paid on time factor returns the reserve balance to sb less factoring fees, usually 4%-6%.
So the long and short is that CIT and many other colosles should have have been split up for purposes of fire breaks a long time ago.
Now we have a domino chain of monoliths.
I didnt hear anything about the risk of Ed when Sam takes a monthly cash advance but doesnt supply Nordstrom with the monthly 20 pairs of shoes. Seems like Ed takes the most risk while Nordstrom takes the least.
i still dont understand how factoring is a means of obtaining a greater cash flow
i need a drink now
I'm confused. So rather than getting 4000 back from Nordstroms, he gets 3500 back from Ed which is 500 less? How is that better? Why isn't Ed as much as a risk as Nordstroms? How can the shoemaker guarantee he gets any money back from either of these two?
You say Sam needs money to expand, but he will get 500$ less each month in the deal with Ed. That doesnt make any sense. If Sam need a stady income it should work out fine. But he wont get more money to expand in this way. or am I wrong?
you speak very fast ..... so with subtitle would be better ...
Who else came here for math -_-
why don't sam just collect his own money then he will be better off this is not good business for sam he has been going for a long time with 4,000 now he is only getting 3,500 so he has no chance of expanding cause he needs MORE money now he is getting less does the maker of this video work for a factoring company
where do you get 10 to 15% of 4000 is 100 its more like 4 to 500
i think its more to do with it being a small self run business. especially a start up or young company without a lot of capital built up over time. his expenses are up front, (leather for shoes, manufacturing, labour, shipping etc) and the pay out might take 2 months. as soon as he sells his 200 pairs, he needs to start the other 200 for the next month, which is why he needs the money fast
Many company pay invoices 30 to 90 days out (general practice). Small businesses sale accounts receivables to get operating capital before the 30 day period. This is better for the small business owner who cant wait for customers to pay within 30 - 90 days, or don't want to alienate customers by hounding them to pay their bills.
thank u so much is this valuable
nice sir