Payplant

$1M AR Line of Credit for a Large Advertising Firm

payplant — Mon, 21 Oct 2019 15:04:41 +0000

Palo Alto, CA October 21, 2019 – A large ad firm that creates video solutions, content and a suite of products signed with Payplant to finance their working capital needs. Given the size and scope of their business, Payplant was able to approve up to $1M in invoice financing, which will assist with cash flow as the company grows rapidly and scales to bring on new customers. With they Payplant they have the ability to bring on new customers quickly and without having to worry about being able to give their customers the quality and customer service they expect and deserve.

About Payplant

Payplant provides growth financing for entrepreneurs, by entrepreneurs. Its Pay Me Now^TM digital invoice-financing service provides cash to businesses when their customers pay too slowly. Payplant helps businesses with PO and Invoice Financing, Asset Based Lending, Term Loans and Customer Financing products. Payplant works with companies that don’t currently qualify for traditional bank financing, have grown too quickly for their current lender or are at the point in their evolution where an influx of working capital can elevate their business to achieve rapid growth. Payplant delivers fast and reliable funding, at very attractive rates and is completely on demand. For more information, visit www.payplant.com.

Quick Refresher on Typical Business Loan Requirements

payplant — Mon, 12 Aug 2019 15:22:28 +0000

This might be a little basic for some of our readers but it’s a great article to understand the basics of what you will typically need to get organized and think about when you want to apply for a business loan. Here are some basic points of data that a lender will look at and also a quick note about how we handle it here at Payplant.

Credit Score

Many lenders will be able to turn around a small loan or other structure quickly based solely on the credit score of business owner. These loans typically carry small dollar amounts and higher interest rates but they can be great for companies in need of a quick infusion of a small amount of cash. Payplant does not offer this type of loan as we take a holistic view of your company and underwrite the business and it’s ability to earn the money necessary to successfully grow and pay back any monies owed.

Time in Business

Funding debt to a company with little or no history of a product/service and revenue is not the business of most alternative lenders. Capital for a startup can come in many forms but not typically from an online lender. If you are a new company, make sure you have your story together, great projections and a solid plan. Payplant does work with new companies that have purchase orders or invoices.

Debt to income ratio

For a company to be credit worthy with an alternate lender, they do not need to make a profit but they do need to have enough income to cover their debt payments. Be prepared to budget and to show how you will pay back any funds that you borrow. Payplant prefers no other debt but we can work with other lenders and find a way to make it work for your company.

Monthly revenue/cash flow

This is again really important stuff, especially for a seasonal or newer business without a lot of history. You need to be able to prove that your debt payments will be made on time and without impacting your business’ ability to continue to function and grow.

Industry

Many lenders have preferred industries and then also industries that they simply will not work with. Some of the more difficult verticals to find a funding partner in are transportation and construction. There are specialized lenders for these industries but they tend to be more expensive. Payplant will look at any company in any industry.

Collateral

It’s important to understand what type of lender you are dealing with when talking about collateral. Is it a quick loan with no liens and no collateral other than a PG? Or, like Payplant, will they give you the best rate for your business based on underwriting your whole company, finding assets that can be leveraged and borrowed against like POs, Invoices, Inventory, future revenue/invoices, equipment etc? Different types of lenders have their pros and cons based on what type of collateral they are looking for.

About Payplant

Another Amazon Vendor Chooses Payplant for Their Working Capital Needs

payplant — Mon, 29 Jul 2019 14:03:04 +0000

Palo Alto, CA July 29, 2019 – Any seller, even a well-funded startup, needs working capital help when your business really takes off on Amazon. Payplant has years of experience working with Amazon vendors and helping them navigate the issues that long payment terms can create. We know Vendor Central; we know the various processes and procedures that Amazon requires vendors to follow. We are always excited to sign new Amazon customers as we have a better, more flexible working capital option for Amazon vendors, which includes financing for their businesses outside of Amazon.

Our new client is a bike company making big strides in building safe and affordable bikes for kids and teens. “Payplant was able to quickly approve and finance Amazon vendors because of our in-depth experience on the platform, with numerous vendors in many different verticals” says Payplant CEO Neerav Berry.

About Payplant

Cost Cutting Tips for Online Retailers

payplant — Fri, 18 Jan 2019 15:50:17 +0000

Ecommerce is an exploding business where retailers can build a strong business with the right model. Given the ease of entry into the market, any e-tailer is going to face stiff competition. Here are some ways to help you cut costs and increase your margins.

1. Plan for the long haul when starting out – this means outfitting your sight with the speed and power to grow as your traffic grows. Don’t just pick the cheapest hosting service because in the long run this will cost you business when your page doesn’t load and a potential customer moves on to their next option. Come up with a marketing plan, build a robust site and spend a little more now to get back a lot more later.

2. Free Shipping – if you want to hang with the big dogs in the online retail market you have to figure out your shipping. As we all know, a lot of customers have come to expect free shipping so it’s important to find a logistics solution that works for you because free shipping is not really free; someone has to pay for it. Find a shipping company that has a prepackaged plan for the items you are shipping and try to bake some of the cost into the product without increasing the price so much that you send customers elsewhere.

3. Streamline your checkout system – A customer abandoning their purchase at the point of checkout because of unexpected fees or slow server time is literally like lighting revenue on fire. Make sure you have your fees and costs calculated upfront and again, don’t go cheap on your solution and make the user experience lag that leads them to abandon the purchase. Also, fully understand the costs of whatever payment methods you are accepting and try to steer customers to the method that works best for you.

An online retailer has a lot of competition out there and the lack of barriers to entry make the playing field level for all… Make sure you cut your costs as much as you can so you are in the game for the long haul.

About Payplant

Small Businesses Face Unique Accounting Challenges

payplant — Thu, 10 Jan 2019 17:30:19 +0000

You know the drill, you are a small business owner or C Level exec. As such you wear many, many hats and in any given day you can be the go to for operational issues, staffing and recruiting, team building, account management, business development and yes the often dreaded accounting function! It’s super important to stay on top of your books so that mole hills don’t become mountains. Here are some tips to help you maintain timely and correct financial statements and stay ahead of any issues.

Manage Cash Flow – Many SMBs fail not because of their bottom line but because of the inability to manage cash flow and find funds to keep the business running during lean times. Analyze your bills carefully and make sure to collect on your invoices as quickly as possible.
Unforeseen Expenses – It’s important to plan for a rainy day and have money set aside or access to credit for periods where your revenue is low. Also plan for any potential liabilities and have insurance in place to cover accidents.
Disaster Preparedness – Natural disasters hit small companies the hardest so be sure to plan for any natural disaster that may come your way. Know your region and the type of issues you could face.
Taxes – Preparing for and paying your taxes is essential. Know your business and what you can deduct to lower your tax burden.
Payroll – Managing payroll including your payroll tax is essential. If possible, use a 3^rd party that is an expert in the area to save yourself time and headaches.
Pay your bills – Staying on top of your expenses and making sure your vendors are taken care of is a key indicator of long-term health.
Reconcile your books – This should be a monthly or even weekly project for you so that you can stay ahead of and fix any issues that have popped up. It is imperative to have your numbers correct so you can analyze your business and how you are doing.
Analyze your finances – Piggybacking #7, keep the books up to date and keep your understanding of how your business is doing up to date by constantly looking at and working through the numbers. This will help you understand what is working and what needs improvement.

These are just some of the tips that can help your business be successful and allow you to grow your company by keeping tabs on how you are doing now.

About Payplant

A Healthy End of Year Audit Can Help an SMB Plan for the New Year

payplant — Mon, 07 Jan 2019 21:23:27 +0000

An end of year audit across your business can help you find the successes and the areas in need of improvement for the coming new year. This article lays out the areas that you can go back and take a look at so that you know where your resources are being used wisely and where you might want to take a new approach. This includes the obvious things like where you are making your revenue and what your biggest costs are but also your marketing activity, social media posts, your employees satisfaction, your management team and what goals you hit or missed.

To begin, its important to take a look at your finances. If you turned a profit, what were the main reasons? Where were the successes and could you expand further in this area to dig out more revenue? This can help you to anticipate your customer’s needs and potentially diversify your offerings. If you lost money, which is not uncommon especially for a startup, what costs can you control and what products or services just didn’t sell like you thought they would? It’s important to stick with the winners and potentially divest of the losers.

All SMBs market their product in some way. This may be via the website or simply word of mouth or it could be a large marketing budget with ads and commercials across various mediums. It’s very important to know and understand where each customer came from so you should be keeping tabs on how a customer found you and what it was in your marketing that attracted them. This will allow you to again take stock of what is working and what needs some tweaking.

Social Media posts are a common and potentially large bang for your buck way to create publicity around your company. Taking note of posts that garnered a lot of attention is a great way to come up with ideas for future posts. You should also be paying attention to what your competitors are doing in this regard. The analytics behind a business’ Social Media allow you to measure real engagement and interest on the part of potenatial customers.

Employee satisfaction is a very important metric that can tell you if you are getting the most productivity out of your workforce. Ask your employees what they care about so you know how to motivate them. “How employees feel about their work and work environment is a strong barometer of your business’ well-being and future success.” Unhappy employees can have negative interactions with customers or leave for greener pastures, both of which cost you resources and business.

Part of that employee satisfaction is your management and leadership team. It’s not always easy to be an independent barometer of yourself and those closet to you that are likely carrying out directives from the boss, aka you! Formal leadership training is a key way to improve management and you should set aside time to make sure everyone that has a headcount within your company has these skills, including yourself.

Finally, go back in time 1 year, think about and look at the goals you set for the year. Where did you succeed and where did you fall short? Measure these successes in their degrees and the positive impact they have had on your company’s bottom line and working environment. Were the goals realistic? If not are they realistic to try to repeat this year? Set reasonable goals and come up with concrete and measurable ways to achieve them in the coming year.

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Invoicing Mistakes to Avoid at your SMB

payplant — Tue, 11 Dec 2018 17:37:52 +0000

Invoicing and bookkeeping are an essential piece of the puzzle for any SMB. The work can be tedious and time consuming but it is imperative that you avoid these mistakes so that you can help your company receive payments on time and project a professional and reliable façade. Here are some highlights that we think are very important.

Forgetting to invoice or delaying an invoice – this seems basic but it can happen with the hustle of your busy day. Send the invoice as soon as you can to start the payment clock today.
Not following up on unpaid invoices – have a system in place to ask for updates on when you can expect payment.
Unclear terms – every invoice should contain the terms of the payment agreement, the date of the invoice and a due date. This will allay any possible confusion and take that excuse out of your customers quiver.
Not signing a contract – it’s in the best interest of both parties to have a signed contract so expectations are explicitly agreed on.
Sending invoices to the wrong person or department – make sure you know the process to get paid by your customer and have the correct contact information to send to. Also, ask for a read receipt or ask for a reply confirming the receipt and that the invoice is in good order.
Incorrect or missing details – this can cause confusion or give the customer a reason to delay payment. You should always itemize the goods that were sold or the services performed.
Fee confusion – if the invoice includes other fees, it needs to be very clear what they are. You should also always have a late fee to encourage customers to pay on time. You do not have to enforce the fee but you should have one on the invoice as a point of leverage if it comes to that.
Incentives – some companies offer early pay incentives. We would use these with caution if your margins are tight or you aren’t in a jam with cash flow. It’s always better to be paid in full if you can wait for your normal terms.
Offer different ways to pay – offering your customers the ability to pay with a check, ACH or wire is a good start. Think about accepting credit cards or other electronic means of payment.
Brand your invoices – you should have your company logo on every piece of paper that you send out. This gives your operation a professional look and lends an air of seriousness.
Use your invoice correspondence as a marketing tool – send other promotional material like new product announcements or discounts for future purchases.
Be polite – most customers want to pay their bills. Poor manners gives them a reason to move your invoice to the bottom of the pile. You should have a polite and professional working relationship with your customers.
Lengthy payment terms – if the rest of your industry is net 30 and you are offering net 60, it is going to take a while to get paid and could create a cash crunch for you. This might be a good selling point but should be avoided if possible. You are not a lender.
Know your customers payment cycle – many clients have internal procedures where all payments are made on certain days of the month. Knowing this information will stop you from asking for an update that you already ought to know and it will help you in getting your invoices over to them when you can get paid the fastest.
Understand outside options – have a lender in place that can advance you needed working capital in a pinch when your AR balance is there but the cash isn’t.
Using a paper based system – mailing an invoice and then waiting for a paper check to come back adds up to a week or more to the process. E-invoicing or email is the way to go.

These are just a few points of advice to speed up your cash flow cycle and get you paid as quickly as possible.

About Payplant

Why PO Financing is a Better Option Than a Term Loan

payplant — Fri, 30 Nov 2018 17:26:13 +0000

There are many different ways to finance a business depending on the situation that a company is in. Invoice Financing, PO Financing, Term Loans, Lines of Credit, upfront subscription monetization etc can all be very helpful to get your business growing and to manage your cashflow.

If you have a large order that you need to fill but do not have the capital to do so, chances are high that you are in the market for financing in the form of either credit versus the PO or just a straight term loan. This article lays out some great reasons why PO Financing makes more sense.

The basics of PO Financing; when you receive an order from another company, this represents future revenue for you. A lender is willing to advance you a percentage of that value (typically 50%) so that you can pay your vendors for the items or the parts to manufacture and fill the order. This allows you to become a reliable vendor that can fill orders quickly for your customers without having to wait on other payments to fill the order down the line.

A term loan can be helpful for a growing company but you are typically locked in to a longer amortization period with either larger monthly Principal and Interest payments (P&I) or monthly Interest payments with a balloon payment at the end of the term. In both cases you will need to plan ahead for probably a year or so to make sure that you will have the cash flow to make those payments as they come due or be willing to pay a penalty for an early payoff. If growth plans or other projects fall through this can be a heavy burden.

PO Financing has a set term and a set revenue stream where payments from a specific project are earmarked and there is no long-term obligation. PO financing can be done again and again as you receive more orders with the same set up and benefits. Term loans can be refinanced but again, you may face early payment fees or origination fees that make the cost of the arrangement eat away at a large portion of your margins. Many companies offset the cost of PO financing at least partially by baking in the cost of the funding. This is much easier to do from order to order than across multiple customers and contracts. PO Financing is a more flexible and cost effective way to get the capital you need to finance your business.

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10 Good Questions to Ask Before Signing an Invoice Financing Agreement

payplant — Wed, 14 Nov 2018 15:55:31 +0000

Finding the right lender for your company can be a difficult task but arming yourself with the right questions could turn that new financing arrangement into a beneficial and long-term relationship that really helps your firm grow. Here are 10 questions to make sure you know the answers to before signing an invoice financing agreement:

How many years has the lender been in business?

You want a stable and known company that has been around and structured lots of deals so that you know they can work with you and smooth over any issues.

Is the company a broker or a lender?

Anyone can hang a shingle and say they are a lender while passing your file around to find you a deal. A real lender will have an interest in your company and be able to offer the best rates without upcharges or broker fees.

In simple and plain terms, what are the discount fees and what other fees are charged?

If it takes a major in math to figure out your APR then they are hiding fees.

Do they have experience in your specific industry?

Knowing your industry, the billing cycles and the issue that may pop up is a key to building a successful partnership with a lender.

Can I finance only specific invoices or specific customers or do I have to finance all of my invoices?

This flexibility is really important to your cash flow. If a lender is going to impound all of your revenue in their lockbox and charge you fees or hold back funds, the situation could become more of a hindrance than a beneficial partnership.

Is there a term for the contract or a termination fee?

If you find a better deal or grow out of the terms of the arrangement, you should be able to get out of the contract without owing any money or having to stick around and be held back for a period of time.

Are there monthly minimums?

Many businesses have periods where they are flush with cash and don’t want to pay interest to borrow money they don’t need and they should not have to.

Do they file a UCC and if so, when?

This is a standard clause in many invoice financing arrangements but you should be aware that a UCC is a public record and your new lender should not be filing a lien until they have actually sent you funds.

What is the maximum line of credit and can it be increased?

This speaks to your ability to grow with this lender and have a flexible relationship that serves you, the borrower. If a credit line is fixed and there is no room for growth then you could be handcuffed and find yourself in an inadequate situation in the future.

10. Will they provide references?

All lenders ought to be able to put you in touch with a couple of their current borrowers that can speak to their experience with the lender.

Every new financing relationship should be fruitful and beneficial to your business. Asking the right questions upfront puts in place expectations that all parties can live by going forward.

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Using PO’s to Finance Working Capital

payplant — Wed, 31 Oct 2018 14:57:39 +0000

We found a good article that talks about PO Financing and how a company can patch working capital holes with a cash advance from a lender against a PO. Though the article discusses this type of financing in Canada, the details and merits remain the same for companies here in the US.

By choosing to put in place a PO financing facility you allow your company to take on much larger orders. This is because you can receive 50% of the value of a PO from a lender at the time of execution on the PO. Basically, the lender pays your suppliers or pays for the items from your inventory, which you can then restock. Once the order is shipped to your customer and you generate an invoice, the agreement transforms into an AR financing arrangement, and you receive a further advance (typically another 30% given standard advance rates of 50% for a PO and 80% for an invoice).

PO financing can also increase the efficiency and speed with which you ship and fulfill your orders. Without a facility in place, you may have to piece together the funds for a large order and wait for payments from other customers, which adversely affects your ability to quickly fulfill and ship.

Further, you can offset some of the costs of a PO financing facility by negotiating volume discounts with your suppliers. You can now start buying in bulk so to speak, since you have the financing in place to pay for larger orders. None of this activity affects your relationship with your customer other than improving your time to ship and your ability to fulfill large orders. This will also affect your bottom line because “the cost of paying in full is usually much higher than the cost of borrowing”.
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