My mother always told me the way to keep friends is to never borrow from or lend money to your friends. There are bankers and expert lenders for lending money; let them do their job. “Your job is to be a friend, sing and laugh with them.” she would end with. It was really good advice.
Money always gets in the way of a friendship. One of those friends inevitably forgets how much the amount is that was borrowed or what the terms are or the person stretches the payments a little too long. This creates tension in the relationship and no matter how much you may like each other this situation becomes hard to forget, and sometimes hard to forgive.
The same could be said to a business owner then. But, why is it a common practice to lend money to perfect strangers every day? Businesses do just this by offering mini loans in the form of 30 and 60 day terms to other businesses! Why is this common practice? A business is in business to sell its wares or services, not to be a banker or lender. But we have been taught that this is the way a good business operates.
I am telling you there is a better way. Let the Lender be the expert at the lending, and separate the loans, so the business can get back to business of doing the thing it loves. Making money and selling.
Today a business can outsource this to a Factor, and the factor has experience with receivables management. The way factoring works is a business first asks the factor if the customer is a good credit risk. If yes, then the business sells to that customer, and turns the invoice over to the factor and gets paid in 24 hours from the factor. No more waiting to get paid. No more stress. No more banker. The factor then collects the payments on the invoices in time, and acts as a receivable management department on behalf of the business. The cycle starts all over again, and the business has unlimited potential because it is not restricted by the amount of money it is waiting for. The business has the money now to grow and prosper.
Today we outsource everything, so why not our debt. There is a better way to business, and if you want to take my mother’s advice, it can work for businesses too.
By Robinn Mikalic, Daughter of Veronica