FACTORING-DISCOUNTING INVOICES

This is an area that is often coupled with the discounted mortgage business. Again, it is a legitimate business but is not for the little guy.

HOW IT WORKS...

Many businesses allow their good customers to pay later, 30, 60, 90 days, whatever. In some cases the businesses can't wait that long for their money. So they go to a funding company to factor their invoices. Let's say they are owed $100,000 due within the next 60 days but they need the money now to buy a new machine. They go to a factor who offers them $75,000 TODAY for the right to collect $100,000 in 60 days. I'm just using these numbers as an example. I have no idea if they are realistic. The factor must offer less because there is the chance that some of the money won't be collected for any number of reasons.

You as the middle man go to the factoring company and get the same $75,000 quote. You then go to the business that wants to sell the invoices and say I've found a company that will pay you $70,000 for your invoices. If they agree to that, you have made $5,000 just like the discounted mortgage example.

As I said this is a legitimate business. Deals like this happen all the time and that is precisely why you being successful at it is a long shot. I'd bet that the people who buy these programs and do make money right away had some special circumstances to begin with. That is, daddy owns a manufacturing business and always factors his invoices or something like that. SAVE YOUR MONEY.