Downtown Magazine

Ideas and innovations for business and internet users, focusing on high-tech and social trends.

Tuesday, May 12, 2009

Tight Credit? Try Factoring

People go into business for all kinds of reasons, and many of them get quite an education once they've begun the process, learning everything from employee relations to budgeting to crisis management literally on the fly.

Some become successful entrepreneurs, like the Steve Jobs and Bill Gates of our generation, while others succumb to the overwhelming pressure of being one's own boss and knuckle under, going back into the workforce.

The primary reason for small business failure is almost always either lack of sufficient start-up capital or lack of credit for continuing operations or expansion. In times like these, in which access to credit is key and very difficult to obtain, factoring accounts receivable remains one of the most underused and misunderstood mechanisms for maintaining cash flow and stability during stressful periods.

Smart companies have been employing factoring for many years. Essentially, factoring companies provide up-front capital against verifiable accounts receivable. This is especially effective for samll companies dealing as a supplier or vendor to larger firms, which often dictate terms of payment, usually net-30 or or net-60, causing, unwittingly, the small company to suffer a cash crush.

Factoring relieves the cash flow dilemma by providing financing against already completed, but unpaid, projects, and if used wisely, can save a business from failure or help one expand quicker than competitors.

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Is Now a Good Time to Invest in a Rolex?

With the recent economic downturn and many questions being raised about the efficacy of the stock market, investors and average folks are searching for alternative investments which may offer less volatility, more security and an ability to either appreciate or, at worst, retain value.

That's why many have turned to precious metals, gold, silver and platinum, as stores of wealth, but others are seeking opportunities in rarities, art, jewelry and selected collectibles. While the current rage is to melt jewelry into the base metal - which, in the case of gold is now over $900/ounce - may be a good idea for some jewelry, that is not suggested with a finely crafted high-quality timepiece, like a Rolex from

Luxury timepieces, watches and quality jewelry are prized and admired by everyone, and are an excellent store of value. A $5000 Rolex may not be worth $7000 in a year or two, but it certainly will not be valued at much less than original value, as opposed to stocks or other riskier investments, many of which have lost 50% or more over the past year.

A watch or piece of fine jewelry can also act as a hedge against inflation, much like gold or platinum, as most of these will have a generous component of at least one of the precious metals, and, in the case of watches, more than likely to have some gemstone value as well, in addition to the high degree of beauty and craftsmanship inherent in such items.

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