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4 Questions You Should Ask Your Invoice Factoring Company

business people at the meetingToday, there are more invoice factoring companies than ever before that it can be hard to choose just one to work with. When you’re in a bind for cash, it is hard to think clearly about which company is best for your needs.

Ask Your Invoice Factoring Company These 4 Questions

Rather than rushing through the process to get paid fast, consider asking the invoice factoring company these 4 questions.

Question #1: Do You Offer Non-Recourse Factoring?

This is one of the most important questions to ask your invoice factoring company. Non-recourse invoice factoring give you, the business, major benefits that you can’t find with any other financial product.

With non-recourse invoice factoring, the invoice factoring company takes on the 100% of the risk of your clients fail or neglect to make payments, which can greatly save your business’s credit.

Not all invoice factoring companies offer this risk free financing service. If you find an invoice factoring company, like us, that is willing to purchase your invoices with non-recourse, take advantage of this. Because this is a greater risk for the invoice factoring company, it might not be something they will offer to you. Be sure that you ask, because it can end up saving your business’s cash flow and its credit.

Question #2: What Makes You Different From Other Invoice Factoring Companies?

To help you narrow down your search immensely, ask the factoring company what they can provide to you that other companies cannot. Some invoice factoring companies, like ours, will be able to offer you benefits, including:

  • Non-recourse invoice factoring
  • Free credit checks
  • Online account access
  • Vendor assurance
  • Credit assurance, and more

The invoice factoring company will most likely assume that you already know what sets them apart, but by asking them directly, you will be able to get a better sense of what they can really provide you.

Question #3: How Long Have You Been Factoring Invoices?

Asking this question will allow you to get a better idea of the invoice factoring services that the company can provide. Companies that have been in the business for many years will have the expertise that you need in order to get paid for your outstanding invoices.

Invoice factoring companies that have been in the business for decades, like ours, may be able to provide you with additional benefits because they are more established than others. For example, our factoring company provides small businesses with vendor assurance, meaning that we leverage our credit to clients in order to allow them to build strong credit with large vendors that may be hesitant to work with them.

This is something that not all factoring companies can offer, but it won’t hurt to ask.

Question #4: Have You Factored Invoices From Other Businesses in My Industry?

This goes hand in hand with the last question. It is important to ask the invoice factoring company if they have experience factoring in your industry. Factoring companies that have a long history of factoring experience in your industry will be able to give you better, faster invoice factoring services.

It is important that the invoice factoring company you choose has experience factoring invoices in your industry to ensure that you are getting the factoring services that you need.

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About the Author:

Robert Bernfeld started in the commercial finance industry in 1974. His early years included positions with Aetna Business Credit and Foothill Group. During the next thirty five years. Mr. Bernfeld established both equipment leasing and accounts receivable factoring companies. He partnered in founding Business Facilitators, Inc. in 1999. Mr Bernfeld graduated from the University of California, Riverside in 1974 and received his Juris Doctorate from Loyola University School of Law in 1977.

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