Are you looking to factor your outstanding invoices?
Making this decision can help your business grow larger than ever before—but which factoring company do you choose to help you accomplish this?
Choosing the right invoice factoring company can take hours of research. Rather than spending precious time looking into company after company, we have compiled some tips to make your hunt for the perfect invoice factoring company easier than ever.
1. Understand the Factoring Company’s Terms
Before partnering with an invoice factoring company, be sure that you know and understand their terms.
Does the factoring company charge for credit checks?
Are there any hidden fees in the application process? These are valid questions to ask before partnering with any factoring company.
Many invoice factoring companies, like ours, offer complimentary credit checks and zero initial costs to ensure that your business is getting the best financial service for the best value.
With credit check costs and application fees, your business could be placed in a compromising position that can hinder potential growth. Be sure that you fully understand what the factoring company will expect from you in your partnership before you’re stuck in a bind.
2. Does the Factoring Company Offer Non-Recourse Factoring?
Non-recourse invoice factoring is a great financial service for businesses of all sizes and in all industries.
Most factoring companies only offer traditional recourse invoice factoring. With this financial service, your business will be liable for the repayment of the amount advanced from your invoices if your clients fail to make payment to the factoring company. This can result in a major loss of capital for your business.
With non-recourse invoice factoring, your business will not be liable for repayment on the amount advanced—the factoring company will eat those charges. This is high-risk for the factoring company, but provides your business with risk-free, fast financing.
3. Ensure that the Factoring Company Has Experience Factoring in Your Industry
No matter what industry you operate in, you want to be sure that the invoice factoring company has factored for businesses like yours before. Take some time to research the factoring company’s history to ensure that they have factored with businesses in your industry.
Factoring invoices for oil and gas businesses differs greatly from those of manufacturing companies. By choosing a factoring company that understands how businesses in your industry operate, you’ll be able to get the most out of your factoring services.
4. Look into Additional Services the Factoring Company Might Offer
You never know what type of financing that you might need in the future. With invoice factoring, you will be able to get instant access to the funds owed to your business, allowing you to grow larger than ever before. There might come a time when you may need to take on larger financing to make the push into another sector.
If the invoice factoring company offers additional services, such as business loans, this can be very beneficial for your business. You have developed a relationship with the factoring company making it easier for you to get the funds you need in the timeframe you need them in.