Whether it is a business or personal pursuit, whenever it comes time to choose a new company to do business with, it is always a decision that should be made with care. Just as you’d take the time to research hiring a plumber for your home or working with a new supplier, you should take at least as much time to thoroughly vet the invoice factoring company you choose to do business with. After all, this relationship will be key to your businesses success going forward and it is a decision you don’t want to make lightly.
Assess the Factoring Company Credentials and Credit Line
The larger industry of alternative financing companies including accounts receivable factoring has grown significantly in recent years due in part to the flat economy and traditional banks reluctance to provide standard term business loans. While this increase in the number of companies offering factoring receivables services can be a good thing for those seeking cash, it has its draw backs such as a rise in fraud and incompetency.
That’s why you will want to check the background of any factoring companies you are looking to do business with. Ensure they have an extensive line of credit and that they have been in business in the industry for a number of years. You would probably not want to be one of the company’s first factoring accounts receivables customer, and this is true for just about any business.
Ask For & Follow Up with References for Invoice Factoring Services
Any company that is reluctant or delays in providing references or contact information should cause pause. The benefit to you the consumer is with so many choices out there and with the competitive nature of factoring receivables, you can shop around. So DO NOT waste time with a company that isn’t willing to provide you with references.
Expect Superior Professionalism from the Factoring Company
If you are being treated poorly by any company you are looking to do business with, that should speak volumes. Remember the account receivables factoring company is going to be communicating with your clients and if they come off as rude and inconsiderate to you, how do you think they will be with your customers? Again, an overly pushy, impolite or uninformed factoring service should not be tolerated.