Factoring is an ideal way for businesses to boost capital via their accounts receivables. The factor will advance a major portion (up to 90%) of the invoice value, allowing you to get instant access to funds so you can more effectively run and grow your company. Before you choose an accounts receivable financing company or factoring company, here are some do’s and don’t’s to follow:
Research factoring companies. No two companies are the same, so take the time to determine which business will best address your needs.
Check out customer reviews. There is no better way to assess a company’s success than by staying on top of client reviews.
Review all terms and conditions. Prior to signing up for an accounts receivable financing program, make sure you know and understand the terms and conditions of the proposal. Read through them and clarify anything you don’t get.
Settle for a sub-par factor. Ultimately, making the best of your accounts receivables process will involve selecting the most reputable factoring company. Don’t choose a less-than-credible business just to get the process done quickly. Do your homework, read reviews, and ask questions before you make that all-important decision.
Choose the cheapest rate. Sure, it’s critical to be cost-efficient, especially in today’s business climate. However, this doesn’t mean you should snatch up the company with the cheapest rock bottom price. That low price could equal a disreputable company. After all, there must be a reason they’re so cheap! Consider all other factors before making a decision on price.
Sign up for something you don’t fully understand. Before you choose to factor your accounts receivables financing, make sure you understand the program that you wish to sign up for. Ask questions of the company before you sign on the dotted line.