When you are ready to expand your business or need help resolving cash flow issues, invoice factoring may be your best option. Upon deciding to use invoice factoring, the next crucial element is determining which company will work best for your business. The factoring company you choose will impact the entire experience you have with the service, from the application process to customer support. Here are some tips on how to choose the right factoring company.
Experience in Your Industry
Experience matters. Any investment you make in a factoring company should come along with a solid understanding of how your particular field of business functions. The factoring company will handle the collection of the invoices. That means your customers will see this company as an extension of you. If the factoring company doesn’t understand the nuances of your industry, it will be difficult for them to represent you properly. Choose a factoring company with longevity and a history of reliable services across different industries.
Transparent and Competitive Fees and Rates
Include invoice factoring in your budget so that you’re not caught off guard by the challenge of increased expenses to your business. Research all fees to ensure you receive the most competitive fees preserving the profit margin of your business. You should also understand all the contract terms and be comfortable with them.
Flexibility and Terms
Decide how you want to handle invoice factoring. Confirm that the company you are considering has terms you agree with and is flexible enough to meet your needs. For example, do they offer “spot factoring” on particular invoices, which allows you to choose which invoices you want the factoring company to advance, or do they require you to submit all invoices from particular customers, also known as “whole ledge” factoring? Depending on your business needs, the answers to these questions may affect your choice of company.
Choosing a factoring company can also come down to who you feel is a best fit for your business needs. You should rest assured that the invoice factoring company that you choose will provide confidentiality and treat your customers as you would.
Invoice factoring can be the best way to keep money flowing into your business and take the job of collecting off your shoulders. If you have questions about choosing the right company, call our experts at Bay View Funding. We have offered fast invoice factoring since 1985 for a wide variety of industries. We’ll be happy to go over our rates, fees, terms, and policies with you.