Selecting the right factoring company for your business can seem overwhelming, but it doesn’t need to be that way. In fact, the process is quite simple.
When we were young, wise adults taught us (if we were lucky) about “wants” and “needs” when choosing how to handle our money. “Needs,” we learned, took priority over “wants.”
Once you can take care of your list of needs, the wants become pure gravy. Over-the-top goodness.
What invoice factoring is
Remember, invoice factoring is the process of selling a particular asset, in this case your accounts receivable, to an outside “factoring company” for slightly less than what it’s worth in exchange for cash right away. Traditional invoicing to customers can be a lengthy process, but when you use a factoring company, you can get cash for your accounts receivable in 10 days or less. Often in as little as 24 hours!
So let’s get started …
Make your list
Every business is unique. No one knows your business better than you do. Sit down for a moment and write out what your company needs. Then, add what you would like to have on top of that.
Does your company need:
- Fast access to cash to meet payroll?
- Funds for expanding your business?
- Help collecting bills from customers?
- Help with managing cash flow overall?
Additional items to consider:
- How much funding does your company need?
- Does the factoring company offer a competitive, low rate?
- How experienced is the financial team at the factoring company?
- Are services also offered in other languages, for example Spanish?
What other services might you want? Jot them down.
Contact and Interview
When you contact the factoring company, share your list with a factoring consultant. Ask your questions and evaluate the responses.
Communication should be clear. Financial terms should be spelled out in a language you understand.
Ask about the factoring company’s track record.
- How many years of experience does it have?
- Who will manage your account? Do they speak your language? Can you contact them easily?
- How will your customers be treated? How will their concerns be addressed?
- How long does a business typically stay with the factoring company?
A good factoring company cares about the success of your business as much as you do. It wants to work with you as a valued customer. The account manager should answer your questions with ease and provide helpful information. Including material on how you can leverage the factoring company’s administrative services – and reduce the workload in your office!
And who doesn't want that?
While conducting your due diligence, you may have additional questions. At Bay View Funding, we’ve helped businesses just like yours to understand invoice factoring as a useful tool for success, since 1985.
Our veteran team of factoring professionals is standing by to help you get the answers you need. Contact us here or call (888) 299-9993.