“When you’re thirsty, it’s too late to start digging a well.” This is also true for building a relationship with an Austin factoring company. By starting your search for the right invoice factoring company before you have a desperate need, will allow you to make a thorough investigation and chose the factor that works best for you.
Find a Factor that knows your industry
Your first question should be to find out how much experience the factor has working with companies like yours. Every industry has unique risks and rewards. Some factors prefer to only factor in one industry. Others will not work with start ups nor if the client only has one customer. If the factor you’re talking to does not handle companies like yours ask if they know a good factoring company that they can refer you to.
Are you a good fit?
Many factoring companies are now owned and managed by banks. This makes their underwriting requirements very restrictive. Bank owned factoring companies can focus on the business owner’s personal credit score, which is often damaged by the demands of starting a business. Also, bank owned factors will put a factoring limit on each client, regardless of a client’s growth potential.
Get to know your Factor
Once you’ve decided on a factor, get to know them. What are their typical advance rates and factoring fees? Some factors make it a point of not disclosing all their fees, so detailed questions are necessary. Find out if and when the factoring company will be contacting your customers. Do they make collection calls? Are they courteous and polite or are they demanding? Will you have 24/7 online access to your account? How often is excess reserve released? The more you discover about your factoring company in the beginning is crucial to having a successful factoring relationship.
Why now?
Even though many economists are predicting a recession later this year, now is the time chose the correct factoring company. Having the right factoring company on your team will make sure your company has cash flow, even during the most challenging economies.
Go with a Top Rated Factoring Company
American Receivable has a 5 star Google review and is Top Rated for the last 11 years. Our streamlined application requires less paperwork and results in faster funding. Founded and managed by entrepreneurs, American Receivable understands what it takes to be a great factoring partner. Call today or complete our quick online application form.
dakota@americanreceivable.com 512-339-5112
