Credit is Crucial

Applying for small business creditCredit is Crucial

Credit-worthy customers are crucial to any business.  As a business owner, it is important to limit your own credit risk, practice due diligence regarding your customer’s creditworthiness, and refrain from extending credit that is beyond profit margins.

Customers at risk for not paying your invoices put your business at risk.  Confirming the credit-worthiness of your customers before you enter into a business relationship should be a routine business practice and there are a good number of companies that can provide credit services.   

Business owner’s need to be diligent and also need to be careful not to overextend credit even to the most credit-worthy customers.  Never extend credit to an amount your business cannot afford to lose in the event they do not pay.  Businesses with the best credit ratings are still at risk for unexpected events which may change their ability to pay.

Credit Insurance companies provide insurance that protects businesses from non-payment of debt from commercial accounts.  Assuring that the business will get paid gives the business owner the ability to manage risks and better accounts receivable management and cash flow.   The credit companies look at your credit-worthy customers and set limits for the amount they will cover for non-payment. Accounts receivable comprises about 40% of a company’s assets which is a major component for a successful business. There are a number of companies providing this type of insurance for business owners. As your business grows, this may be an important business investment to assure success.

American Receivable recognizes the importance of credit-worthy customers for our clients.  We assume the task of running credit checks on your customers to ensure that your invoices will get paid and lower your risk of loss to ensure a positive cash flow. We work with each client to find a factoring solution specific to their immediate and ongoing needs.

Can factoring help your small business?  Give us a call at 972-404-4726 or get a quick quote to find out.

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We sincerely appreciate our trusted partners for these referrals: Specialty Rigging Company needs factoring to expand into a new market.  $150k a month. Oilfield Trucking