A business owner will quickly face information overload when trying to research invoice financing or accounts receivable factoring on the Web. The first thing a business owner must do is sort thru all the paid ads. Many of these ads are not even from funding sources, but from brokers who get paid by placing you with a factoring company. Their incentive is to get a quick brokers commission – not the same as finding a factor that is a good fit for your company and understands your industry.
Break Through the Noise
After the paid advertisers are the QUICK, FAST CASH sites that promise to send you money the same day. They offer quick and easy money but disclose almost nothing when it comes to terms, fees and the other details that go along with any financial transaction. You will get more information on a pharmacy receipt than these websites!
So, what are the details that a business owner needs to know so that can negotiate a good accounts receivable factoring agreement. First, you should not have to sell all your invoices. Factoring companies vary on this policy, but with a little digging you should be able to find invoice financing companies that allow their clients to pick and choose which invoices they factor. Remember, the more flexible the factoring program the better for you the business owner.
Then you need to find out how the factoring company will interact with your customers. Your business depends on maintaining good customer relationships. Some factoring companies can be very aggressive in their customer contacts, finding a factor that is both professional and in the background is critical. The right factoring company will allow you to maintain your customer relationship and reduce your days outstanding of past due invoices.
Finding out the cost, funding rate and other fees sounds obvious. But your funding rate will vary at the QUICK FAST CASH websites depending on their algorithm of the day. Factoring companies will vary their funding rate by industry, so you want to find an invoice financing company that is well established in your industry. Discovering all the fees that a factor charges can be daunting. Better factoring companies are careful to disclose all costs associated with their service. If you’re not getting a proposal that discloses all factoring fees and charges in an easy to understand format, run!
A Client-Centric Mindset
American Receivable Corporation has offered Top Rated invoice financing for 42 years. We take pride in the relationships we establish with each client and help them reach their financial goals. From our simple application to our ¼ page rate sheet we are focused on providing a transparent factoring experience. Call us today at 800-297-6652 or make an appointment to schedule a free consultation with one of our experts.