Especially when applying for invoice factoring!
From childhood we are taught to be honest. But when it comes to filing out an application for financing business owners seem to forget that important early lesson.
After submitting a factoring application, the accounts receivable financing companies’ job is to make sure your business is a good fit for them, and the factor is a good fit for you! With incomplete information or inaccurate information, the chances for serious problems starts growing quickly. If you’re not sure about any questions, call the factor and ask for an explanation. It’s best to get low credit scores, bankruptcy or other details out in the open immediately.
First Impressions Count
It’s very important to carefully answer each question truthfully. With access to computerized databases almost every question asked on the application will be verified at least once if not twice. Some of these questions are simply a test of the business owner’s honesty. Most invoice factoring companies will work with a business owner whose had a bankruptcy, but so many applicants “forget” to check the box asking if they had ever filed for bankruptcy! This does not make a good first impression! And neglecting to report your MCA loans can be an automatic rejection.
It’s counterproductive, and fraudulent, for a business owner to submit financial statements that are false. The business owner might think they can obtain a lower rate by inflating their figures. But just like in dating relationships – the business owner wants a factoring company that wants them- just as they are!
Remember, the factor is most focused on the credit strength of your customers, not your credit score. By being honest and upfront, the factor can process your application quickly and get you the money you need to keep growing your company!