In many business situations, getting access to funding you need by using your invoices or receivables is a good idea. But there are two essential factors to consider. The first and most important is this: Why do you need money at this specific time in your business operation? For example, a new business generally hesitates to add credit risk or take the chance of becoming overextended in the early days. If, as a new business, you decide to use this type of financing, make sure that you work with a company bringing plenty of experience to the task.
A successful company with a strong credit record and solid accounts receivable will find this a good option in many situations. Consider the opportunity of capturing a large contract that will be part of healthy growth. This would be a situation in which you should consider having access to cash flow with your invoices as collateral.
In addition to having a solid reason for obtaining funds, you should also make sure that you’re working with a dependable provider that offers good credit terms and has a strong reputation. It’s also important to begin this process with the idea that it’s not the best long-term solution to your financing needs. With that in mind, you can certainly look at invoice factoring as a viable option.
The next question is to whom do you turn for this funding? Start by looking for a financing source that specialises in helping small businesses. In many cases, these smaller companies have difficulty getting quick and efficient funding at crucial times. When you find such a provider, you’ll be working with someone who can make the process as simple as possible and will focus on your invoices exclusively. You might also work with these specialists if you need funds quickly. Just have the necessary information available and you could get funding in 48 hours.
Professional and Personal
It’s also important for small businesses to have personal service so the owner feels comfortable in a lending situation. With financing of this type, you’re not borrowing from a bank so you will not be just an account or loan number. You’ll also find flexible terms when you work closely with a factoring firm that focuses on your individual needs. Yet, you will always feel that you’ve “partnered” with professionals who have helped many other valued clients through the years.
Of course, it’s always important to get competitive rates when obtaining financing. With one of the leaders in the factoring field, you won’t be subject to any unpleasant surprises with rates or terms. You’ll pay a basic interest rate and one administration fee based on the value of your invoices. This is your only cost if invoices are paid within 90 days.