Using a factoring service is a cost-effective method for improving cash flow that also saves time. However, if you aren't already familiar with the process of factoring, you might not know what to look for in invoice factoring services. Factoring Club provides expert advice to help you choose your future factoring company, but it also helps to understand the features you'll commonly see in the world of factoring.
Examine the Factoring Fees from Start to Finish
Just like a bank or traditional lender, a factoring company will have a variety of fees associated with the services, and it's up to the client to read and understand each of these fees. Factoring fees are just one of the details that you'll use to make a decision on your future factoring service, and not all companies charge the same fees or the same amount for each fee.
For example, some companies will charge a setup fee at the beginning while other factoring businesses may offer free setup and a higher service rate once an invoice factoring agreement is established. Sometimes, it's worth it to pay a setup fee when the fees for service are kept low. In other instances, finding a factoring company that doesn't charge setup fees might offer the most cost-effective solution.
Good factoring companies offer excellent service and provide easy-to-understand information about their fees, and it's important to request a list of fees and the requirements of a service agreement. For example, some factoring companies have monthly minimums you must meet to qualify for service.
Factoring Service Expertise
The new economy created in the wake of the Great Recession has meant the emergence of many companies offering alternatives for funding. While business loans from traditional banks remain solid options, factoring companies have become a popular option for small businesses and entrepreneurs who need to increase cash flow to accommodate growth and opportunity.
One of the most important features of an excellent factoring service is the level of customer service offered by the company. Combined with the experience the factoring company offers with its general services or specialized factoring options, you'll find that the best factoring companies have a reputation for good communication and experience in the industry.
Many general retail companies that use factoring services don't need specialized factoring agreements, but industries like construction, international importers, and healthcare companies may need to find a factoring company with experience with the unique billing arrangements used in those industries.
Factoring Companies vs Traditional Funding
A startup, small business, or company with cash flow problems may need to look at alternative funding options when a traditional bank loan isn't an option. For a small business that has the time to wait for approval from a regular bank, traditional business loans may offer the lowest overall price for funding.
However, the ease of setting up an agreement with a factoring company is often well worth the modest increase in price. Choosing the best factoring company may come down to finding a factor that offers good rates when compared to those offered by traditional lenders, but which offers some advantages over regular loans.
For Example... imagine a company that has the opportunity to make a purchase on essential materials at a reduced rate, but only if the purchase is made within a few days. A traditional loan wouldn't offer approval swiftly enough while a factoring company could offer an answer within a few days.
Shop for a Factoring Company Like Any Service
Factoring Club offers assistance to businesses looking for a new factoring agreement. As with any financial service used by businesses today, it's essential to speak with different providers of that service to gauge average prices and service features. Studying the company's reputation for customer service, as well as the fees charged for services will help your business narrow down the choices it has for using a local factoring company.
Find a Factoring Company in Your Area
After you narrow your selection of factoring companies based on your credit needs, then you can focus on the other factors such as location. With the help of FactoringClub, you can find a factoring company in your home state or city. FactoringClub makes the process very simple and quick. For example, if your business is in Florida, you can quickly view the following searches to find a factoring company in your state or city:
FactoringClub.com is the premier source of information for invoice factoring companies. With factoring companies in most major cities and states, FactoringClub helps you find the right factoring company. Search our listings or call our factoring experts at (866) 748-7111 for assistance.