With today’s interconnected business networks and online review systems, finding a potential financial institution to partner with your company has never been easier. It has also never been more necessary to sift through your choices with care to find a group with the right services and the right people to help your company succeed and grow.
Business owners who need a dependable source of working capital but don’t qualify for traditional lending sources or don’t want to incur debt often choose to work with a financial partner that factors invoices. If you are ready to get paid fast on your invoices without having to wait for weeks and months to get paid, you’re ready to shop for the right factoring company for your needs. These tips can help you start your search.
Here are five tips for finding the right factoring company
Ask colleagues in your industry.
Make a few calls and ask friends if they use a factoring company. If so, find out more about their experiences and ask for recommendations and specific names and phone numbers for the company they use. It’s okay to drop their name when you call their recommendations – they may receive a referral bonus if you decide to factor with the company that they use.
Ask your vendors and customers.
You may be surprised how many businesses that you work with every day are well-versed in invoice factoring and have experiences to share about different factoring companies. The popularity of factoring has spread far and wide in the last 20 years. Find out who they trust and like among the various factoring companies they discuss.
Use search terms such as “factoring company guide” to launch your search. Check out review sites that feature comments and rankings from verified customers of the invoice companies. Visit the websites of a few factoring companies. You can gauge a factoring company’s level of professionalism and experience by browsing through their online materials. Focus your attention on companies that have been in business for many years: that’s a sign of stability and expertise.
Unlike banks which follow strict state and federal regulations in all financial matters, factoring companies are not required to meet any ethical standards or operating requirements. Fortunately nearly all factoring companies are reputable. However, to be sure that you are partnering with a trustworthy factoring company, make sure that it is a member of the International Factoring Association, the industry’s largest professional association. Fewer than 450 factoring companies around the world have been accepted into this nonprofit organization and each must adhere to the IFA Code of Ethics specifying high standards of professionalism, competence, and honesty. Also avoid any factoring company that has not received an A+ accreditation with the Better Business Bureau.
Trust your intuition.
After you’ve narrowed down your search, call and speak with a factoring professional at each of your finalists. Remember that unlike visiting your local bank and having coffee with a loan officer, your relationship with a factoring company is much, much more likely to be over the phone and via email. See which companies inspire your confidence and demonstrate the desire to help you grow your business and increase your profitability.
Following these tips can get you on the road to improved cash flow and financial peace of mind – without borrowing a dime. Interstate Capital, a respected and well-funded leader in the industry since 1993 and a long-time International Factoring Association member, has helped more than 10,000 small and medium-sized companies with fast application approval and same-day funding on their invoices. Click here to learn more and receive an instant factoring rate proposal.