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If you require quick money for your business but you do not prefer taking a bank loan, why not use factoring, which is also called accounts receivable or invoice financing. Factoring is a financial transaction in which a third party, referred to as a factor, will buy your accounts receivables or invoices. They will advance about 75% to 90% of the the total value of your receivables, and obtain payment for those invoices from your clients. Once they receive a reimbursement for their cash outlay and factoring fee, they will send the balance to you. Simply put, by using the services of a factoring company, you do not have to wait for the customers to pay and you can use the money given to you by the factoring company to handle new orders, contracts, or undertakings.
Factoring providers be different in a number of aspects, from the amount they advance to their clients upfront, to the their service fees. They are also different in their collection strategies. With that in mind, it is advisable to do a comparison of multiple factoring firms before making a decision. The Internet is a very helpful tool to help you find reliable factors. Listed in the following paragraphs are things you should take into account when selecting a factor.

Experience

Just like many services, it is wise to work with factors that have been in business for a long time. You must only work with fledgling factoring companies if you you were given dependable and strong personal recommendation.

Responds quickly

When looking for a factoring company, choose one that is known to immediately respond to client needs. In the factoring field, ideal turnaround for applications is within 24 hours. Substantial cash advance, low factoring fees. To know more about [http://dannycoldon372.skyrock.com/3133397676-What-s-Great-About-Staffing-Factoring.html small business factoring], go to this link.

In order to make sure you remain profitable during factoring transactions, look for companies that will give you nearly ninety percent of the total sum of your invoices as cash advance and ask for not more than 6% of the total invoice value as factoring fee.

Straightforwardness and convenience 

It would be to your benefit if the factor you will use lets you inspect your accounts and payment status 24/7. The best factoring firms also provide systems which allow you to submit invoices easily and perform credit checks on your customers in your stead. Look for factors that have easy application procedures and those that don't insist on long-term contracts.

Collection methods

You need to know how factoring companies will contact your patrons. Some factors collect money in a professional manner, but there are also those who threaten consumers who signed those invoices. Make sure that the factoring company you're going to get will not damage your relationship to your clientele.