Top 5 Reasons to Factor with Confidence
Many think of “invoice factoring” as a scary term. The question most commonly asked is “What will my customers think?” Understandably, you don’t want others to think you are in financial ruin.
Factoring is actually a quality financial tool. Business owners don’t hide the fact they obtained a business loan. So why feel the need to be secretive about increasing your own cash flow by means of invoice financing?
Here are the top five reasons to feel at peace about what your customers might think when considering factoring as a financial option for your business:
- If your company qualifies for factoring, it simply means your business is in a position to secure outside financing in order to expand and grow.
- Factoring invoices promotes operational longevity. This gives you the opportunity to purchase additional inventory, maintain payroll schedules, and earn vendor discounts.
- Factoring invoices involves a verification process for a specific invoice amount. This procedure makes sure the product or service was received and the customer’s needs were met.
- Invoice factoring creates capital on invoices already billed. You’re not borrowing money (like a bank loan) that you haven’t earned yet.
- When you inform your customers you are partnering with a firm to handle your accounts receivable, the customer may already be familiar with factoring and treat it as normal course of business.