When businesses need to smooth out uneven revenue cycles, boost cash flow, or get fast access to capital without taking on debt, factoring is the go-to solution. However, like with all financing products, the factoring industry casts a wide net, and not all factoring solutions are the same. Finding the right factoring solutions for your business has as much to do with your capital needs as it does the specifics of the factor you are using. Businesses should be looking for the following qualities if they want to find the best factoring services.
Look at factoring limits
Some factoring companies have minimum requirements for their clients. Factoring solutions for large companies typically require a base invoice amount to qualify for services. Ideally, you should look for factoring services that have low or no minimum, and no upper limits.
Is there a contract?
Many businesses enter agreements with factoring companies because they need fast access to capital to get over a rough financial patch only to find out they need to enter a long-term contract. The right factor will work with you to understand your needs and create a customized solution. Additionally, it is best to work with a factor that does not require contracts.
Are you in control of your invoices?
Many factoring services boast that they will help automate your cash flow. While this is true, some factoring companies automate any and all invoices once the agreement is signed. Businesses should look for factoring solutions that put entrepreneurs in control of which invoices, or even which parts of invoices get factored.
How soon can you access funds?
The timeframe on when businesses can access funds also varies from factor to factor. Some make funds available after 48 hours. Some can take a week or more. The business world is moving faster every year, which means companies need fast access to cash from their factored invoices. The ideal turnaround time for businesses should be within 24 hours in order to boost cash flow and build up capital reserves.
New Century Financial is a national leader in factoring services. We convert unpaid receivables to cash within 24 hours with no long-term contracts or minimums, and we let our clients choose which invoices or parts of invoices get factored. So comprehensive factoring solutions, contact the team at New Century Financial today.