Factoring companies help accelerate cash flow and enable business growth in every sector. However, not all factoring companies are the same, and their services and policies can vary greatly. If you want to turn your invoices into cash quickly, here are some things to consider when deciding on a factoring company.
1. How Quickly Can You Get Approved By the Factoring Company?
Some factoring companies can take 10 business days to approve clients for factoring services. Others have a lengthy process requiring lots of documentation. New Century Financial has a fast 2-minute application and instant pre-approvals, so you can start factoring your invoices quickly.
2. Are You Contractually Obligated to Factor Your Invoices and for How Long?
Some factoring companies maintain their clients through contracts requiring them to factor in all their invoices for several months. New Century Financial does not use long-term contracts. Whether our clients need to overcome cash flow issues, or for longer to accelerate their cash flow, we are happy to help. Learn more about finding the right factoring company from one of our previous articles.
3. How Few or How Many Invoices Can You Send to Your Factoring Company?
Depending on the factoring company, you may be required to factor in a minimum dollar amount or number of invoices to use their services. At the other end of the scale, some factoring companies have a maximum limit, which can be an issue when businesses want to use factoring services to position themselves for growth. New Century Financial has no minimums, and with up to 10 million dollar credit facilities, so you can factor only what you need when you need it.
4. Are There Added Costs to Using A Factoring Company?
In many cases, factoring companies will charge application fees, credit check fees, new customer fees, and even fees when you stop doing business with them. At New Century Financial, we help businesses retain as much money from their receivables as possible, so we do not charge extraneous fees of any kind. When selecting a business funding solution, there are 5 important things you should consider.
5. Does Your Factoring Company Listen to You?
Many factoring companies approach their relationships with a “set it and forget it” philosophy. Businesses keep submitting invoices, and the factoring company keeps converting them into cash. New Century Financial realizes that businesses grow, goals change, and not all invoices must be factored in completely. They are your receivables, so you should be involved in the process. For these reasons, we let you choose which invoices or parts of invoices get factored, in so we can help you reach your goals with solutions tailored to your business.
To learn more about our factoring services, and the industries we serve, or if you have any other questions, contact New Century Financial today to speak with our team.
There are some important considerations to think about before you choose a factoring company. Find out more by reading our “Entrepreneur’s Guide to Factoring.” You can call us at 866-582-0775 or Apply Now to get started.