Thursday, 7 November 2013

Seeking New Avenues for your Funding Needs

As a business owner, you may find that getting a conventional bank loan isn’t easy. You may have a start-up business that requires a good amount of working capital to meet payroll and tax obligations, avail supplier discounts, upgrade technology, or provide generous payment terms to your customers. Small and medium sized businesses struggle to keep up with the working capital funding needed due to today’s indifferent lending markets. Though the scarcity of funds is a thing of the past, now businesses can take up alternate funding called factoring. Your local accounts receivable factoring companies can provide you with immediate cash to fulfill all your short term business obligations.
So, how will you choose the right factoring company for your business? A common determining factor while taking up such services is a low discount fee. Ideally it should not be the only major criteria, and other key attributes should also be considered. Other factors such as the company’s reputation, professional services, whether they are a principle fund provider or work as a third party application processor should be considered. One should also take into consideration turnaround time and which industries the factoring company provides services to etc.; these are all characteristics of a reliable factoring company. Furthermore, a reputed factoring company is keen to build long term business relations rather than providing just a one-time service.

Also, as a business owner, you may feel concerned about your customers’ reaction to the factoring process. Reputed accounts receivable factoring companies consider this important and request acknowledgement from their customers on the accuracy of invoices and their consent to pay the factoring firm directly. This process is known as notification or assignment. This notification further explains your decision to utilize factoring services to improve your business’ cash reserve so that you can serve your customers better.
During the entire factoring process, an executive will help you understand the end-to-end procedure and provide detailed information. Also, the factoring company should be knowledgeable about the relevant industry. For example, while funding a staffing and recruiting firm, a factoring company should be well versed with HR regulations, payroll requirements, relevant payroll software etc. Professional services like these provide assurance about the factoring company’s reliability and efficiency to manage any cash flow issues businesses may face.

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