Factoring can be the financial engine that drives your company’s growth. Many companies that began factoring a few thousand dollars, now factor millions of dollars. Companies often use factoring to bridge the 30-60-90 days gap between long-hauls and customer payments. But once you try the variety of the services that this industry offers to you, then you will fully understand the potential of factoring. Factoring is debt-free, you are being financed without appearing in the debt book.
Factoring services are potentially made for many companies, next here we are going to list some specific cases why many companies should benefit from this industry;
- If you are a start-up company then you should absolutely take into consideration the possibility to cooperate with a factoring house, which can offer you a long list of services, starting from the analysis of credit rating for potential clients, insuring your account receivable, pre-financing your clients’ invoices amid the discounting invoices process and many others.
- If you are a large company that want to optimize the cash flow and at the same time benefit from stretching payments terms related to your clients, then you should absolutely consider the opportunity to collaborate with a Factor that will strongly help you in this goal. Doing this, at the same time, you are going to help your suppliers, whom will have more liquidity at their disposal and probably will be much more motivated to perform.
- If you are a company with a high rate of sales’ growth and you really don’t want to miss the opportunity to grow further, then you should look to factoring as a huge advantage on your hand, respect to other business which are skeptic about this industry and don’t fully understand its potential. If you negotiate to discount a considerable volume you can really obtain much favorable rates of discount and lower commissions. Amid this process you will strongly boost your business with a low cost of operating.
- If you are a company that have problems with the clients’ payments because of your low capability of selecting the right clients and avoiding the bad ones, maybe it’s time to look closer to the factoring industry. Operating under the supervision of an experienced factoring house you will be able to totally outsource the process of clients’ creditworthiness ranking. Doing this you essentially focus at the heart of the business and you don’t have to worry about clients’ payments. Additionally, using the Credit Insurance service you can be sure a hundred percent about the future payments.
- If your company’s problem is the low turnover rate of the working capital, we strongly recommend you to take into serious consideration the possibility of the discounting invoice service that the factoring industry offers to you. You effectively should know that this indicator is a key element for the success of your business over the long term. The possibility you have to optimize this indicator through the factoring services is something you should never underestimate.
In general many companies could benefit from factoring, specifically in situations similar to the ones we explained over here. The factoring industry has come a long way over the history and for sure is going to stay around for much longer. It’s up to the company’s management diligence to understand the full potential of the services that this industry offers and to take advantage from it, minimizing the cost of doing business, preserving the value of your business’ relationships and proceeding faster to the company’s target.