You have worked hard to make your business a success. You realize that your clients expect top notch service and you strive to achieve such everyday. You’re now looking for a financing partner that can assist you to take your business to that next level and decide that Factoring is right for you. Just like everything in the service industry, different providers provide different service levels and the same holds true for Factoring companies. So it is important to understand what each Factoring company offers when looking for a partner to achieve your business goals.
Flexibility in collections, interacting with your clients on your standards or better
While generally all Factoring companies allow businesses to generate invoices upon completion of service, not all allow the flexibility in collecting. Some Factoring companies actually mandate that they control the entire process of generating and collecting invoices. All factoring companies will require that funds received on invoices that they have Factored are paid to a segregated account that is under the Factoring companies control (known as a lockbox account), but not all require that they actually do the collections and contact your clients for payment. This is very important as many businesses have been built and are maintained by that personal interaction that many clients expect. They are your clients and you have worked hard to build trust and a strong relationship. If you allow the Factoring company to perform collections for you (which can be a good idea to reduce cost and overhead expense by outsourcing the process to them) you better be sure that how they interact with your clients is up to your standards as the business owner and that they are treating your clients like you would if not better.
Flexibility in rates and interests, to help you reduce your expenses
The other important service aspect to think about when choosing a Factoring company, is flexibility. Factoring companies make money by financing your receivables so the more you Factor, the more they make. Interest rates are on the short term of the interest curve and generally get higher as the age of the receivable increases. Many factoring companies do not allow you to pay down your oldest items to reduce your interest expense. It is important to have this flexibility to reduce your expenses. Most factoring companies will approve one of your clients and mandate that all invoices for that client are financed/factored. But what if one months you do not wish to finance an invoice for that client? We are partnered with the most flexible Factoring companies in the USA.
At Alexander Financial Solutions, we have a multitude of Factoring Companies that we partner with to ensure that your service needs are met. We work with you to understand your business, your service needs and most importantly the levels of service your clients expect. Why not call us today for a FREE consultation.