Factoring companies are an important part of the financial sector. They are companies that focus on financing entrepreneurs by taking over outstanding invoices. This way, a business owner can have cash flow quickly and does not have to wait for their customers’ payment terms. As there are many different factoring companies, it can be difficult to decide which one suits your business best.
Costs
An important factor to compare is the cost of factoring. This is determined by the fee the factoring company charges for financing and the risk they take on when taking over the invoices. So always compare the fees and also look carefully at the small print. For example, there may be extra charges for certain services or conditions attached to the financing.
Conditions
Apart from the fees, there are other conditions you need to look out for. For example, the factoring company may require a minimum turnover or place restrictions on the industry you are in. The payment terms they apply may also differ. So compare carefully which conditions are most favourable for your company. So the lowest price is not always favourable depending on the conditions.
Service
Another factor that is important to compare is the service of the factoring company. How quickly is the financing arranged and how is the contact with the factoring company? Is there a fixed point of contact and how quickly are questions answered? Also, read other customers’ reviews to get a good idea of the factoring company’s service and customer satisfaction.
Flexibility
It can also be important to look at the flexibility of the factoring company. For example, can you decide which invoices you want funded and can you cancel the contract whenever you want? Again, terms and conditions may vary from one factoring company to another.
Experience
Finally, the experience of the factoring company is an important factor to compare. How long have they been in the market and what is their specialism? Also check if they have experience with companies in your industry and what their reputation is.
Factoring from Factris
The one-stop platform (Finance Automation for Business) makes your financing simple and fast. Here, you can easily upload invoices, track payments, and receive same-day capital. At Factris, the lowest fee tariff starts as low as 0.5% of invoice value! Want to know more about the possibilities at Factris? Feel free to contact us.