Factoring is a great way to get cash for your business. It’s also a great option for companies that don’t have good credit or aren’t yet established. However, there are many factoring companies, and some may not be the best choice for your factoring company. Before you decide on which factor to use, it’s important to do some research on the industry and what factors offer.
Industry knowledge and experience
Factoring is an easy way to get cash in a short amount of time. However, not all factoring companies are created equal.
You should also verify that the factoring company has a good grasp of your industry. Ask them how long they’ve been in business, what kind of companies they work with, and if they specialize in your industry.
You should also check to see how many clients they have, how many employees they have, and how many years they’ve been around.
If a factoring company has been around for quite a while but doesn’t appear to be growing much or steadily building its client base, then it’s probably not worth working with—there could be something wrong at the core of the business model (or even fraud).
Customer service and immediacy
Customer service is important when choosing a factoring company. You want to know that you can reach them easily and they will be able to help you with any problems or questions that arise. Immediacy is one of the ways this can be seen in a positive light.
If your customer service representative responds promptly, then you know that they are paying attention to your needs as clients and working hard to meet them.
Customer service also involves:
Having an easy way for clients to contact their representatives (phone number, email address)
Being able to answer questions about the company’s services
Following up with clients after initial contact
Factoring Terms and Conditions.
The terms and conditions of a company’s services should be clearly stated on its website. You should be able to look at these and understand what you are getting into before signing up for anything. If there are any clauses that seem unclear or confusing, then it is best to ask the customer service representative about them before making your final decision on whether or not to sign up.
Funding turnaround time
Funding turnaround time is the period of time between when a business applies for funding and when they receive it. As you might imagine, this number can vary greatly depending on the type of factoring company Australia or lender you choose to work with.
For example, some companies are able to fund your receivables within 24 hours, while others can take up to 30 days or more.
The importance of funding turnaround time lies in how it impacts your business operations—the faster you get paid for your invoices, the better off you’ll be financial.
In addition, there are times when slower funding turnarounds can actually cause problems with cash flow throughout the month because they delay payments coming in from clients whose invoices were previously funded by other companies or lenders at faster rates than yours may be funded now (or vice versa).
We hope this article has helped you understand the factoring process and the available types of factoring companies.