When you’re interested in invoice factoring or accounts receivables factoring for your business, choosing the right company and the right services matters. Picking the right partnership for your business is key, since growing and expanding your business requires more than just funding. For help in making the right selection, you can continue reading this guide for choosing the right factoring services.
Recourse or Nonrecourse
There are two basic types of factoring services. Recourse factoring services allow the factor (the factoring company) to charge back to you any invoices that remain unpaid after 90 days. This means that your company is held liable for any delinquent accounts, and the factoring company does not provide credit protection for unpaid invoices. Non-recourse factoring services release your business from any liability on delinquencies. The factor would then be responsible for doing the legwork needed to collect from unpaid invoices but this may involve more rigorous credit vetting of your customers.
Recourse factoring services are by far the most common, and they’re also very competitively priced. On the other hand, non-recourse factoring services tend to be costlier, and they’re not as frequently offered. A non-recourse factor will likely scrutinize the creditworthiness of your clients far more closely and, depending on what they find, they may not be willing to work with all businesses.
The Right Size for Your Business
Factoring companies come in all shapes and sizes, and some of them prefer businesses that fit a certain mold. If they prefer a particular volume of invoices, a smaller business might not be able to meet the demand. However, some factoring companies specialize in working with small businesses and startup companies. It’s important to find a company that fits your needs and wants to partner with you. Be sure to find a factor that meets your needs and is happy to enter into a partnership with you.
Many factors will offer online account management and additional services such as wire advances and sometimes prepaid cards. They may also partner with collection agencies or provide other extra features and services to businesses. Depending on what’s important to you and your business, look for factoring companies that can meet your demands and can give you those benefits that you’ll actually use. Factoring services in Kennesaw, GA, can come with a number of different perks, but if you won’t make use of them, they’re not a selling point.