Invoice factoring can be an asset to business growth, but one of the key elements that make it a success is choosing the right invoice factoring companies in Kennesaw, GA, and beyond. Here are some questions to ask your prospective factoring company to help you decide.
What Are the Associated Fees?
You never want any extra costs to come out of nowhere and surprise you. Make sure that you ask your factoring company to clearly define the fees that come along with your factoring services, such as an application fee, due diligence fees, credit reporting fees, lock box fees, minimum monthly volume fees, and background search fees. Also, there are certain monitoring fees associated with your account, as well as wiring fees that can come into play when transferring fees. Not all factoring services have all of these fees, but these are just the types of extra charges that you should be aware of beforehand to avoid any surprises.
How Are Factoring Charges Determined?
Some factoring services will stick to a set rate, and others will use certain standards for calculating and measuring each individual case in order to determine interest charges. You’ll want to ask how your specific factoring company determines the fees for your transactions so that you can have a big-picture perspective before you make any big moves. Some companies start charging fees right away, and others wait until an established day after the initial transaction. Knowing when the fees start incurring can help you determine if you’re spending more than you meant to in the long run.
How Can You Avoid High Termination Fees?
You probably don’t plan to partner with an invoice factoring company forever. In that case, you’ll want to keep in perspective the cost of severance from the factoring company whenever you no longer need their services. Are you agreeing to an established term? What are the costs of terminating your account with the factoring company before the pre-established date? This can help you know your flexibility.