When I read articles today titled "What is Factoring?" I feel like the passenger on a plane listening to the flight attendant explain how to buckle and unbuckle a seat belt. Really? My three-year-old grandson can buckle and unbuckle his seat belt. Doesn’t a business person know what factoring is by now? It has only been around for a thousand years. Factoring is very simple and doesn’t need pages upon pages of text to explain. When a business generates an invoice to another company for goods or services, a factor will buy that invoice at a discount for cash when the goods are shipped or the services are performed.
What you want to know is, which factoring company should my business choose? Let’s face it, whether it's factoring, banking, a home mortgage, or a car loan, money is money.
Picking the right factor is not about money, its about these five simple points:
Are the factor's rates competitive?
Does the factor have a good reputation within the industry?
Does the factor understand my line of business?
Does the factor have a well seasoned staff who can provide best in class service?
Will the factor stick with me if there is a hiccup in my business?