Will factoring hurt the reputation of my business?
You are not the first person to ask this question. This is a worry for many companies.
Factoring is now a common method of business finance across the globe in most industries. In 2015, worldwide reported factoring volume reached $2,583 billion dollars. Many businesses now count on factoring as their major source of ready cash. Your company will not be alone.
Does the factor matter? Absolutely.
Finding the right Factor to meet your needs is critical. You want a Factor who will treat your Customers with the same level of professionalism that you provide. Things to think about include:
- How does the Factor treat you during your initial conversation?
- How forthcoming are they on details of their program?
- What is their approach to the Customer when verifying invoices?
- What is their approach and procedure on collections?
- How difficult is it to terminate the program if you are not happy? Are there penalties?
All factors have procedures that they follow which they will share with you. Make sure their approach will work for you. Companies have personalities. Do you like theirs?
Control Your Fate
Your Company is the primary driver of its own reputation. You have a Customer base which knows:
- You offer a worthwhile product or service.
- You deliver on time and as requested.
- Your employees are knowledgeable and friendly.
- You meet your commitments.
If you decide to work with a Factor, your direct communication with your Customers will help make the transition a smooth one. With a good factoring relationship you will maintain your positive reputation while improving your Company’s cash flow for growth.