Accounts Receivable Factoring Services
There are many companies offering accounts receivable factoring services today, but who can take advantage of them? Who is accounts receivable factoring meant for?
Although the specific answers can vary by a wide array, the general answer is that any company, large or small (small businesses) that extend credit to their customers can take advantage of accounts receivable factoring solutions.
This includes businesses that offer a service as their product, for example a lawn care service, or a retail business that sells goods such as an appliances and furniture store.
There are some businesses that require special handling of their invoices, such as healthcare related businesses.
That said, there are plenty medical accounts receivable factoring companies out there that cater specifically to this niche.
Luckily, there is someone for everyone! There are some limitations to small business factoring however which is what I wanted to highlight in this brief article.
As you start searching for a partner to work with, you will find that most business accounts receivable factoring companies prefer working with businesses that have $5,000 to $10,000 in accounts receivables to factor or sell at a discounted rate.
Many companies also prefer the 30 day payment turn around window to minimize the risk of collection.
I am not discouraging you by any means if you don’t fall in this range.
There are factoring companies of all sorts, and many are looking for smaller businesses to serve. However, these companies typically charge a slightly higher fee on a relative basis.
Other businesses end up paying higher fees because of their industry, customer type, invoice profile and billing preference.
Regardless of this, most companies are eligible for factoring and can use this alternative finance strategy to accelerate their cash flows.
So Which is the best accounts receivable factoring company? Not that easy to answer. It highly depends on your business type and your objectives. But remember, there is someone for everyone out there!