I am Lost Trying To Choose The Right Factoring Provider
We often refer potential client on to other factoring companies or banks so we have put together a brief overview of how to communicate with a potential factoring provider.
You have scanned various resources to look for the factors that are likely to suit your needs, based on your industry, business volume, size, and location. You now also know what features to look for in a factor. Now, armed with this information, you must talk to the short listed factors so that you may decide on the one you want to work with. You have those invoices to factor, don’t you? So let us move on to what to ask your factor and what information to give, in turn.
You will, most likely, meet or talk to the factor’s business development staff or, perhaps, the owner. To begin with, give the factor a brief outline of yourself and your business so that the factor can decide whether you, too, will meet their criteria to work together. After you have given this information, you will be able to gauge whether you are suited to each other. If you find that you are not – no need to worry. You can always ask for referrals.
If you are confident that your customers are creditworthy and that you can reach new heights of growth once you start factoring, you will soon find the right factor.
You can cover the following points while describing your company to the factor:
- Industry to which you belong
- From – Propriety Limited (Pty. Ltd.), Sole Trader
- How long you have been in business
- Your experience
- Factoring volume expected per month, along with number of invoices on a monthly basis
- Average invoice value
- Number of customers to factor
- Names of customers/industry
- Payment history of customers
- What the factoring money is going to be used for – payroll expenses, buying equipment, hiring staff, meeting tax payments, etc.
- Inform the factor about any existing loans, unpaid tax judgments, pending litigations, and any bankruptcies