As we detailed in a previous blog, your ability to run a successful small to medium-sized business hinges on the strength of your decision making.
Hire the wrong employee, sign a lease for the wrong building, or order supplies from the wrong vendor, and you could find yourself with some serious cash flow issues that slow the growth of your business.
While the finance solutions provided by a factoring company can represent a wise decision in terms of fixing short-term problems with working capital, it’s essential that you steer clear of the unscrupulous factoring companies lurking in this self-regulated industry.
When you’re searching for a new car, you check the websites of several dealerships to compare prices, and you should employ the same tactic when it comes to factoring. This helps to ensure that you choose the company with the best terms.
You wouldn’t hire a babysitter without checking their references, and again, you should employ the same tactic when it comes to choosing a factoring finance company. Ask for references from long-term clients (two years or more) and be sure to check online reviews.
Be Wary Of Long Contracts
Factoring companies that obligate you to sign a multi-year contract are a big red flag. Unless you think your business will need receivables factoring over the long-term, or there is a substantial discount for signing a multi-year contract, it’s usually a good idea to avoid them.
Contact The Commercial Finance Group in Atlanta to learn more about our factoring services today.