Invoice Factoring Articles / Invoice Factoring Questions to Ask: Part 3 of 3
Factoring companies: ask these seven questions to compare and contrast your options: Part 3 of 3.
In part 1 of “Find the best factoring company for your business: read an invoice factoring contractlike a pro,” you learned two high level questions to ask prospective companies. In part 2, you added three more specific questions to ask receivables factoring firms. In part 3 of this three-part series, you’ll get to the nuts and bolts with the final two questions to ask to get the best invoice factoring contract for your company.
Ask the following questions of your prospective factoring companies:
6. Make a savvy financial decision: ask about specific fees charged by receivables factoring companies.
Ask prospective factoring firms about the cost of the:
- Application fee
- Due diligence fees
- Credit reporting fees
- Background or lien search fees
- Factoring company lock box fees
- Minimum monthly volume fees
- Charges to add a new receivables factoring client
- Early termination fees from receivables factoring contract
- Upfront advance fee and then an interest fee (sometimes referred to as a discount fee)
- Fee for same day advances
- Monitoring fees
- Automated clearing house (ACH) fees and
- Wiring fees.
Some invoice factoring firms have a flat rate fee that includes all services, except for the monthly Internet access report fee.
7. Ask how factoring companies calculate interest charges and choose the most favorable.
Some factoring firms begin charging interest as soon as an invoice is issued. Under this system, you could end up paying several more days’ worth of interest than if your factoring company began charging interest on the date you receive funds. Also ask factoring companies if you can select what day of the week to receive your funds and pick what’s best for your company.
Select a quality invoice factoring company now: get immediate funding to grow your business.
Now that you have the tools and knowledge to evaluate factoring companies, you can decide which factoring company will grow your business the fastest. Don’tmiss out on lucrative business opportunities because of poor cash flow any longer! Contact companies and get your factoring loans to get growing now.
