Although invoice factoring has been around for centuries and is used by savvy businesses, there are still quite a few myths that make this business financing method misunderstood. Here are the top 5 myths about selling your accounts receivable and how they may be affecting your access to cash flow.
Myth 1: Invoice factoring is expensive.
FACT: Many of the “new” fintech companies with online presence and automated applications can be quite expensive, because their rates tend to be weekly rather than monthly. Most of the experienced factoring companies, like Universal Funding, are far less expensive than other alternative business financing options that you’re likely to find.
Myth 2: It’s hard to get approved for invoice factoring.
FACT: Invoice factoring is actually easier and faster than any other business financing option. Usually, approval takes just a few short days and transfer of funds only a few hours.
Myth 3: Invoice factoring is just for really big, well-established companies.
FACT: Many of our customers are newer, small to medium sized, and lack brand recognition. What they have in common are outstanding invoices (Accounts Receivables) for goods or services that have been delivered.
Myth 4: Invoice factoring will distress my customers.
FACT: Actually, your customers have minimal involvement with your invoice factoring company. The only noticeable change for them is the address where they send payments..
Myth 5: Invoice factoring is for companies that are desperate.
FACT: Yes, it can be. However, most often, it’s for companies that want to serve more customers and require greater cash-flow to expand their business.
For more information about how to effectively and inexpensively put invoice factoring to work for your company, give us a call at 1(800) 405-6035 or fill out a rate form and one of our factoring specialists will give you a call to start the discussion.