Factoring, also known as accounts receivable financing, was once something of a mystery to many businesses and customers. As it has moved more into the spotlight, it has become a popular option for many businesses to use in lieu of bank financing or credit cards. There are still some businesses that are hesitant about using A/R financing due to what their customers will think if they use a factoring company such as Universal Funding. Your customers should know that factoring is a common business practice, it can be a good sign of financial health for your business, and it won’t change your service or relationship with them.
It Is a Common Business Finance Option
More and more businesses are turning to receivables financing because it is an easy way to generate cash flow. In some cases, it is more cost effective to hire a factor over building an entire in-house finance or accounts receivable department. This is not a practice that businesses hide, nor should it be.
It Is a Sign of Financial Health for Your Business
Most factoring companies look into your business to see what your financial future looks like. If things look grim, these companies usually won’t purchase your invoices. Therefore, the fact that you are selling invoices is actually a sign that your business is likely to continue thriving—which is great news for your customers.
It Doesn’t Change Your Services or Products
Although your customers will now be sending payments to an alternate blind lock box, it doesn’t alter the products or services they receive from you. Factoring is basically outsourcing your accounts receivable department; it has no effect on the goods or services your business provides. Your customers can trust that the quality of your products and services will remain unchanged.
Serve Your Customers Better
It’s important for your customers to understand that receivable financing from Universal Funding ultimately helps you serve them better. You don’t have to worry about collecting the money from them, and you may even be able to take on bigger accounts. Complete our online rate form for more information on the business advantages of factoring.