Although we’re proud to be one of the most trusted and successful receivables financing companies in the American Southeast, we’re acutely aware that we’re not the only place businesses can turn for these lending solutions.
Obtain Flexible Financing That Fits Your Needs
We’ve been in this business a long time, and receivables financing has existed in some form or another for much longer, but in recent years the industry has seen an explosion of newcomers. This type of business financing is now a multi-billion dollar industry operating around the globe, according to Factors Chain International, an umbrella organization for independent receivables financing companies around the world.
With all of these choices, we realize that figuring out which particular financing company to choose can be a bit overwhelming. That’s why we’ve put together this list of essential questions to ask any potential receivables financing company you might be considering. We hope The Commercial Finance Group will have the chance to answer these questions for you, but even if we don’t, we think they’ll help you to be better informed about risks and benefits, and ultimately make the right decision for your financial future.
Questions To Ask Your Finance Company
How Long Have You Provided Receivables Financing?
As we noted in the introduction of this post, there are more companies providing accounts receivable financing than ever before. While we realize that all businesses have to start somewhere, we caution you against working with an inexperienced company. You always want to be sure that the finance company you choose not only has a successful track record with receivables financing, but also that they’ve found success with companies of a similar size and scope to yours.
What Is The Fee Structure?
The type of fees you’ll be required to pay for receivables financing will often vary depending on the industry of your company as well as the organization of the finance company with which you’re consulting. You may be asked to pay a flat fee or a percentage of total invoice value. You may also be required to pay additional fees for money transfers, software, collateral, and other operational costs. While companies can charge whatever they want, it’s important that they disclose any and all fees up front so you can make an informed decision.
What Are The Terms?
In addition to the fee structure, you’ll want to request complete disclosure of contract terms as well. Short-term contracts are more common and typically more advantageous for you, the client, than long-term contracts. However, some accounts receivable financing companies will offer price breaks or more flexibility if you’re willing to sign a long-term contract. The important thing is to be fully aware of the pros and cons, as well as your legal obligations.
Is Your Receivables Financing Recourse Or Non-Recourse?
If you’re not sure about the difference between recourse and non-recourse financing, we’ve covered the topic in a recent blog post. For now, suffice to say that there are different levels of risk, both for the financing company and the client, associated with each of these options. In ideal situations, your chosen company would be able to provide both on an invoice by invoice basis.
How Long Will It Take To Get Funded?
Don’t be afraid to ask this question! You are seeking receivables financing because you need to access working capital and don’t want to wait around for the slow wheels of a traditional bank loan. The company in question should be able to provide you with detailed information about the timeline for funding if and when you’re accepted.
How Else Will You Help Me Grow?
While receivables financing provides a big boost for growing companies, obtaining funding shouldn’t be the end of your relationship with your chosen financing company. Ask about the potential for credit analysis and evaluation of the competition in your industry so that you can make decisions that increase your bankability for the future.
The Commercial Finance Group would love the opportunity to answer all these questions for you, and more!
Contact us today to learn more about receivables financing solutions. You can also get started by browsing through our client success stories to see how the variety of custom lending solutions we provide has helped businesses just like yours achieve their goals and much more.
