Many of your business cash flow needs can be solved with invoice financing. While invoice financing isn’t a solution for overall working capital management, it is an effective way to get an influx of money to fill any gaps in cash flow that might occur, or to help support new growth.
Let’s assume you have decided that invoice financing is the route you want to take to help fill any working capital needs your business might need. Being diligent and researching your options, as well as paying close attention to the contract will help your experience be positive and supportive for your business.
There are many options available when you look for an invoice financing company, so let’s take a look at what criteria you will want to pay attention to when selecting a company to work with.
1. Do Your Research
Shop around online and read online reviews. How did other companies find the experience? Does the company provide any case studies from happy customers? Is there any press about the company that you should pay attention to?
How transparent is the company with its management team, fees, and rates? Many companies hide their management team which often leads to confusion and frustration because you don’t know who you’re working with, and who you can go to if anything is wrong. In addition, do they tell you their fees and rates upfront? Make sure you understand the fees you’ll be charged and don’t be afraid to ask the tough questions. This is the area that many suppliers end up paying a lot more than they expect, and we don’t want that to happen to you.
3. Run the Numbers
No one likes surprises when it comes to paying extra fees, so run the numbers and make sure that there are no hidden fees or increased rates. Be sure you’re comfortable with the fees or rates that you’ll be charged.
4. Read the Contract, All of It (Especially the Fine Print)
Much like no one likes surprises when it comes to extra fees, no one likes surprises in a contract that could hold you liable if your customers don’t pay, or increase your rates if it takes them a while to pay, or if you decide you know longer need to use the service. Make sure there aren’t penalties for ending your contract, stopping automatic renewal, or more.
You shouldn’t have to jump through hoops just to finance an invoice. It won’t do you any good to get your invoice paid early if you have to spend your time trying to get your invoice paid. Ideally, you want to work with companies that are already integrated with your customer’s systems. Then you can just select the invoices you want to be financed and submit them easily.
If you want to learn more about invoice financing and if it’s right for your business, contact our team at any time.