Myths Busters in Factor Financing:
Myth 1: My credit is horrible. I am going to get charged the max at the worst possible rate!
CHECK: When you finance your open accounts receivable invoices, factors consider the creditworthiness of your client – not you. Factors want to know the likelihood that YOUR CUSTOMER is going to pay you on time.
Myth 2: I do not want another loan. I have enough payments I have to make!
CHECK: Factoring is not a loan. In fact, you cannot walk to your local bank and factor. Factors pay you for your open accounts receivable invoices at a discounted rate. They are paying you upfront for work you have already completed. Think of it like a cash advance on your paycheck, but even better!
Myth 3: I am losing money if I sell my open accounts receivable invoices at a discount!
CHECK: You are losing money when you have to wait 30, 60, or 90 days to get paid. We have all heard the expression, “Time is Money,” and “Money on time is better than money late.” In fact, you can build in “The Hard Cost of Factoring”, by simply adding an administrative charge to your service or product offering when invoicing your customers.
Your customer chose you because you’re the best at what you do and after partnering with a factor, that has an excess of resources such as; Credit checking, back office support, administrative assistance and years of experience and advice from your account manager, your customers will easily realize the benefits of a professionally run back office business relationship – from factor financing your receivables.
Myth 4: If I use Factor Bid, I am going to have to pay a fee.
CHECK: Factor Bid is a FREE resource for small-medium sized businesses. You’re under NO OBLIGATION TO FACTOR. Factor bid gets you a few competitive offers from factor finance companies that want to buy your outstanding receivables for immediate cash!
Myth 5: Factor Bid is going to obligate me into choosing a factor, even if I don’t like them.
CHECK: Factor Bis simply matches your business invoices with the top factor finance companies who finance open accounts receivable invoices within your industry. You will receive a few offers to buy your outstanding receivables for immediate cash. When factors know they’re competing for your business at the exact same time, you’re going to get the very best offers available, in order to earn your business and trust today!
Myth 6: No one factors their invoices!
CHECK: Smart business owners factor all the time. They know the value of a dollar and the benefits of getting paid right away. From industries such as freight transportation factoring, construction factoring, healthcare factoring, technology factoring, manufacturing factoring, staffing factoring and more. Millions of businesses factor their open accounts receivable invoices every day and because of it enjoy very profitable businesses. Did you know that Snapple factored it’s receivables for years to grow one of the most successful distribution models still in use today?
Myth 7: I have never heard of factoring! This is a scam and a new way people are trying to get my money.
CHECK: Factoring has been around for thousands of year. Have you ever heard of the Mayflower or the settlement at Plymouth? That’s right! The whole expedition was funded by factoring. Factoring is even documented during the Roman Empire. Check out your Balance Sheet. Do you see Accounts Receivable under the Assets column? An Asset can be tangible or intangible, owned or controlled, and has positive economic worth. You are sitting on an asset that can (and is still being today) leveraged for immediate cash.
Myth 8: Factors don’t care whether I grow my company. They are only in it for themselves.
CHECK: It is in the best interest of the factor that you grow your company. When you grow, you produce more invoices, which means MORE invoices for factors to finance and ultimately MORE CASH in bank at the end of the year. If you do well, they will do well. It’s a win-win for both your growing company and the factor financiers company.
Myth 9: I can factor with the banking institution I have banked with my entire life.
CHECK: You cannot walk into your bank and expect them to factor. Banks are set up to deal with loans, not purchase your assets at a discounted rate. Remember, you are selling your open accounts receivable invoices. Banks do not purchase anything because their purpose is money lending/investing. Factor financier’s exist to PURCHASE your business assets (invoices) for increased capital for your business. Yes they do charge a fee, but they also assume risk in advancing you a large part of your invoice within 24 hours so you don’t have to wait 30-45 days for your customers to send the check.
Myth 10: It is a hassle to factor and will take up a huge amount of my time.
CHECK: With Factor Bid, you are now quickly matched with factor financiers within your industry who are competing for your business. In exchange for two minutes of your time, Factor Bid will save you hours of research, thousands of dollars in missed opportunity and the knowledge and leverage you get from receiving a few offers to buy your receivables. We even offer terminology you need to know and questions you need to ask when each factor finance company competes to win your ongoing business. I know, I know, we are truly awesome, and FREE!
Myth 11: There is no Factoring App for invoice financing.
CHECK: Go Mobile – Download Factor App for Apple and Google Smartphones and start factoring from anywhere.
Factor App for iOS Apple Smartphones
Factor App for Google Android Smartphones