Invoice factoring is popularly used by many firms across the globe, but there remains a few myths about the process which, while widely debunked, are perhaps not as well-known as they ought to be. Essentially, business invoice factoring will allow you to sell your invoices or accounts receivable on at a discount – which can allow you to obtain cash quicker than having to wait for money to clear from certain sources. Here are five major myths about the process you need to know about before getting started.
MYTH: Funding Invoices is Expensive
This is a fairly major concern, and it can turn firms and business people off the idea of factoring completely. However, it remains to be said that factoring fees are decreasing gradually, and the overall cost of the process will largely depend upon where you may be in the process of running your firm. For one, while you are growing your business, it may be more prudent to consider factoring as opposed to avoiding opportunities or selling equity to make money.
MYTH: Factoring Firms Harass Clients and Customers
Another big concern of businesses entering into invoice factoring is that the third parties selling invoices too will be heavy-handed with their customers in receiving cash. It remains to be said that trusted experts such as Invoice Funding only ever follow legitimate, legal processes throughout factoring, and as such we are proud of our focus on customer service. Rest assured, your customers are always in good hands.
MYTH: Factoring is an Option used by Businesses in Trouble
It can be easy to be put off by processes such as business invoice factoring as it may seem that it can be used as a last resort, or as an option for immediate cash in desperate times. However, it is more widely used by growing businesses with promising futures and for start-ups who are unable to obtain bank loans as a result of a lack of trading history. It is financial support that stimulates growth – not a crutch.
MYTH: Customers Dislike Invoice Finance
Some customers may not understand the process of business invoice factoring right away, but the truth to this matter is, passing invoice collection over to third party experts such as Invoice Funding will allow you to spend more time developing professional relationships with your clients, and less time chasing them for finance. Clients can therefore expect a closer and more comprehensive service – and they will likely understand that you have a separate team or body in place to collect on invoicing.
MYTH: Approval Takes a Long Time
Invoice Funding are one of the UK’s leading Factoring Brokers, we comprehensively analyse your case and are proud to be able to offer you an educated decision on your application for invoice factoring within a matter of days. While bank loans and financing can take months – we only ask for a few days at a time!
If your firm is in need of more efficient cash flow or is aiming to grow considerably over the next few years, Invoice Funding can and will help you. Get in touch with our team of friendly experts today through the contact form – and we will get back in touch with you.