FastARfunding is being high-lighted this week for being the online leader in accounts receivable factoring. The company takes pride in their eco-friendly, paperless methods as well as their reputable speed of providing funds in as little as 48 hours. We welcome these accounts-receivable-factoring-big-kids-on-the-block to share some words of wisdom when completing an online factoring application:
So you’ve heard of invoice factoring and want to increase your business cash flow by unlocking some of the value you have in your accounts receivable. You need a quick and reliable partner for future access to cash in order to invest in your business and help it to grow. You are thinking of filling out an application with an online factoring company. Before you jump in, here are a few items you should have at your fingertips as you begin the application and “underwriting” process with a factoring company:
1) All of your company’s formation documents including LLC and/or articles of incorporation. If you are currently operating as a sole proprietor, you can easily and inexpensively establish a new company for yourself using mycorporation.com. All factoring companies will initially do a corporate or LLC search in the respective State where you operate in order to seek confirmation of your “company’s good standing”.
2) Basic information about the owners of your company, how long you’ve been in business and gross annual sales.
3) Information about your top 5 customers (that you intend on factoring) including the amount of sales you complete with each of them on a monthly basis and the terms you extend to each customer (e.g. net 30 or net 60).
When you are selecting a factoring firm on the Internet, be sure to check if the firm is registered with the Better Business Bureau and they use a secure internet website for the collection of data when you fill out the initial application (typically the address bar will turn to a green color and you’ll see https://secure in front of the web address). While there are many companies that advertise a free application process and other “goodies” like no monthly minimums, extremely low factoring fees (e.g. less than 1%), and no long term contracts, please be cautious. No finance firm can offer all these items to all clients or they would not make enough money themselves to survive! So, take the time to call the factoring company directly before you fill out an application, and ask one of their representatives some basic questions to verify if they will really be able to deliver what they say. Most factoring companies will gladly take your phone call and walk you through a few basic questions in order to make sure you’re a good potential applicant for them. If you are not a good fit, they may refer you to another factor that specializes in your particular industry.