Cheap Invoice Factoring Services | Compare Costs and Options
The main thing that determines how much a factoring service is going to charge is how long the invoices have been outstanding. The longer the invoices have been outstanding, the higher the rate will be that the factoring services assess.
INVOICE FACTORING CAN AND SHOULD BE AFFORDABLE
The other primary factor used to assess the pricing for factoring is how much volume you are providing to your factoring service. The higher the total dollar value of invoices that you have in your factoring service process, the better the chances are that you will be able to negotiate a more economical rate compared to the base rates posted by the firm. Different industries also have different pricing standards in place. So, for instance, in a high-risk field such as construction, there may be a higher standard rate in place, but in a more stable field such as staffing, you may be able to find bargain rates.
What are Factoring Services?
Factoring services are third-party organizations that process invoices for their clients. The basic model involves a company who has outstanding invoices, which then sells these at a discount to the factoring service. Factoring can be used as a tool in a few specific situations, but often companies rely on factoring services when they need a quick infusion of cash, or if they have a number of clients whom they are having difficulty collecting.
Factoring services are often used as a kind of loan – instead of going to the bank and requesting a business loan, you instead take your invoices to a cheap-priced factoring service and are then advanced the agreed-upon amount of money based on your invoices. This is usually a certain percentage of the total amount owed to your company on the invoices, which the factoring service will then attempt to collect. This can provide a way to access extra funds for a business when for any number of reasons, traditional bank financing may not be available or advisable.
When the factoring service collects the outstanding invoices that they have purchased from you, they will then pay you the total remaining amount owing on the invoice, minus the service fee that they assess on all of their work.
What to Look For in Low-Cost Factoring Services?
When looking for bargain invoice factoring services, one place to start is by making sure a company is willing to work with you to negotiate a deal that works for both parties. If a company is unwilling to even discuss flexibility on their rates, you should be aware that there are likely competitors who are, and that you may not be finding the most low-priced option available to you.
The next thing to look for is a selection of verifiable references. It can be very enticing when a factoring service promotes its rates as being a bargain for the industry, but unless they have a proven track record that isn’t necessarily valuable to you in the real world. A company that is proud of its success should be willing to provide references that you can speak to in order to verify its success at recovering outstanding invoice amounts.
It can also be useful to look for an inexpensive factoring service with experience in your industry. As previously mentioned, different industries operate in specific ways, something that can affect the invoice recouping process. If you’re representing a mining company, then you should probably look for a factoring service with experience in that sector. Just because a company has a low-cost service doesn’t mean they have the experience to get the job done, and it can sometimes be worth paying a bit more to ensure a high success rate – something experience in a given field plays a role in.
Compare prices and learn how invoice factoring services work and why a company would use a factoring company.
Bargain Factoring Service Companies with Discounted Prices?
Some factoring services have a reputation for being able to offer low-cost rates to their clients. These companies offer a good combination of economic rates and a proven track record and are a good place to start the search for a factoring service.
American Receivable: American Receivable is a top-ranked factoring company with a proven track record. Best of all, its services are available at a bargain compared to some of its competitors. With a 38-year track record, American Receivable has proven itself in the industry and is a reliable place to start looking for someone needing a cheap factoring service.
Bluevine: Bluevine makes it possible for businesses to receive cash flow boosts of amounts ranging from $20,000 to $2.5 million based on their invoice factoring. Bluevine features an intuitive electronic system that allows you to connect your bookkeeping software to Bluevine so you can easily choose which invoices to borrow against in order to fund your business. Best of all, you can access from between 85-90% of the value of an invoice when using the Bluevine services.
Factoring services might be a new and unfamiliar method of funding a business to some owners. However, if you have a strong client base with a lot of outstanding invoices, factoring can provide a method for ensuring a steady cash flow into your business so that you can continue to grow without having to wait for every invoice to be cleared. While this might not be the right option in every situation, it is another valuable tool to be added to the toolbox of entrepreneurs and business owners looking for creative ways to ensure steady cash flow for their operations.