Paragon Financial Group is funding during the COVID-19 crisis.

How to Choose a Large, Full-Service Factoring Companies

If you’re a small business owner, your need for cash to meet working capital requirements is typically top-of-mind. When you use factoring to meet those requirements, you should consider the benefits of working with large companies. Aside from that, also consider the full-service factoring companies as opposed to a smaller, more limited factor.

The evidence is clear that larger factoring firms, with more significant financial resources and higher credit standing. Typically, firms provide both a broader array of services for clients as well as outstanding customer service.

How to Choose from a Large Factoring Company

How to Choose a Large, Full-Service Factoring Companies

What Large Factoring Companies Provide

A large, full-service factoring firm will perform a full-scale credit history on your prospective customer companies and will maintain ongoing credit monitoring of your client. Factors will provide accounts receivable financing and invoice factoring. Also, it offers non-recourse financing with credit protection, purchase order, and import financing – even government contract financing. An established factor will have the expertise and experience working with clients in a wide range of industries.

They will also be able to provide funding to startups whose credit is currently weak but whose prospects are solid. Large factors also can provide financing to firms that have a concentrated client list – and even deal with companies that have IRS tax issues.

Factoring Services in a Nutshell

One thing is sure – the large factoring firm will be able to provide you with everything you need to meet your working capital requirements.

Here’s how it works: Many of your customers may be stretching out their invoice payments for 60 to 90 days or longer. The long waiting period leaves you with a cash shortfall. With factoring, you submit your receivables to the factoring company and get the cash you need almost immediately. The factor will advance you up to 90% of the value of the receivables. When your customer pays down their invoice, the factor will remit the balance to you. This balance is less a small percentage fee for their services.

Selecting the Right Factoring Firm

When seeking to partner with a large factoring firm, you need to keep one thing uppermost in your mind. That is, like any business, all large factoring companies are not alike, nor do they all provide the highest degree of service or value. Therefore, you need to be careful about working with factors.

You need to conduct extensive due diligence to determine which candidate firm provides the best value over the longer term. For example, do they have a long track record of successfully working with firms in your industry? Do they have significant expertise in your industry? Can they provide you with reliable references who will vouch for their capabilities and excellent customer service?

There are factoring companies that stand out among larger factoring companies. For decades, these factors have combined a robust entrepreneurial management team with outstanding customer service to become an acknowledged leader in the invoice factoring and purchase order funding industry. From manufacturers and distribution companies, and from staffing companies to government contractors, Paragon has helped more than 2000 business owners to grow their companies. At the same time, they are helping to eliminate any cash flow shortfalls or credit issues.

Conduct careful due diligence before you decide on which large factoring firm is right for you. On that basis, we’re confident that, after your analysis, Paragon Financial will stand out in your minds as a go-to funding firm.

Ready for fast, secure funding now from a large, experienced factoring company?

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