The Steps In Obtaining A Small Business Factoring Quote

by | Dec 23, 2016 | Financial Services


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Any small business owner who has gone through the process of applying for a small business loan knows the time, effort, and energy needed to simply complete the application process. Then, there is the time to wait while the application is considered, only to find out the application is denied because of credit ratings, time in business, or simply because of the type of business.

To find funding in a very business-friendly environment, getting a small business factoring quote is a simple, easy procedure. Most factors allow you to complete an application online and approval may be available in one business day with funding provided in your account in just a few days.

Factoring Summary

Before you ask for a small business factoring quote from any factoring service, take the time to review their rates and fees. It is also helpful to understand the process and to know how factoring works.

In a very simple explanation, the factor buys the invoices you wish to sell. The factor then wires up to 80% or more of the face value of those invoices to the business account. When your customers pay the invoice (to the factor), the factor deducts their fee and sends you the balance.

Getting Started

To get started, review the information on the factors you are considering. Make sure they offer a low rate, have no additional fees and that they are geared to working with business in your industry and of your business size.

The next step will be to complete the application form to obtain a small business factoring quote. You should not have to pay an application fee. You will need to provide information on the invoices you wish to factor.

The factoring service will then complete due diligence on the invoices and your customers and then provides funding based on the agreed upon percentage (usually 80% or more of the value).

This funding is typically done through direct deposit to the business account you specify in the application. Once your customers pay the invoice in 30, 60 or 90 days, the factor will take the fees for the service and wire the rest into your account.

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