It has been estimated that the United States is home to about 28 million small business. If you own or manage one of them, you know that cash flow can be an issue of even the most successful of endeavors. Many companies turn to business factoring services to keep things running smoothly. Unfortunately, there are a number of myths out there about small business invoice factoring. Here are five of them:
- Only businesses who are on their last legs use business factoring services. This could not be further from the truth. In fact, small business factoring companies are more helpful to businesses who are doing well. When businesses take advantage of invoice factoring services, the result is not only an increase in the cash flow they experience but this cash flow is stable and secure throughout the year. This allows companies to keep doing what they do best. While many people think of small businesses when they think of invoice factoring but there are a number of larger companies that also take advantage of invoice factoring services.
- Business factoring services are too expensive to afford. The amount you will be charged does depend a lot on what the circumstances are that send you to the business factoring services company in the first place. The prices, like all services offered in a capitalistic society, vary but are not prohibitive. Some people who use the services liken the fees associated with invoice factoring to those charged by credit cards on those transactions.
- Using these services will hurt your reputation. Some people have the belief that if they use even the best invoice factoring service, word will get out and customers and clients will think poorly of them and will go elsewhere for the goods or services you offer. Now, it is true that when you work with an invoice factoring company, they are legally required to inform your customers and clients that they have bought your invoices and will be collecting on them but they will also assure those same people that nothing will change in your relationship with them. You can also communicate with them when you sign on with these business service companies.
- If you own or manage a small business, the best invoice factoring companies will never talk to you. This is the opposite from what they actually do. Now this does not mean that every company out there who offers business factoring services will be able to handle your invoice stream but that does not mean you cannot find help with your cash flow from another business factoring firm. To improve your approval chances, showcase your positive future prospects. Show the business factoring services company how you plan to use the money you get from working with them. Never fear! Because you are small does not mean you cannot get help with your cash flow when you really need it.
- You will give up control of all of your invoices when you sign with a business factoring company. If your business has been in operation for a long time, you may have clients or customers for whom you will not want to give up any part of their accounts. When you are dealing with invoice factoring services companies will let you retain some of your invoices. There are a number of reasons you may want to be the only contact for long term or bulk customers and clients. While you may have some problems with your cash flow, business factoring services firms understand that there is no need to rock the boat and disrupting relationships you have with your special clients and customers.
Even the most successful and well-run businesses may, from time to time, have issues with their cash flow. There may be external reasons for this, problems that arise from conditions in the economy as a whole. Whatever the reason, even when cash flow slows down, you still have bills and employees to pay. These cash flow slowdowns can also prevent you from expanding or offering more products and services. The good news is that when you find yourself in these situations, you can turn to business factoring services to help.