Factoring Business Studies Lets You See the Bigger Picture

Click here for our factoring case study.
Click here for our factoring case study.

It’s not always easy to get a clear picture of how factoring can affect your business. Sure, factoring companies will tout their advantages, but some businesses would rather stick to bank loans. Some even make use of credit cards to spur the growth of their business, despite the astronomical interest rate.

But there are some factoring business studies which shed light on the subject so that you can get a better understanding of its purpose. For example, there’s a book of actual factoring business studies, and it shows success stories as well as failures. You can also read up on various articles detailing actual companies which underwent the procedure.

How Does Factoring Work for You?

You can probably read up on many articles about what factoring is. After all, it’s a simple process. Instead of waiting 90 days for that $100,000 payment, you can get your $80,000 now. Then the factoring company gives you the rest of your money (minus the factor’s fees) when your customer pays in full.

But with actual case studies, you can get to see how it works precisely. For example, you can ask a factor for references in your industry before you take advantage of the factor’s services. Then you will know exactly how the process works, how much you get in advance and how quickly, and how much you pay for the privilege.

This is crucial information. While your situation may not be exactly the same as the other business, you two have something in common so at least the process and the experience will be very similar.

Is It Right for You?

This, of course, is the crux of the matter. With actual case studies, you can know precisely what kind of circumstances led a particular company to seek factoring services. For example, a business may have some trouble getting a loan from a bank. It may have cash flow problems, or it may have had a business opportunity that needed an extra infusion of cash quickly.

With this info, you can then see how such a solution that worked for others can also signify that factoring can also work for you.

When Is It Not Right?

With a case study, you can also find out if it’s not the right solution for your business. Even factoring companies admit that factoring isn’t for everyone. For example, if you have a very small profit margin then you’re just giving your profit to the factor.

OR it may also mean that a particular factoring company isn’t right for you. Perhaps their advance is too small, or their fees are too high. Maybe they want to lock you in a long term contract when you only need a short term solution, or perhaps they want complete control on which companies you should do business with. That’s why you need to look at several factoring companies to see what terms they offer. The best offer may just be good enough for your needs.

 

Published by

Chris Lanchech

Hi everyone, my name is Chris and I am a junior analyst at Neebo Capital and an inspiring blogger. We enjoy speaking with business owners and entrepreneurs who come to Neebo Capital looking for cash flow solutions. Give us a call toll free at 1-888-382-3766 or Visit us online at www.neebocapital.com

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