The popularity of account receivable factoring in Richmond VA is on the rise, and for good reason. For many small businesses in the city, this is welcome news and it gives them additional resources to fund their growth.
According to a survey run by the Ewing Marion Kauffman Foundation, Richmond is the easiest place to start a business in the entire American South. In fact, the city was rated #6 in the whole country for starting a small business. The survey questioned more than 12,000 small business owners around the country for the friendliness of the local environment to small business.
However, getting a loan for small businesses can still be problematic. This is a national problem, though and that’s why many are turning to accounts receivable factoring.
What You Get with Accounts Receivables Factoring
The basic explanation of factoring is simple. You get a percentage of the value of the AR (usually 70%) right away instead of waiting for the customer to pay in full in 30-90 days. When the customer pays in full, the factor forwards you the rest of the money, minus the fees for their services.
The speed in which you get the bulk of your money is not the only service you receive from a factoring company. You also get:
- Efficient credit investigation of new customers. Every time you extend credit to a new customer, you are taking a risk. What if this customer is slow to pay? What if they don’t pay at all? These are hassles you don’t need – you have enough problems as it is.
With account receivable factoring in Richmond VA, you can receive reliable credit investigation for all prospective customers so that you can identify the ones who are likely to cause problems. With the results of the investigation, you can determine the proper credit limit to set for each customer.
- Invoice ledgering and accounting. You may have to hire a receivables clerk for this job, but with accounts receivable factoring you don’t have to. Your factor can take care of this task for you.
- Fast and reliable collection of payments. Collecting payments can be a very frustrating part of your business, but payment collection won’t be your problem anymore when you deal with a factoring company. You won’t have to hire personnel to run after payments, so you’re spared of this extra expense. The collection process will be thorough because the factoring company is experienced in this matter. You’re also spared from having to deal with the unpleasant aspects of collection.
- Activity reports. Some factors can post their activities on your behalf online. That means you’re aware of what’s going on at any given time.
When you consider all the services offered by an account receivable factoring company, it’s obvious that the services you get are worth much more than the fees. Not only do you get the money you need more quickly, but you receive extra perks as well. The savings on that alone makes factoring a viable choice for your funding.
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