How to Choose a Manufacture Factoring Company

Until recently, US companies have relied on foreign manufacturing plants. These manufacturing plants are located in countries like China and Cambodia, where the labor costs are much lower. But in the last couple of years, many industry experts are saying that US manufacturing is poised to make a comeback.

There are several reasons for this new trend. One reason is that the current manufacturing scheme is becoming more expensive for US companies. Labor costs are increasing overseas, and it’s also becoming much more expensive to transport these goods from abroad due to high oil prices. Then there’s also the fact that US manufacturing is still the leader in terms of technologies. As Steve Forbes says, the resurgence of US manufacturing is because the US has more qualified people who have the proper training.

This is welcome news for the US manufacturing industry, so if you are part of it then perhaps you may be able to swing some sizable loans from your bank. But if your bank still has reservations or is taking too long to process your application, then you can always count on manufacture factoring services.

But of course, you need to pick the right manufacture factoring service. Here are some considerations before you make your final choice.

  1. Make sure the financing company fully understands your manufacturing business. Each type of manufacturing company has its own particular processes and challenges. A food manufacturing company is different from a computer parts maker.

So you need a factoring company which doesn’t just have experience in manufacturing but in the kind of manufacturing you’re involved in. This will save both of you a lot of time and frustration in negotiating a fair contract that’s amenable to both sides.

  1. Check the history of the management team of your factoring service provider. It’s not just the name of thecompany you have to check, but the names of the people running the factoring company as well. If the factoring company has a sterling reputation, make sure that the people running it have been involved in the company from the beginning. If they are new, check and see if the company they left has a good rep too.

You can’t be too careful. Some people have a bad impression of the factoring industry because of a few bad apples who took advantage of the credit crunch back in 2008, when the recession really had lots of companies scrambling for funding.

  1. Clarify the details of your factoring contract. The most important thing to clarify here is the amount or percentage of the accounts receivable you get in advance. Make sure that you know which conditions can affect this number.

Then you also need to determine how much you will pay to the factoring company. How much is the interest per month or per year? And if they are offering credit analysis, invoice management, and collection services, make sure you know what those things will cost you as well.

By choosing the right factoring partner, you can be part of the US manufacturing resurgence and take your manufacturing company to new heights.

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