5 Myths About Factoring Companies

July 13, 2016

If you’ve never worked with a factoring company or have had a bad experience with one, you may have some perceptions about them that aren’t accurate. We are here to help get the facts straight.

5 Myths about Factoring Companies

1. It’s only for companies with bad credit.

Companies with a wide range of credit scores work with factoring companies. It doesn’t matter if you have good credit or less-than-perfect credit, waiting for customer payment is stressful when you need to meet payroll and get caught up on bills. Factoring companies can eliminate this gap by paying you same-day on your invoices.

2. There are a lot of fees associated with factoring.

While some factoring companies have added fees for additional services, when you choose to factor with Scale Funding, there are no additional fees for our back-office support services. Some of these services include accounts-receivable management, collections, credit analysis, risk assessment and treasury.

3. Factoring is only for small companies.

Some factoring companies only fund those with smaller amounts of receivables, but not Scale Funding. We offer monthly volumes from $50,000 all the way up to $20 million.

4. Factoring is only for start-ups.

Both start-ups and well-established companies use factoring companies to improve cash flow. No matter how long you’ve been in business, having a gap in your cash flow due to slow-paying customers makes it difficult to pay your employees, stay caught up on bills or invest in new resources. Factoring provides start-ups and well-established companies the working capital they need to meet business demands.

5. It’s for companies who are failing.

Many of our customers are currently in growth mode. They turn to factoring companies to maintain steady cash flow to invest in their business. Without factoring companies, they’re waiting for 30, 60 or even 90 days for customer payments. Since we’re able to provide same-day cash, they have the funds to accept more contracts, hire more employees and buy more equipment.

Why Choose Scale Funding over Other Factoring Companies

Scale Funding has been providing accounts receivable financing to thousands of U.S. and Canadian companies since 1994. We pride ourselves as being the number-one factoring company in North America. Our staff is known for their reliability, flexibility, industry expertise and award-winning customer service.

We fund companies in a variety of business stages and situations.

• Expanding and growing companies
• Companies with maxed-out lines of credit
• Industries with slow-paying customers
• Start-up companies
• Bank turn-downs
• Those with less-than-perfect credit
• Tax Liens
• Bank workouts
• Bankruptcy

If you have other questions about factoring companies or how you can get started with Scale Funding, contact one of our financial experts today. (800) 707-4845