Ask the right question to find the right factoring company.

Finding the Right Factoring Company

When it comes to finding a factoring company for your business, it can seem overwhelming. Knowing what to look for is the first step. We’ll discuss five factors that every factoring prospect should know and understand when looking for a factoring company. Once you understand what to look for, we’ll go a step further and provide recommendations and tools to help you find the right factoring company for you.

Five Factors to Consider

First, you need to look at your industry. Factoring companies often serve specific industries and develop an expertise concerning certain industries. Industries such as construction, healthcare, trucking and freight are often served by factoring companies that specialize in these industries. These industries have unique challenges that require experience. You’ll want to search for a factory company that serves your particular industry. Many factoring companies serve industries such as manufacturing, staffing, business services, distribution, and other common business types. If your business falls into one of these more general categories then you can search most factoring companies.

Second, you’ll want to look for factoring company in your area. If you’re business is located in a major city within the United States or Canada, you won’t have any problem finding a factoring company nearby. If your business is located outside of a major city, then you can search for factoring companies in your state. Most states have factoring companies. Your best resource for searching factoring companies by city or state is FactoringClub. FactoringClub is an online directory factoring companies in most major cities and states.

Third, You want to look for a factory company that is genuinely interested in your business. The best way to determine this factor is to call the factoring company and talk to a representative on the phone. When discussing your business to the company’s representative, find if the person listens to you and understands your company’s needs. Gauge the interest level of the person you’re talking to. Often, you can determine within a minute or two if the person is genuine and someone who you would do business with. Also determine weather the person is knowledgeable and transparent about the factoring services that they offer. He or she should be easy to talk to and pleasant to deal with.

Fourth, get an estimate of the factoring costs for your company. Ask the factoring company representative what he or she estimates your factoring cost would be. You will probably need to provide them with the following information about your business:

1. Major customers of your business.
2. Your monthly sales volume or revenues.
3. How long your account receivables are outstanding.

With this information, the factoring company should be able to give you an estimate of what your factoring cost will be. You also want to know exactly how they calculate your factoring cost. Factoring companies determine your factoring caused by one of two methods – flat rate or adjustable rate. Flat rates are typically good for businesses with higher outstanding receivables. Adjustable rates are more difficult to determine but can be good when your outstanding receivables days are lower. Either way, you want to find out how how much it will cost and how they determine your factoring cost.

Finally, you want to ask the factoring company person about additional fees and contract terms in their factoring agreement. Ask them if they charge any fees on top of their factoring rate. Common fees include wire or ACH transfer fees. Some factoring companies charge for credit checks on your customers, however most factoring companies do not charge for this service. Also find out how long you have to stay under contract for their factoring services. Do they require a contract for six months or a year or more, or does the factoring company only require a month to month agreement? Many factoring companies are flexible and you want to work with a factoring company that doesn’t lock you into a long-term contract with hefty cancellation fees.

Mazon Associates Factoring Company

Mazon Associates is a factoring company in the Dallas / Fort Worth area that meets all the criteria that you want in a factoring company. Mazon serves many industries including staffing, manufacturing, business services and many others. The friendly folks at Mazon Associates are professional and take an interest in each of their clients. Mazon has been in business for over 45 years. They know the ins-and-outs of factoring for many types of businesses. Mazon does not charge any extra fees on top of their factoring rates except for wire transfer fees or ACH fees, which is common. One of the best things is Mazon only requires a month-to-month commitment for their factoring services, with no cancellation fee if you decide to leave for whatever reason.

To discuss your business with Mazon Associates, call 800-442-2740 today and ask to talk to Lisa. Lisa is the sales and marketing representative for Mazon Associates. Lisa is friendly and helpful and would love to discuss your particular situation.

About the Author: Rick Hultz is the owner of FactoringClub, a nationwide directory of over 100 factoring companies in North America. Rick is an industry broker and consultant for invoice factoring services.

Factoring services are essential to staffing companies.

Staffing Factoring Fundamentals

The staffing industry is undergoing rapid changes and needs the benefits of invoice factoring and accounts receivable financing. With more companies outsourcing different processes and operations, the number of staffing companies has increased exponentially over the last decade. Companies are more inclined to hire contractors and staffing agencies rather than employing full-time personnel.

Staffing Factoring Eliminates Receivable Delays

The reason staffing factoring is so attractive is because the delay in revenues from services provided exceeds the cost of payroll necessary to pay contractors or employees. Staffing agencies perform work for a customer on an ongoing basis and revenues may not be recognized as cash until receivables are collected. This delay in payment is often 30 days or more, yet staffing companies have to pay their employees or contractors on a weekly or bi-weekly basis.

For example, let’s say you have a staffing company that provides IT services. The staffing company hires employees to perform the services. The staffing company invoices their customer on a monthly basis at the end of each month. The company invoices its customer for work done in the month. The staffing company invoices on terms of net 30 or net 45 which means they have to wait 30 to 45 days after the invoice is submitted to their customer. However, the staffing company is required to pay their employees or contractors weekly. If the employer or staffing company pays their employees weekly, the expenses are accumulated every week while their revenues are delayed. They have to meet 4 pay periods before they can even invoice their customer. In month two, they have to pay their employees 4 more weeks before they can even collect on month one’s invoice. This creates at 2 month gap between revenues and payroll expenses for the staffing company.

Factoring Companies Purchase Invoices

Staffing companies solve this problem by turning to a factoring company. Staffing factoring companies purchase the invoices immediately after they are generated. Upon purchasing the invoice, the factoring company sends funds to the staffing company at typically 80 to 85% of the invoice. The staffing company therefore eliminates the 30 – 45 day collection period from their cash cycle. Instead of waiting 2 months for cash revenue, they only wait one month while services are performed. This is why accounts receivable factoring is so attractive to staffing companies.

Mazon Associates is a factoring company in Dallas, Texas that provides factoring services for all types of staffing businesses. Mazon has been in business for over 45 years and has experience working with the staffing industry. Many factoring companies offer identical services around the country. You can find factoring companies in California, Florida, Georgia, Arizona or any other major city or state by searching FactoringClub, a nationwide directory of over 50 staffing factoring companies across the U.S and Canada.

About the Author: Rick Hultz is the owner of FactoringClub, a nationwide directory of over 100 factoring companies in North America. Rick is an industry broker and consultant for invoice factoring services.

Permian Basing oil and gas factoring

Oil and Gas Factoring in Texas

Oil & Gas Factoring On the Rise Again

As oil prices trend up, so does the need for oil and gas factoring in the Texas Permian Basin. After several years in the doldrums, especially in Texas’s oil-rich Permian Basin, it appears that the oil and gas industry is making a resurgence. Oil prices have rebounded above $50 per barrel in early 2017, from a low of $26 in 2016. Remains of a struggling oil market still exists, but hope is brewing as exploration and drilling investments are surging. This is good new for the oilfield service industry, in particular those companies that serve the large oil and gas producers.

As new and small oilfield service companies begin to service the Permian’s increased oil and gas activity, the need for unconventional financing increases. Banks are typically confined to lending to more established companies with years of profitability and strong financials. Small and growing businesses will find they need the services of a good oil and gas factoring company. Invoice factoring (also referred to as accounts receivable financing) is ideal for growing businesses that need improved cash flow. Oil and gas factoring allows a company to avoid long delays in collecting accounts receivable from their customers. The upsides are improved cash flow, little or no debt, and sustained growth.

Oilfield Factoring Companies

Factoring companies in Texas, Oklahoma and other oilfield states are familiar with the needs of cash hungry businesses. With rising oil prices, demand for oilfield factoring services increases as cash flow crunches increase too. Businesses need cash to fuel the growth in their oilfield business and they turn to factoring companies. Oil and gas factoring companies fund the invoices so businesses don’t have to wait to collect receivables. Usually, invoices can be converted to cash within 24 to 48 hours after it’s been generated. As long as the work or product has been delivered to the customer, the business can sell the fresh invoice to the factoring company.

Mazon Associates is a Dallas factoring company located that has over 40 years experience in the factoring industry. Mazon has a large portfolio of oilfield service companies in the West Texas region. The staff at Mazon is known for it’s friendly, responsive and professional service. They handle invoices for small and large oilfield companies and they know the stringent demands of the oil and gas industry. Within a week or two, your business can significantly improved its cash flow with the help of Mazon Associates’s factoring services.

About the Author: Rick Hultz is the owner of FactoringClub, a nationwide directory of over 100 factoring companies in North America. Rick is an industry broker and consultant for invoice factoring services.