The essence of offering factoring broker services is fairly simple. Help companies sell invoices to gain quick access to cash.
But if you are only concentrating on the “money” side of the business, then you are only focusing on half of the issue.
There are many reasons invoice factoring is beneficial (vs. getting some sort of traditional loan or line of credit).
So why do companies choose to go the Factoring route?
1. Cash Now
We all know that money now is better than money later. A business that is short on cash can not pay it’s own bills let alone take advantage of deals that come their way. With factoring, the business has cash in as little as 48 hours after an invoice is created.
2. No Debt
Not that most businesses can qualify for a bank loan nowadays anyways, but a loan is a debt, plain and simple. Any debt affects the business going forward (and not in a positive way). Factoring is not a debt, nor is it a loan. It is merely the sale of an invoice at a discount.
3. Flexibility
The business decides how much or how little cash it needs. When it comes to Factoring, the business does not need to sell all of its invoices. They can pick and choose which ones make sense – and when they need the money the most.
4. Screening
Instead of “hoping” that their next client pays on time, the Factoring Company can assist with “new client screening.” This can help ensure that clients don’t waste time (or money) agreeing to invoice customers that are not going to pay.
It is important for the Factoring Broker to understand that it is not just about “money.”
Matter of fact, only two of the “reasons” above are actually directly related to money (Cash Now and No Debt). The other two are more related to service (Flexibly and Screening).
If you are only concentrating on the “money” side of the business, then you are only focusing on half of the issue.
Sure, money is a big hot button for someone considering Factoring, but, like most things, money is not really the primary motivation – it is what the money gets you.
Can you make it easier for someone to make payroll? Can you help them take advantage of bulk discounts? Can you help them expand their business and take on bigger clients? Can you help them avoid extending terms to risky customers?
Having money may be the answer to many of those questions, but today’s Factoring broker services are about much more than just money. Service is back. Value is back. Your marketing and prospecting materials should reflect this!
By providing great value to your clients you will be building long lasting relationships that turn into repeat business and referrals.
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