Credit Screening is an Important Benefit to Factoring

Invoice factoring is an important financing tool for firms that are not "bankable". This situation comes about because either they are in a poor financial condition or they are growing at an extremely fast rate. In addition to the fast and consistent funding, there are other benefits to establishing a factoring relationship. One of them that most factors offer is credit screening.

In a fast paced and competitive environment, business owners often don't have the time to analyze the creditworthiness of new customers. They may ask that a credit application be completed, but many don't follow through with checking credit references or running a Dun & Bradstreet report on the prospective client. Factoring companies have the necessary tools at their disposal to ferret out those customers who might pose a credit risk. The benefits to both the factoring company and their customer is enormous. Thousands of dollars in bad debt can be averted and the factor has a better comfort level of advancing funds to the client.

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Kent Harlan, CPA
Ozarks Capital Funding, LLC
www.ocflink.com
kenth@ocflink.com
417.849.7394