Credit Check Services from a Factoring Company

Invoice factoring is predicated on client customer credit checks. Credit checks are done on all customers whose invoices are offered for factoring. Credit checks are essential for factoring companies to avoid financial risk from their client’s customers defaulting on payment. The following are five key benefits to businesses by factoring company credit checks.

The immediate access to cash and factoring line of credit offered by factoring company credit checks offers businesses secure cash flow management. If the factoring company has assessed a business’s customer as low risk, the percentage of the invoice that can be immediately paid out may be greater – up to 90%. A low-risk customer base can provide a growing business with improved cash flow when it’s most needed.

The Professional credit analysis provided by factoring companies amounts to a cost-effective and valuable third-party financial management service. Risky customers can be immediately identified, helping businesses avoid debt on accounts receivables. This factoring service can also help a business build a risk-free or low-risk customer base over time.

Credit risk management from factoring companies also takes that responsibility off the business itself. This can be very useful for small businesses with less capacity to conduct timely credit checks themselves. Credit checks by factoring companies free up time for businesses to concentrate on doing business and can streamline the process of taking on new customers.

Customized credit limits on factoring lines of credit are based on the credit history of that business’s customers. This can help businesses manage their factoring strategy and enjoy the benefits of improved cash flow with confidence.

Not all factoring companies offer the same services, be sure to compare industry-specific factors in your area using our Factoring Guide. 

If you’re looking for credit check services from a factoring company, contact us for a factoring rate quote today.