Factoring Blog - For Small Businesses

Tom Nort, the CEO here at Facteon (pictured right), was recently interviewed on Internet radio. It’s 24 minutes in which Tom discusses factoring in a conversational interview format.

Tom notes that speed is probably the number one advantage to factoring. You may think that if your customers pay invoices slowly because their internal payables processes drag on, you have little choice.  But by factoring the money comes in quickly — in hours or days, instead of weeks or months.  You don’t even have to change your business in order to get paid faster.  

An overlooked benefit of factoring is that it takes the place of infrastructure for an accounts receivables department.  As he points out, many small businesses don’t have the staff or systems to adequately track receivables and stay on top of them.  A factoring company can operate as an outsourced receivables department, collecting your receivables in exchange for a fee. 

A typical factoring client is a company a few years old.  The client company may be run by someone who worked for a larger company and went out on their own.  Tom notes in the show, “They are very good at what they do, but don’t necessarily have the resources or infrastructure to stay on top of receivables.”  Engineering firms, software developers, small manufacturers, construction firms — these are just some of the typical companies that use factoring.

He also points out an advantage over a traditional lender:  that factoring does not involve doing a credit analysis on your business.  The focus is on the credit-worthiness of your customer, not on your personal credit as an entrepreneur. 

Tom says many entrepreneurs have suffered dings to their personal credit simply due to starting a business and the cash pressures it imposes.  That’s a fact of life of being an entrepreneur. With factoring, these entrepreneurial dings to your personal credit don’t disqualify you from getting funding.

Tom also mentioned that Facteon is different from other factoring companies in that it publishes its rate schedule right on the Web.   Anyone can see it and know in advance what factoring will cost, and make an informed decision. 

Tom also talked a little about his own experience — that he started a business and would come up short when he has payroll to make. Facteon has now been in business 8 years.

It’s a relaxed and informational interview — definitely worth listening to.

You can listen to Tom Nort’s interview by clicking on this MP3 link.  Or you can head over to the radio show website where there is a write-up and a flash player to listen.

This entry was posted on Thursday, March 27th, 2008 at 9:57 am and is filed under Factoring. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.