Not all business loans or lenders are equal. They range from the dedicated partner, to the number pushers, and some are downright fraudulent. When you’re looking for business financing ask yourself this question.
Is Accounts Receivable Financing Right for My Business?
If your customers are other businesses, you understand the frustration of the gaps between when you deliver your product or render service, when your invoice is sent, and when you are finally paid.
Providing your product or service cost money, so does general operations of your business. Regardless of how prompt your customers are at paying you, the cost of doing business generally does not change. Employees must be paid, materials purchased and bills paid.….. And bills don’t wait because you are awaiting payments.
When a customer is slow paying, a dispute arises, or any number of other things occur to delay payment, your business’s cash flow is severely impacted, and your day-to-day operations are threatened. Luckily, you have a financial solution—an accounts receivable loan. Borrow against an invoice or your entire accounts receivable aging which will eventually be repaid.
Is This Lender Right for My Business?
You decide that you’re ready for accounts receivable financing to help you through the crunch, but with so many lenders providing these loans, how do you know which lender to choose , and what to look out for when selecting a reputable financial institution.
A savvy business owner is always cautious. It probably comes as no surprise that there are unscrupulous lenders who are after nothing more than to tie you to a contract and squeeze you for money. Here are some specific things to watch for when getting an accounts receivable loan.
Upfront or Hidden Fees
Be wary if the lender asks you for fees before you’ve even filled out the application. Also read the proposal letter or term sheet carefully . Ensure that the conditions, terms and fees are laid out plainly before you sign a contract. If there is any hesitation by the lender to explain the terms, or if you feel that you are being pushed to sign without fully knowing all the terms, this is probably a sign that this lender is not right for you.
Sudden Change in Terms or Fees
If you are ready to sign on the line, then you are told that there are a few changes in the terms or the fees, walk away. Reputable lenders are transparent and open about all details and will never trick you into additional fees or a longer-term contract.
Missing Contact Information
It’s as simple as a phone number. If the lender you are considering has a fancy website, a legitimate-sounding name, but only has an email contact, then something is very wrong. You should always be able to reach your lending institution by phone. Pick up the phone, call them. Ask directed questions and accept nothing less than knowledgeable answers. If they avoid questions or tell you that someone will contact you with the answers, this is a good indicator that the lender may not be legitimate.
From time-to-time every business has an unsatisfied customer who feels that they will exact revenge by leaving a bad review. But, if the lender you are considering has a series of bad reviews over a year or more timeframe, you should keep looking. No matter how great their offer seems, or how well they have marketed themselves, listen to their previous customers and take heed.
Naturally, sales are required for any business to grow and thrive. However, if you feel overwhelmed by the sales pitch or feel pressured into signing a contract, you need to take a second look, especially if you are being asked to lock into a contract for a specified period of time. Even if you are in a time crunch and working capital is tight, be sure to be comfortable with the lender and the team that you will be working with for your financing needs before you move forward. The immediate sense of urgency has caused many hard-working business owners to suffer. Step away from pressure sales and take a little time to look again for a good lender who is approachable and has your best interests in mind. It will make a difference in the long run.
Why Allied Financial is the Right Choice for Your Business
You’ve decided that an accounts receivable loan is right for your business, now you need the right lender. When you finance with us, here is what you get.
- Early in the process you’ll get face-to-face meetings with knowledgeable representatives.
- Fast, efficient loan review You will be kept informed throughout the process.
- Our team will structure a borrowing program to meet your company’s financing requirements.
- You will receive an Expression of Interest letter customized and tailored to your needs and business.
- Most importantly, you will have a partner whose desire is to help your business grow and prosper.
Call us today. Let us help you get the financing you need. 770-730-0101