Should I Use Factoring Or P.O. Financing? It all depends on your situation and what type of receivables you're holding. If you are trying to fill a specific, large order, you probably want P.O. financing. If you want to incrementally grow your business and need money for a variety of reasons, factoring is probably best. The decision really comes down to whether you have outstanding accounts receivables or purchase orders. Figure out what your operating capital needs are and we can help you evaluate the best path.
What does factoring cost? The fee varies by the amount of time it takes to collect the receivables. Typically, the fee ranges from 2-5% of the invoice's face value. Prairie doesn't charge monthly fees, so you only pay when you get cash.
Does Prairie try to help my business, or just give me cash? Prairie's goal is to advance your business. As part of the factoring fee, Prairie provides credit checks, customer aging and performance reports, record keeping and collection advice, and assistance. These services collaboratively reduce your risk of bad debt.
How does factoring affect my credit rating? When you factor your invoices, you have cash to pay off debts or make investments. You can pay suppliers and creditors on time. This will help your credit and make you eligible for better discounts and terms from suppliers, and eventually make you a desirable customer of that bank that can't help you today!
Can Prairie manage our accounts receivable? Absolutely. We understand all the ins and outs of managing a business's finances. It's an important part of our service to make factoring work for you.
Additionally, even if your firm didn't need factoring, you could benefit from outsourcing your Accounts Receivable function. Usually, you will save money by letting professionals like us responsibly handle your accounts receivable. If you think there's a possibility that your finances are not being managed effectively, it's probably the case. Give us a call to see what we can do.