What questions should I ask a client to determine if the client is a candidate for Factoring?
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What questions should I ask a client to determine if the client is a candidate for Factoring?

What questions should I ask a client to determine if the client is a candidate for Factoring?

That is easy.

You know your client.

Is the client looking for capital?

Ask these questions:

  1. If the client had the money in cash from receivables right now, would the client take on new jobs?
  2. If the client had the money in cash from receivables right now, could the client get some suppliers paid?
  3. If the client had the money in cash from receivables right now, would the client use it to meet payroll?
  4. If the client had the money in cash from receivables right now, could the client take care of the IRS debt?
  5. If the client had the money in cash from receivables right now, would the client be able to focus on their core business rather than on collections and payables?
  6. If the client had the money in cash from receivables right now, could the client avoid giving up equity in order to grow the business?
  7. If the client had the money in cash from receivables right now, would the client buy that competitor of theirs who is supposedly for sale?

If the answer is yes and especially if the client smiled and answered yes, the client just might be a candidate for factoring. At least give it some thought.

Eric Standlee

?? Alternative Funding Expert | Structuring Innovative Solutions for Growth Companies (35 years' experience)

2 年

Imagine a startup fabrication shop doing such a good job on an aerospace prototyping project they will get a huge order they cannot afford without working capital but they are less than a year old and don't qualify for bank lines yet.

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Eric Standlee

?? Alternative Funding Expert | Structuring Innovative Solutions for Growth Companies (35 years' experience)

2 年

Imagine a very successful billionaire oilfield services company owner needing working capital to keep taking on new work but not wanting to have to pay penalties to move money in long-term investments.

Eric Standlee

?? Alternative Funding Expert | Structuring Innovative Solutions for Growth Companies (35 years' experience)

2 年

Imagine four partners in a 20 year old chemical company having to buy out the estate of one of the partners.

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Eric Standlee

?? Alternative Funding Expert | Structuring Innovative Solutions for Growth Companies (35 years' experience)

2 年

Imagine a truss manufacturing company where the owner wants to not have debt when he sells or when she passes the company to her kids.

Eric Standlee

?? Alternative Funding Expert | Structuring Innovative Solutions for Growth Companies (35 years' experience)

2 年

Imagine a logistics company pulling crude for one large O&G customer doubling deliveries month over month.

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