Invoice Factoring for Small Businesses: Busting Common Myths and Misconceptions

May 11, 2020

Small business owners face many challenges. Collecting monies from clients should not be one of them.

At BP Financing, we offer invoice factoring for small businesses, turning unpaid customer invoices into fast cash. Our company has been providing accounts receivable solutions for small business owners for 15 years. We have the skills and the knowledge to get the upfront cash needed for small businesses to operate smoothly.

There are many myths and misconceptions about invoice factoring. Despite the bad rap it sometimes gets, it is one of the easiest and fastest ways to turn invoices into cash. Let’s take a look at some of the common myths and misconceptions about invoice factoring services for small businesses. 

1. "It creates an unfavorable view of small businesses." 

Some small business owners worry that using invoice factoring reflects negatively on them. Invoice factoring services are actually so common they have become the industry standard for most wholesale, distribution, transportation, retail and manufacturing businesses. Your customers will not think less of you when you use BP Financing for your invoice collection.

2. "It takes a long time to receive payment." 

There may be some truth to this common misconception when it comes to some factoring companies — but BP Financing is not one of those. We assume the burden of collecting and we will provide you with the option of receiving 95 percent of the total upfront so there is less waiting. You can also choose to wait to receive your money following the collection process. In this case, we collect on the bill, deduct our fees, and turn over the remaining amount to you.

3. "It takes control away from small businesses." 

There can be some truth to this if you choose to work with a collection company that is not reputable. At BP Financing, we do not remove access to or control of your customers. We also do not constantly harass them for payment. We treat your customers with the same courtesy and respect we show to our clients.

4. "It is only for small businesses with cash flow issues." 

False. Savvy small business owners know the value of using invoice factoring services. It is the most efficient and effective way to way to manage your cash flow. When used correctly and through a reputable company like BP Financing, invoice factoring can expand your business potential, freeing up valuable time that otherwise would be spent chasing invoices. From small businesses to rapidly growing startup companies, invoice factoring is a wise investment.

5. "It lacks payback transparency." 

This may be true of some invoice factoring services, but not with us. At BP Financing, we provide full transparency to our clients upfront before they ever agree to use our services. There are no surprises when you partner with us for invoice collection.

6. "It is expensive." 

Yes, there is a fee for using invoice factoring services, but it is a sensible option when using a reputable company for the work. Some small business owners may be tempted to secure a small business loan instead of opting to use an invoice factoring service. While a bank loan may be less expensive in the short term, the process takes longer and the overall interest due is higher than with invoice factoring.

Get Started Today

Do you still have questions about invoice factoring? Contact us at BP Financing today. Our team of experts will work with you to answer your questions and to determine the best plan of action for you.