While the principles of factoring are certainly not new, as some rules for it were set forth as early as 1754 B.C. in the Code of Hammurabi in ancient Mesopotamia, many business owners are still confused about it. Many shy away from using factoring out of ignorance – they simply don’t know enough about it to feel comfortable trying it. But for some, misinformation has colored their judgement and caused them to avoid this financial tool. Let’s dispel some common myths about factoring.
Myth #1: Factoring is Illegal
This myth is likely perpetuated by those unfortunate businesses that have encountered shady factoring companies that use it to take advantage. Invoice factoring is a completely legal and common financial tool for acquiring cash from your outstanding invoices when you need it.
Myth #2: Factoring is a Scam
Similar to the myth above, many see factoring as a scheme or dirty method of doing business, somehow taking advantage of you. Honest non-recourse invoice factoring, like that from JOBE Services, Inc., gets you fast cash from your invoices for a low set fee and no hidden tricks. It is completely ethical, as any financial advisor can affirm.
Myth #3: Factoring is a Loan
Factoring is not a loan. You are not borrowing anything, so nothing must be repaid. Factoring leverages the money you have already earned and allows you to get it sooner. This can be a real benefit when some clients work on 30, 60 or even 90-day invoice payment terms.
Myth #4: Factoring Ruins Your Credit
Factoring does not ruin your credit, or even affect it, because it does not even require a credit check. JOBE Services, Inc. actually relies on the good faith and reliability of your creditors to pay your invoices when we contract with you for invoice factoring. And, with our non-recourse factoring, you still incur no risk, even if they do not pay. Your business credit remains intact and unaffected.
Myth #5: Factoring Requires Long-Term Commitments
Here again, this likely stems from shady factoring companies that seek to lock desperate businesses into a long, binding agreement that does more harm than good. JOBE Services, Inc. does not require long-term contracts for invoice factoring. You can use our service once, occasionally or as part of your regular accounts receivables – you decide how it best serves your needs.
Invoice Factoring from a Reliable Texas Financial Partner
Hundreds of Texas businesses like yours use factoring regularly to keep the cash flowing when they need to cover the costs of materials, repairs, payroll, fuel and other expenses. With JOBE Services, Inc., factoring is on your terms. Contact us today to explore how invoice factoring could benefit your business.