Before a company even thinks about bidding on your invoice, they must undergo an invoice financing vetting process—here’s why.
It’s true, selling invoices through invoice financing is an instant ticket to more cash. But what’s arguably more important than the bid itself is the funder behind it. With this in mind, each funder (aka factoring company) that joins Cowdz’s invoice marketplace must undergo a strict review process. Before we dive into the perks of pre-approved bidders, let’s do a quick invoice financing recap.
About Invoice Financing
In essence, the transaction unlocks cash that businesses have tied up in unpaid invoices. You might have also heard it referred to as receivables finance, accounts receivables finance, or invoice factoring. How does it work? Businesses sell their accounts receivable to an external company known as a factor. The factor company advances the invoice value minus a small fee, giving businesses a chance to cover expenses without waiting on their clients or invoice deadline. When clients eventually pay, that payment goes to the factor company.
Unlocking The Best Rates
It sounds simple: the better the funder, the better the rate. But the actual process of sourcing factor companies is far from it. Enter Crowdz’s vetting system, aka the secret sauce to invoice financing success. Every single funder on our platform gets sized up long before they approach you. Here’s why that makes all the difference.
Reason 1: Allows You To Do Minimal Due Diligence
If you don’t have time to spare on your invoices, you’re not going to have time to evaluate every aspect of a potential funder. That’s we do all the gritty work for you before you load up your first. Not only does this ensure you get the most competitive rate, but it serves to streamline the entire factoring experience.
Reason 2: Creates A Safety Net For Your Cash
There seem to be endless options when it comes to factoring companies. Zeroing in on the most secure and reliable companies without insight can be near impossible. Fortunately, selling through our platform offers peace of mind that you’re making a safe choice and getting the highest bid with the lowest risk.
Reason 3: Shines A Stark Light On Fees
It happens all the time; businesses skip over a funder’s fine print (or miss it entirely) only to uncover costly fees down the line. Sneaky expenses like surprise credit checks can add up when you’re selling multiple invoices or an entire ledger. Pre-vetting funders allows us to ensure transparency and help you keep as much money in your pocket as possible.
Reason 4: Keeps Bids And Standards High
Our screening process allows us to connect you with the best factoring companies available. Pitting quality funders against each other also establishes a high level of competitive standards. So when multiple buyers are vying for your invoice, they are incentivized to raise (not lower) the bar.
Reason 5: Expands Your Options
How often and how many invoices you auction off at any given time is entirely up to you. Our pre-vetted marketplace offers a range of factoring companies to accommodate the different approaches you may want to take with your invoices. Whether you’re interested in spot factoring (i.e., only selling one or two invoices) or using Crowdz as a regular source of working capital, there’s a prospective buyer for you.
By Natalia Garduño