While factoring will increase your cash flow it does not help to build you business credit directly. Factoring companies report to the top credit reporting bureaus monthly, but they only report on your customers unpaid invoices. They do not report on their clients, instead they report on their client’s customers.
Get Business Capital without lowering your Credit Score
If you apply for a business loan or line of credit, the inquiry itself, can have a negative impact on your credit score. In turn, by factoring and having good cash flow you can increase your chances down the line of being able to qualify for additional financing.
Pay your Bills on time – or Early
Many small businesses wait until they are paid, before they pay their bills. This approach often leads to delinquency, and ultimately, a hit to your credit score. Factoring your invoices provides the day to day cash flow needed to pay bills on time.
Increase Your Credibility with Customers and Lenders
Factoring your invoices provides the financial stability you need to increase your credit score and build financial credibility over time. In fact, the regular cash flow factoring provides will help you to increase your score, attract new customers, build credibility, and grow your business.