How to Improve Your Factoring Application
As the owner of a small business, you may find yourself in need of working capital. Traditional bank loans can take weeks or even months to be approved, but you can be approved for an invoice factoring loan in as little as 24 hours, especially if your application is thorough. There is a way for you to improve your factoring application so you are more likely to receive the money you need for your company. Include an executive summary.
An executive summary is a single page of information about your business that quickly and accurately provides the information lenders need to determine whether you are eligible for an invoice loan. Think of it of a condensed version of your business plan. It is important because it allows you to put your best foot forward instead of relying on the lender’s business development offer, who may not pitch your company the way you want it pitched.
The executive summary is especially important for a factoring application if your business is in serious financial trouble. If you have a well-written summary that shows how you plan to turn your company’s finances around, lenders are more likely to approve your application.
The first section of your summary should include information about your personal background. Tell lenders why you opened your business, why you continue to run it, about previous experience you have and about any education or special training you’ve had. You may also want to include information about any future training you intend to have. Next, write a brief history of your company. In addition to the basics, such as when your business opened its doors, add information about awards your company has won or any other special accolades.
Once you’ve established a history of yourself and your company, it’s time to write about the technical parts of the business. Write brief but detailed paragraphs about your company’s target market and its current clients as well as your billing process, how much revenue your business currently brings in and how much you expect it to earn in the future. Include quantifiable information when possible as it looks more professional and makes a lender more likely to take you seriously.
Invoice factoring allows you to get money in as little as 24 hours and it is often easier to be approved because lenders are more willing to work with poor personal credit, businesses that haven’t been in operation long or a lack of collateral. Including an executive summary in your factoring application shows you are serious about your company and its success.