This is the first in a series of articles about what you really need to know before you pick a factoring company. Personal Credit, Does it matter?
While most AR finance companies will advertise that your personal credit does not make any difference, that is not always completely true. Chances are factors will obtain a credit report from one of the major credit scoring agencies on you.
There are two reasons factors are concerned with your personal credit.
- Personal Guaranty – Most factoring firms will require you to personally guaranty the advances when you sell invoices. When they are deciding to approve a new factoring facility for you, they want to know that if push comes to shove, do you have the personal finances to help secure the advances they make. Just because you have poor credit history doesn’t necessarily mean you won’t be approved for capital factoring but it is definitely a part of the decision making process.
- Fraud – The biggest risk to a factoring company is fraud. Analyzing your personal credit is one of the ways for commercial finance factoring companies to protect themselves from people whose only intention is to commit deliberate fraud.
For more useful information on loans and receivables please subscribe to our blog and follow us on facebook and twitter using the tools above and to the right on this page.
To get started on a facility with fast AR funding, click on the button below. There are no up-front fees or long-term obligations.
