Choose from types of small business factoring companies

How much you pay for small business factoring, as well as how much your customers know about your business factoring strategy, is up to you. Full-service business factoring companies will be calling your customer for collections, while a confidential accounts receivable factoring company will simply work with your accounting department, collecting in your name but leaving credit decisions to you.

I recommend: Take a look at full-service, or notified, invoice factoring companies including Vital Force Factoring and New Century Financial. Some confidential business factoring companies include Inzap, and BTB Capital, and Bibby Financial Services.  Find more invoice factoring companies in the directory at Business.com.

Keep track of your risk using small business factoring companies

The cost of small business factoring means it is often financing of last resort for most. Some key concepts include recourse and non-recourse business factoring. With recourse business factoring, uncollected invoices are returned in 90 days. Non-recourse financing is more expensive, since the factoring company must eat any losses on invoices they don't collect after 90 days.

I recommend: A good way to hedge your risk is to work with a large financial institution when buying factoring company services. Consider small business factoring from CIT, Wells Fargo, GE Capital or UPS.

Finding business factoring for international trade

Doing more international business means invoices from foreign buyers. It can be hard to collect in reasonable time frames, and language and legal issues can be a problem, too, when doing international business. Invoice factoring companies can make the difference here.

I recommend: Doing all your business in Brazil, or Beijing? Find a local partner through Factors Chain International.

Seek small business factoring designed for your business

Although most business owners rely on small business factoring companies for financing in a pinch, there are industries that subsist on accounts receivable factoring companies and their form of short-term financing. Others concentrate on manufacturing business factoring.

I recommend: The freight business, for instance, relies heavily on small business factoring, from invoice factoring companies like Apex Capital, Trancentral and Factor Loads.