There are literally hundreds of factoring companies to choose from in the modern economy. Each of these companies presents its own set of benefits and advantages to using their company. However, there are a few tips and tricks that can be learned before setting out to find financing companies that will best suit individual needs.

The first aspect to consider when choosing appropriate factoring companies is that there are no hidden fees. Many companies promise great return only to discover that there are invoice fees, charge back fees and other fees that the financing companies are not upfront about. Ask and inquire about hidden fees such as phone calls or any other fees that may not have been mentioned in the company literature. Most reputable factoring companies incorporate the fees for invoices, and other expenses in the percentage that they offer to buy invoices.

That effectively introduces the percentage of which many highly regarded financing companies offer. Be cautious of factoring companies that offer a very high advance rate on the factoring invoices. These are the companies that typically have hidden fees so that when it comes time to get the actual finances, the rate becomes much lower. Generally, a good solid rate for financing companies is around 80%. It may seem unattractive compared to a similar company offering 90% but after hidden fees the percentage usually falls much below 80%. Factoring companies that offer around 80% advance for factoring invoices usually don't have hidden fees. If they offer 80%, that translates to an actual 80% advance on all factoring invoices that are presented.

Keep in mind that financing companies are essentially taking over the business's accounts receivables. With that said, factoring companies that offer a professional collections department would be an essential asset. The benefits to finding financing companies that offer this service characteristically speed up the process inherently. The manpower is available to collect the debts from the factored invoices in a professional and timely manner. It also avoids the much dreaded charge back fees when the invoices are not paid after a certain period of time allotted in the initial factoring contract.

Many factoring companies do not assume risk against those debtors that may or may not pay their invoice. A solid company with a reputable factoring history will assume the credit risk associated with invoice factoring. That means that if the client doesn't pay, the financing companies take that risk instead of the individual business, which is a huge relief for any prospering business.

Factoring companies should be selected following basic ground rules to ensure a successful factoring experience. Select the financing companies according to the history that they have. Any good company will have a proven track record to accompany their claims and should be easily accessible. Factoring companies that understand the needs of any growing business is key to factoring success.

Seasons that revolve around the construction industry have been a source of concern for contractors and sub contractors since the beginning of time. Construction factoring offers these companies and individuals a feasible solution to gain working capital immediately. Many companies that specialize in construction factoring have even gone as far as to completely revamp the system to cater to the construction industry's specific financial needs. Where banks are skeptical to lend to construction companies, construction factoring generates more than a billion dollars of business a year by catering to them.

With that said, its easy to see the attractive aspect of offering construction factoring to these construction contractors and sub contractors. Typically, traditional lending institutions consider construction to be a risky business. This goes against the very nature of these financial institutions because they are taught to only invest in safe business prospects. Construction is a tough business and unless a contractor can present proof over several years of positive cash flow, traditional lending companies will not even look at the prospective client.

Construction factoring companies acknowledge and understand the intricate workings of the construction industry. One of the biggest factors to financial hardships revolving around the construction industry is the time delays and the cost overruns. Plans change, weather factors and determines working days and it is a rare occasion when a contractor says the job is done and far under budget. The construction factoring companies effectively foresee these situations and offer a viable financial solution. The construction factoring company purchases the accounts receivable invoices for a very fair factoring fee. The contractor is presented with the cash that enables the purchase of materials to continue ongoing work on any given project as well as paying the employees that are expecting their weekly salaries.

Most building contractors don't have the resources financially or physically to take on more than a few projects at one time. The materials are expensive and the labor is expensive which prohibits the construction industry in a way that doesn't affect most other industries. It isn't unheard of that a small construction company has gone out of business because a project was delayed or various other risks associated with the construction industry. Construction factoring companies are designed to deal with this type of industry and often come from a construction background.

Construction factoring can't change the very nature of the construction industry but they can provide the financial means to continue growing and expanding. Construction factoring companies are said to have higher fees than other industry factoring companies. This is all part of the ebb and flow of the construction industry and the understanding of how this industry operates. Construction factoring companies typically withhold a certain amount to cover any disputes around 25-30%. This may seem like a high rate but most construction contractors are more than happy to pay that price for the peace of mind that they are afforded.