CARDS ON THE TABLE
Why Receivables Financing Scares Some Businesses—and Why It Shouldn’t
There can be so many great advantages to receivables financing for cash flow and operations that you might wonder, why don’t more businesses use it?
The people at Alpine Ridge have been helping businesses make the most of their receivables for a long time, and we can confidently answer that question: The reason many more businesses don’t use receivables financing (also called “invoice factoring”) is that they worry it could upset their customers, and even make their customers think less of them.
We understand that concern. And the truth is, if done poorly, factoring can upset certain customers.
We understand that concern. And the truth is, if done poorly, factoring can upset certain customers.
That’s why at Alpine Ridge, we have developed processes and options that not only create a good experience for our customer (your business), but also create a good experience for our customer’s customer—the people that your business serves.
In fact, based on our attention to the quality of your customers’ experience when you begin using us and throughout the relationship, we believe that Alpine Ridge is the most customer-centric factoring service in the country.
The Elephant in the Room:
Your Customers
Most factoring companies angling for your business just want you to focus on the idea that they will pay you for your receivables—and they avoid or minimize the idea that in order to do that, they will need to notify your customers and establish a bill-pay relationship with them. (Remember that with factoring, after you’ve sold a receivable and received an immediate payment on it, it will be the factoring company that receives bill payments from your customer.)
Most factoring companies angling for your business just want you to focus on the idea that they will pay you for your receivables—and they avoid or minimize the idea that in order to do that, they will need to notify your customers and establish a bill-pay relationship with them. (Remember that with factoring, after you’ve sold a receivable and received an immediate payment on it, it will be the factoring company that receives bill payments from your customer.)
Here’s what we believe: The way many other factoring companies avoid bringing up the need to notify your customers is not very respectful to you as a business owner or manager, and we’re not sure those companies have earned your consideration.
Here’s what we believe: The way many other factoring companies avoid bringing up the need to notify your customers is not very respectful to you as a business owner or manager, and we’re not sure those companies have earned your consideration.
In our view, what is respectful is making sure you understand how factoring works, including the idea that your customers will be notified that their payments need to be made to your strategic partner—and then creating a process in which the important relationship between you and your customers is respected and preserved.
That’s what we do, and that’s one reason Alpine Ridge Funding is not only a receivables financing company, but also a receivables logistics service. We handle your receivables using efficient processes and with a 360-degree eye toward smoothness and effectiveness for all parties.
In our view, what is respectful is making sure you understand how factoring works, including the idea that your customers will be notified that their payments need to be made to your strategic partner—and then creating a process in which the important relationship between you and your customers is respected and preserved.
That’s what we do, and that’s one reason Alpine Ridge Funding is not only a receivables financing company, but also a receivables logistics service. We handle your receivables using efficient processes and with a 360-degree eye toward smoothness and effectiveness for all parties.
The way that your customers are notified that they should send bill payments to your billing partner can take different forms, and it can even be different from one customer to another. There are many ways we can work
That’s what we do, and that’s one reason Alpine Ridge Funding is not only a receivables financing company, but also a receivables logistics service. We handle your receivables using efficient processes and with a 360-degree eye toward smoothness and effectiveness for all parties.
That’s what we do, and that’s one reason Alpine Ridge Funding is not only a receivables financing company, but also a receivables logistics service. We handle your receivables using efficient processes and with a 360-degree eye toward smoothness and effectiveness for all parties.
The way that your customers are notified that they should send bill payments to your billing partner can take different forms, and it can even be different from one customer to another. There are many ways we can work with you, depending on your business’s situation, to ensure that the transition for your customers in sending their payments to Alpine Ridge is smooth, well understood, and reflects well on your company. Options may include continuity in the branding of communications to your customers; the creation of a customized, positively-worded letter for you to send out explaining the change; and even having someone from your team join someone from our team to call your customers so that relationships are preserved.
with you, depending on your business’s situation, to ensure that the transition for your customers in sending their payments to Alpine Ridge is smooth, well understood, and reflects well on your company. Options may include continuity in the branding of communications to your customers; the creation of a customized, positively-worded letter for you to send out explaining the change; and even having someone from your team join someone from our team to call your customers so that relationships are preserved.
The way that your customers are notified that they should send bill payments to your billing partner can take different forms, and it can even be different from one customer to another. There are many ways we can work with you, depending on your business’s situation, to ensure that the transition for your customers in sending their payments to Alpine Ridge is smooth, well understood, and reflects well on your company. Options may include continuity in the branding of communications to your customers; the creation of a customized, positively-worded letter for you to send out explaining the change; and even having someone from your team join someone from our team to call your customers so that relationships are preserved.
Facility Customization
- Alpine Ridge clients can include receivables from only some customers or all customers depending on volume of liquidity needed.
- We can partner with you and a key customer of yours to arrive at a billing and funding solution that encourages your relationship with that customer to thrive and grow.
- We can work with your bank, if you wish, to structure receivables financing that meets bank approval and works well alongside your bank line.
- Special terms for businesses that are on the cusp of being able to access traditional financing from banks—we can provide the speed and flexibility of receivables factoring at a cost closer to bank costs.
- Many other options!
Then the Good Stuff Happens
In our experience, when it’s done right, invoice factoring can improve a business’s standing in the eyes of its customers and can help grow the size of their accounts, as well.
One reason is that using a company like Alpine Ridge is a sign of professionalism, showing that you have expert, dedicated professionals handling the credit, billing, and receivables end of your business, just as you have expert professionals handling other aspects.
One reason is that using a company like Alpine Ridge is a sign of professionalism, showing that you have expert, dedicated professionals handling the credit, billing, and receivables end of your business, just as you have expert professionals handling other aspects.
Additionally, for some of your customers, a good payment record during our relationship with you may result in Alpine Ridge being able to fund more credit to these customers than your company might have been able to extend otherwise.
That’s because our service includes (at no extra charge) assessing the creditworthiness of your new customers and prequalifying them so you don’t get overextended…and identifying existing customers of yours that are good candidates for doing even more business with you and for additional credit.
Additionally, for some of your customers, a good payment record during our relationship with you may result in Alpine Ridge being able to fund more credit to these customers than your company might have been able to extend otherwise.
While the immediate payments on your receivables are great, here’s the icing on the cake in using Alpine Ridge Funding: Because we also provide credit analysis of your customers, your business’s financial performance may improve, and your cost of financing may be reduced.
You come out stronger—and that’s our goal for our clients.
That’s because our service includes (at no extra charge) assessing the creditworthiness of your new customers and prequalifying them so you don’t get overextended…and identifying existing customers of yours that are good candidates for doing even more business with you and for additional credit.
While the immediate payments on your receivables are great, here’s the icing on the cake in using Alpine Ridge Funding: Because we also provide credit analysis of your customers, your business’s financial performance may improve, and your cost of financing may be reduced.
You come out stronger—and that’s our goal for our clients.
“We know that the receivables financing we provide feels like a big step for many businesses. But pretty quickly, the companies that use us see that we act in many ways more like a partner than a vendor—and they sure appreciate the speed and reliability of the cash flow.
Meanwhile, our clients’ customers absolutely respect them for having a highly professional process in place for credit, billing, and receivables management.
“We know that the receivables financing we provide feels like a big step for many businesses. But pretty quickly, the companies that use us see that we act in many ways more like a partner than a vendor—and they sure appreciate the speed and reliability of the cash flow. Meanwhile, our clients’ customers absolutely respect them for having a highly professional process in place for credit, billing, and receivables management.
In fact, it’s the customers who wish you weren’t so good at receivables management that we’d wonder about!”
David Fortner
VP, Alpine Ridge Funding
30-year veteran of receivables financing