Whenever you set payment terms for your customers you become the banker. If you set terms, you are extending credit. How do you make your credit decisions? As mentioned previously anyone with no credit will buy lots of something on credit. By creating large invoices for completed work to a customer who has no chance of going to a bank and securing financing you are essentially saying that you are smarter than the average banker.
Part of the factoring process is to make a credit decision on every invoice. We provide this to you as part of our service. It enables you to make an informed decision when deciding whether to give credit terms to a customer. You would be surprised to find that even well known companies have credit issues and are not good account debtors. Too many times we see a company come to us with a very large outstanding invoice that has no chance of being paid.
Do the homework upfront, let us check their credit before giving them terms.