Four Questions To Ask Before Renewing Your Invoice Finance Contract
Renewing your invoice finance contract is an important decision that can significantly impact your business’s cash flow. As your business grows, it’s essential to assess your different options to ensure they continue meeting your needs.
Here are four questions to ask before renewing your invoice finance contract.
Is invoice financing still the best option for my business? Your business needs may have changed since you first entered your invoice finance contract. Other options, such as loans or lines of credit, might now be better suited to your current situation and where you want to take your business in the future.
Are the current service and terms still suitable for my needs? Even if invoice financing remains the best choice for your business, your current provider may not offer the services and terms you need with where your business is at now. It’s important to review the level of customer service you’ve received. Lenders might also have adjusted their offerings due to market conditions, which could impact the flexibility and terms of your contract. Having an open, transparent conversation with your provider will help you make an informed decision.
Are there any changes to fees and costs? Renewing your invoice finance contract may result in different fees and costs than your initial agreement. Ensure you fully understand the ongoing fees, such as annual, account management, auditing and processing charges. Compare these to your previous contract and the fees offered by other providers to ensure you’re getting the best deal for your business.
Are there any changes to the terms of the contract? Terms and conditions can change when renewing a contract, so it’s important to have a clear understanding of any differences from your previous agreement. Ask the lender about potential penalties for late invoice payments, the ability to submit multiple invoices as collateral and any lock-in periods. Knowing the terms upfront will help you make the best decision for your business.