WHAT IS A NOTICE OF ASSIGNMENT (NOA)?
If your company is considering accounts receivable factoring, a document known as a "Notice of Assignment" will inform your customers that going forward, you will be working with a factoring company or a bank, who will be managing and collecting your accounts receivable.
You may have concerns about what your customers might think, but you should not be concerned; most businesses are familiar with factoring, and they may be factoring as well.
Factoring has been around for a long time—in fact, for over 4000 years—and has increased significantly and will continue to increase as a result of expanding global markets and the demand for credit.
According to a Global Factoring Market report, analysts predict that factoring will continue to grow by over 10% annually.
EXTENDING CREDIT TO YOUR CUSTOMERS
To remain competitive, most businesses must extend credit terms to their customers, sometimes up to 90 days or longer. What would happen to your cash flow? It can certainly cause problems for your company. However, factoring can solve that concern.
Factoring has become a necessary financial solution for companies to expand and grow their market, as well as maintain a strong cash flow. It is so popular that many of your customers may also be factoring.
Some of your customers may have already contacted you, demanding longer terms on your invoices to help their business, so factoring not only helps your company with an ongoing supply of capital based on sales but also helps your customers by extending longer terms, which ultimately helps their business grow as well.
GO AFTER MORE BUSINESS
Once you are set up with a reliable factoring company, you can go after those bigger contracts, offer longer terms, and maintain a strong cash flow by factoring those invoices.
An NOA is a win-win for you and your customers. For additional information about factoring, please contact us at any time.
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