Make sure you understand the fees you will pay for factoring. They typically include the cost of funds and making collections.
When considering factoring, consider the cost vs. gain. It can be expensive, but it can also improve your cash flow and fuel your growth.
Ask your bank or CPA to recommend factors and check their references.
If you decide to factor your receivables, you may be able to take advantage of supplier discounts and build your credit. By buying supplies in larger quantities, you may be eligible for discounts, which could then offset the costs of factoring.
When you factor, you can offer better terms of sale to your customers. Better terms are often even more attractive than better prices.