Why would you want to use a factoring broker? Your initial reaction might be – I don’t want to! Why should I pay someone to do what I can easily do myself? However, it is important to appreciate that you don’t pay a factoring broker anything and the rates you would obtain from a factor are the same, or perhaps even better! And, with the wide variety of companies offering invoice finance, assistance from a factoring broker will help guide you through the maze of options ensuring you get the best result and save your time. Discussing your position with a knowledgeable broker will help you answer the key questions that should be asked when choosing a factor. A few of them are: - Which factors specialize in your trade or industry and size of business? Different factors specialize in different industries and thus tend to offer rates that are more attractive. Equally, some factors are more interested than others are in offering smaller lines of credit. A broker can advise which factors would be the best match for your business and, hence, offer the best rates and service. What different types of fee structures are available? Fee structures differ from factor to factor. Some may offer what appear to be attractive rates but they may come with higher monthly minimums, making that potentially a more expensive option. Taking into account discount fees, service charges, monthly minimums etc, a broker can help ensure you understand all the details before making a decision. Will the factor offer the flexibility you need? Price is only one element in choosing a factor. Flexibility and service are, also, vital. Your businesses circumstances may change over the period of the factoring agreement. A broker will be able to recommend a factor who would be willing to work with you should things change. How can your company be most effectively presented to a potential factor? Presenting your business in the best possible light will ensure that you receive the most favorable rates. Knowing what key issues may concern a factor is important. Again, a broker’s knowledge and expertise will help you get the best possible rates. These are a few important questions that a broker can help you address when considering invoice finance. The advice will cost you nothing and can help you avoid expensive mistakes in the long terms.
Posted on: Tue, 30 Jul 2013 11:49:25 +0000
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