5 Ways to reduce your factoring charges.
- SWITCH FUNDER
- Invoice Financiers rates vary considerably and significant cost reductions can be achieved
- An independent broker will help with this by suggesting no more than 3 alternatives. Talking to more than 3 will lead to ‘factor fatigue’ and incur great levels of duplication (& associated cost)
- Invoice Financiers do not like losing clients and they will reduce rates to prevent client loss.
- If you have been with your funder over a year formally review rates.
- CONSIDER ALTERNATIVE INVOICE FINANCE OPTIONS
- The invoice finance market continues to evolve and many options are now available, there’s single invoice finance, internet auction platforms, selected debtor finance, optional credit insurance and many other options.
- FOLLOW THE RULES
- As with many business models in other sectors, miscellaneous, or other, sometimes hidden charges, can be evident.
- CONSIDER OTHER FUNDING SOURCES
- Away from conventional invoice finance and banking there are other funding sources that could replace or improve upon an invoice finance line. These include peer to peer or crowd finance as well as private equity.
Invoice finance costs can be reduced in many circumstances with those savings directly helping your business. An independent broker can help but they must:-
- Have invoice finance experience.
- Be independent, they shouldn’t be making introductions simply because of a referral relationship
They will be able to :-
- Understand your business and your finance needs
- Know which financier will be most likely to support
- Assist, if necessary with any aspect of the discussion.
- Source the most suited facility without the need for excess duplication