.........frequently asked questions

Factoring Partners

If I use Factoring what will my customers think? In all probability nothing. Factoring is now so widely used that any stigma once attached to Factoring is history. Businesses use Factoring as a highly valued tool in accomodating growth. Why is there no automated quotation system on this site? At best automated quotes are merely indicative of the possible costs involved, at worst they can be misleading. A factoring broker needs to evauluate your business fully to give an indication as to the likely costs involved and this cannot be done via an automated system. What's the difference between Factoring & Invoice Discounting? With both products your business can access a significant level of funding. Factoring includes a full ledger management service whereas with an Invoice Discounting facility the ledger management is left to you. I've heard Factors can be too hard when collecting money? I've heard instances where Factors have been far too soft on collections. The trick is to find the balance and a good Factor will work with you to ensure your money is collected effectively. A good factor will collect quicker than most businesses would given the resources they have. Collecting a few days quicker will save a lot of money. I only want to factor some of my customers. This is possible dependent upon circumstances. Why bother using a broker? A good broker will have a thorough industry knowledge and access to decision makers within a range of Factoring companies. Factors can be fickle in their approach to new business and some factors will be keen on certain industry sectors where others may fear to tread. A good broker will know current trends in the market and will save a business a great deal of time and consequently money. You are a broker, you'll simply introduce the Factor paying the highest commissions. Factors tend to pay very similar commission levels and simply introducing the highest payer would be ultimately self-defeating. How long does it take to set up a facility? There's no real answer to this question! We have secured finance for businesses in less than a week and seen deals take over a year. However long you need it to take? How do I know you are independent? Factoring brokers, to do their job properly, should be independent in every sense. Some brokers are owned by Factoring companies and others are owned by Insolvency Practices. Always ask the question of your broker. Will I have to personally guarantee the facility? This is very much a negotiating point. Factors sell their requirement for personal guarantees often by saying they are designed to ensure only true & valid invoices are raised. At times this can be disingenuous as if they hold a PG & need to collect technicaly they could call on the PG first i.e before even trying to collect outstanding invoices. A tricky area and independent advice is recommended, certainly before signing any guarantee.