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Beware of refactoring charges

The most common recourse period offered by a factoring company is 90 days. If at the end of 90 days and your customer hasn’t paid their invoice many factoring companies charge a refactoring charge which can be anything from 0 .25% to 2% of the outstanding invoice. Ouch! ┬áMost factoring companies will not even mention this but leave it the small print. Call me cynical but there seems to be an incentive not to collect your invoices in time. If you are switching to factoring make sure that you choose business which as a good reputation and has the ability to collect payments quickly and efficiently. A tip small independents tend to be better at this than high street banks.

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