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What is a factoring broker?

Factoring broker, factoring company, Manchester, Cheshire, Lancashire, UK
A reputable and well established factoring broker will undoubtedly add value when it comes to choosing the right factoring and invoice discounting company for your business. The good news is that it won’t cost you a penny. Unlike asset finance whereby commission is added into the deal, the factoring or invoice discounting company will pay the factoring broker out of the income they would normally charge.

Will I save money?

The process should save you time and money as you will be introduced to the most appropriate funders from the start.

There are many different factors that need to be taken into account when choosing the right finance company and hopefully this article will go some of the way to explaining the process a factoring broker will go through in introducing the most appropriate funder.

At the end of the process you should have the name of 2 or 3 factoring companies that will be best suited to your needs. Anymore and the finance companies won’t take you seriously because they think you will be wasting their time.

Identifying if your business requires factoring or invoice discounting is the biggest factor. Certain funders are excellent at factoring and not so good at invoice discounting and vice versa. Indeed some funders don’t even provide one or the other.

The length of time your business has been trading must also be taken into consideration. Banks won’t normally touch a business trading less than 3 years.

A business which has been struggling might want to keep away from a high street bank which do not seem to be as flexible and accommodating as specialist provider.

Depending upon your location, certain funders have a strong local presence in some areas but not others.

In addition the quality and number of your debtors should also be assessed together with your sales contracts.

Factoring guide

 

To view our guide to Factoring please see here

 

 

See also;

Invoice discounting

Invoice factoring

Trade Finance

Bad debt protection

Cash flow finance

what is a good factoring company?