There are many reasons as to why a business would want to change their invoice factoring company. The main reason is through a lack of flexibility when it comes to credit limits against individual customers. It may also be that the factoring company that you are using restricts the overall funding limit. It may also be that they are no good at collecting your debt. Whatever your gripe it is not unusual for a business to want to change a factoring company and hopefully this blog will provide some information as to how to do it.
First things first, most finance companies will sign up a business on factoring for at least a 12 month contract and in some instances we have seen two or even three year contracts. In addition there will be a 3 month notice period. However some of the banks offer one month rolling contracts to customers unsure if they require the service or not. Anyone on a longer contract and feels that the relationship has totally broken down between themselves and the funder may be allowed to leave. This is unusual as most factoring companies don’t allow customers to leave that easily. It may also be possible to do a deal with the exiting factoring ompany and in addition the new factoring company may contribute to the costs of the move. The cost of moving needs to be compared with the amount of additional cash a move could release so you can decide whether a move is worth it or not.
As we have mentioned with previous blogs not all factoring companies can be all things to all men. Bank owned factoring companies operate completely differently to independently owned factoring companies. We tend to find that with factoring that requires that the funder provides credit control the independents are superior to collecting the debt.
Tags: Factoring, invoice factoring
