factoring company selection

When reading the factoring company's marketing brochures have you noticed how many say exactly the same thing? After the explanatory preamble most factoring companies will tell you that they offer a fast, flexible solution that includes an unrivalled personal service.

Can that possibly be true? Does a clearing bank offer either a fast, flexible or personal service to the SME sector? If not, why would it's factoring subsidiary differ.

A minority of companies will use the services of one of a handful of specialised factoring and invoice discounting brokers who know more about the industry than anyone else. These brokers have invariably worked at some time for one or more factors and will ensure that they keep up to date with all of the industry happenings.

Factoring Solutions is one such specialist broker with perhaps more years of industry experience than any other. We know which factors are unable to make a New Business decision quickly, where each case has to be approved by a variety of committees and which ones’ despite claiming to operate a “personal service” are actually governed by a strict rule book.

Many potential clients look for the cheapest cost but this can be very misleading as the actual cost of factoring can end up being very different to first anticipated.

Some factors have a credit control service that is so poor that the debtors end up taking twice as long to pay and the cost of factoring will therefore end up significantly higher than first thought.

Another factor might have quoted a slightly higher commission rate but will end up cheaper in practice as their credit control is more effective.

Our services are free as we receive an introductory commission directly from the factor and as almost all pay at about the same rate we have no vested financial interest in choosing one factoring company over the other

Please see next page for details on concerns with debentures and Receivers