Invoice factoring companies come in a variety of forms. The biggest tend to be either directly from banks or subsidiaries of banks. Others are parts of major financial institutions and others are independent.
Different factors will take a different view on what types of business they want to get involved with and what they perceive as risk. It is therefore worth looking around if you get initially turned down.
In addition to the factoring companies themselves, there are numerous factoring brokers which usually get paid by the factoring companies through commission.
Questions you need to ask of an invoice factoring company
- What are the procedures ?
- What rates will you pay ?
- How much money can be leveraged against your debt book ?
- What is the invoice factoring company’s record on collecting money quickly and efficiently ?
- Is the invoice factoring company going to maintain good relations with your clients ?
- Is the factoring company experienced in your market sector ?
- And VERY importantly, what period of notice do you need to give the invoice factoring company ?