Not all factoring companies are created equal
Some specialize in different industries to offer more customized service, while others don’t limit their services by industry to cater to a wider audience. Some offer higher fees with longer repayment terms, while others offer the converse. All the considerations, from the factoring rates to the advances and contract length, will differ depending on the company you choose.
To ensure you get the best partnership, it’s crucial to ask the right questions and do your due diligence.
hat do the fees look like?
Ask about the fee structure, including any flat/ tiered factoring rates, transfer fees, termination costs, and collection costs.
What is the contract length?
Find out the duration of the contract and whether the company is open to negotiation for a shorter period.F4C believes in helping, not holding you down in long term contracts. After the initial 90 days period, we work on a monthly basis contract.
Does the factor offer any additional services?
Determine what services the company provides beyond factoring, such as back-office support. These value-added benefits can make a big difference in your factoring experience.
Does the factoring company know how your industry works?
Choose a company that deeply understands your industry, as this can greatly impact their ability to support your business.
Is there a minimum invoice volume you are required to factor?
Some factoring companies have a minimum volume of invoices you must submit, while others offer more flexible terms. Be sure to find out if you can choose which invoices you will be factoring as well, or if the factor will require you to submit all of your accounts receivables.
