Blog articles discussing factoring companies, factoring loans, invoice factoring and all things related.
I pondered this question last night and came up with a few things and a few realizations. When we are referring our clients to a factoring company both our client and I have the same expectations. We expect the factor to be responsive, flexible, solutions focused, easy to work with and efficient.
Our clients come to us in search of financing and sometimes those needs can be met with factoring. Having been in the factoring industry since the early 90’s (taking a 7-year hiatus to be involved in commercial real estate finance) we have many factoring companies and contacts we trust in the industry. They all met the criteria and we feel comfortable placing our endorsement on them when referring our clients.
However, when a factoring company approaches us that we haven’t worked with before, we need to be discerning. Are they responsive to us as brokers in the industry? Are their underwriting guidelines similar to a bank while charging factor rates? Are they pleasant to deal with? What kind of capital backing do they have? Will they support our client with the flexible lending they are looking for and great customer service?
These questions are the same questions our clients have. As brokers, our strength and value is saving the client’s valuable time. Not all factoring companies are created the same and we need to show the client that we are saving them time and hassle by going to the best option for their business.
For example, there is a factor we used in the past (to remain nameless) that we no longer use for what some may consider to be a minor detail. The minor annoyance we have – they cut checks instead of wiring the monthly commissions. A nit-picky thing to be concerned with some may say. However, isn’t this a minor change they could make to ensure that their client is happy? Are they showing the broker community that they are flexible when they don’t want to make this change for their client’s convenience? It raises the question, “how flexible will they be with the clients we refer them?”
We have spoken numerous times to the sales person that calls on us about this and he says that, “credit doesn’t want to do that.” It’s their call, but not the kind of flexibility we are looking to introduce our clients to. From our perspective, this is a minor change that could be made and they would be on a par with what the other factors are doing in the industry. We don’t feel we should be dealing with checks anymore than pagers in the present day.
So how flexible are your group of factoring partners? From our perspective, we can’t refer clients to a factor that is inflexible with us.
What is the group’s experience? We would like to hear from you.
To your success!
Patrick Zazueta | Founder
Huntington Coast Capital, Inc.