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If you have a factoring quote what are the things that you should look out for?

  • Prepayment – this is often quoted as up to and it makes it hard to compare offers unless you have actually had a survey done by a lender.
  • Service fee – look at both the % service fee and minimum fee.
  • Discounting Fee – remember to look at the margin, understand which base rate is being used and importantly what minimum base rate is being used.
  • Audit fees – what are the fees and how many audits a year are required?
  • Dispursements – please understand what they are and also when they are charged. Will they effect you?
  • Take on fee – remember that the service fee is applied to the whole ledger upon commencement so if you are transferring from another lender you could be paying twice.
  • Set Up fee and legal documentation fee – please check these.
  • Understand any early termination fees or collect out fees that can be applied – understand both what they are and when they can be applied.

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