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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