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The best factoring company for your business will depend on the unique characteristics of your business and importantly on your own requirement.

The main aspect of any factoring companies proposition is the structure of their facility, service levels and pricing.

Structure of a facility

It is imperative that the facility is structured to meet the needs of your business but some lenders may not be able to structure a facility to meet your needs. Some lenders have a credit policy that will not allow them to finance any debtor that exceeds over 25% of your total ledger. If you have one large customer that accounts for a large proportion of your sales ledger or all of your sales ledger such a lender would prove to be restrictive. You will need a lender that does not have such stringent criteria when it comes to concentration limits. Another example can be exports. Some lenders will simply not finance export sales so if you have export sales or are looking at export sales than you need to consider a lender that can finance those sales. Smart Factoring Quotes understand the capabilities and requirements of each lender in the market.

Service Levels

These are very hard to gauge prior to commencing a facility and unfortunately at that stage you are typically contracted to a 12 month agreement so in many ways it is too late. Again the team at Smart Factoring Quotes understand which lenders and also which offices within certain lenders offer good service levels and of course bad service levels. There is typically a correlation to price but not always. If you need a very hands on bespoke service then it is best to avoid lenders who have very low touch services.

Pricing of your factoring facility

Obviously in order to maximise your profits you want to minimise costs. The costs of a factoring facility can be significant so these are an important consideration. Elsewhere on this form I have harped on about looking at total costs and again I can only reiterate this. Headline rates can be misleading so consider all additional costs. It is also important not to sacrifice structure and service levels just to get the cheapest price. You may feel you are saving money but if the structure does not allow sufficient cash to be generated or the service levels are so poor the facility does not operate you are simply wasting your money.

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