The Benefit Of Factoring Brokers
Today more and more companies have begun to use factoring as an essential part of their financial planning.
It offers a wide number advantages over using banks and other lenders to raise cash for a business. In fact it’s one of the most effective and secure ways to improve the cash flow which is the life blood of any small company with ambitions to grow bigger and more successful.
Factoring represents a lower risk to a company than taking on borrowing as it is effectively taking an advance on money which is due to be paid in time.
Any company thinking of going down this route has two options – to search for a lender themselves or to go through factoring brokers.
While searching for a lender directly may seem to be a simpler and more straightforward option, it is not without its risks and disadvantages. These should be considered carefully before weighing up whether it would be a better option to work with factoring brokers who have extensive knowledge of the market and the many options available.
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The disadvantages of approaching lenders directly
It takes time
There are literally hundreds of lenders out there and you will need to give the same details to each one you approach to get a quote. So even after you’ve done research and selected possible candidates there’s a very big job ahead of you.
The choice is huge
There are so many lenders to choose from – some will specialise in one area, others in another and it can be very difficult to narrow down a shortlist of the ones that would be best suited to your business.
You can tell what level of service you’ll receive
Every lender will tell you that the service will be exceptional and often this will be true. However if it turns out not to be so excellent you may be committed to a long contract or expensive cancellation fees.
The difficulty of comparison
Different lenders will present the way they charge in different ways and it can be hard to compare like with like.
The advantages of using factoring brokers
All of the issues above can be resolved simply by using independent factoring brokers such as Touch Financial.
Preferential rates and special offers
Some brokers have access to preferential rates and special offers due to the close relationships they have with invoice finance lenders. Touch Financial for example are able to arrange a trial invoice finance facility whereby customers can leave at any time during the first six months. This is a fantastic offer considering contracts are usually for twelve months and can rarely be broken early.
Quotes gathered quickly
Just pass on your relevant company information once and a number of quotes can be gathered by factoring brokers very quickly – very often on the same working day.
Focus on the right lenders
Factoring brokers know which particular lenders have the most experience of businesses in your sector or even in your situation. By focusing on the lenders who will be most use to you, and not going near the ones that won’t, they can save you a great deal of time and effort.
You’ll find out just how good they are
The chances are that a broker has introduced many other businesses to a particular lender and will still be in touch with them. This means they will know just how good the service is and will be able to advise you.
You’ll be advised on the best value
Similarly, factoring brokers will know just who offers the best value and will be able to advise you accordingly.
You can be sure of independent, objective advice
Above all, by using a broker like Touch Financial, you can be sure that you are benefiting from independent objective advice based on a wealth of knowledge of the market.
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Also in this section:
- A factoring brokers role
- How to find the best deal from a broker factoring company
- The difference between broker factoring and going direct
- Considerations when selecting factoring companies
- Company factoring UK - Which lender is right for you?
- The role of an invoice discounting broker
