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      • Breakdown of the Costs for Factoring
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      • How a Company Enters into a Factoring Agreement
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      • Changing Factoring Company
      • The Relationship Between the Factoring Company and the Debtor
      • Legal Aspects of a Factoring Company Pursuing Payment Through the Courts
      • Factoring in the Construction Industry
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  • Home
  • About
  • Podcast
    • Summaries
    • Articles
  • Invoice Finance
    • Basics
      • What is Invoice Finance?
      • What is Reverse Factoring?
      • What are Trade Receivables?
      • What is the Cash Conversion Cycle?
      • What is Days Inventory Outstanding?
      • What is Days Sales Outstanding?
      • What is Days Payable Outstanding?
    • Advanced
      • Invoice Validation and Fraud Detection
      • Reasons Why Invoice Finance is Better than a Bank Loan
      • How to Choose the Right Factoring Firm for Your Business
      • A Closer Look at Factoring Agreements
      • What is Trade Receivables Securitisation?
      • Breakdown of the Costs for Factoring
    • Factoring
      • Why Companies Use Invoice Factoring
      • What Companies are Suitable for Invoice Factoring?
      • Factoring and Invoice Discounting
      • How Factoring Works
      • Asset Based Lending
      • Is Factoring Right for Your Company?
      • Accounting for Factoring
      • How a Company Enters into a Factoring Agreement
      • The Costs Involved in Factoring
      • Changing Factoring Company
      • The Relationship Between the Factoring Company and the Debtor
      • Legal Aspects of a Factoring Company Pursuing Payment Through the Courts
      • Factoring in the Construction Industry
    • Fraud
      • Types of Invoice Fraud
      • How to Combat Invoice Fraud
    • E-Invoicing
      • Legal Status of Electronic Invoicing
      • The Benefits of E-Invoicing
      • Implementing an E-Invoice System
      • E-Invoicing Adoption in Mexico and The Rest of the World
  • Brokers
    • UK Brokerage Firms
  • Factoring Firms
    • Europe
      • UK
      • France
      • Germany
      • Italy
      • Spain
      • Holland
    • North America
      • USA
      • Canada
    • Australasia
      • Australia
      • New Zealand
  • Hi-Tech
    • Digital Platform/IT/Software Providers
    • UK Fintech
    • Articles
      • Enhancing Fintech Interoperability: Digitalizing Trade Documents for Efficiency and Security
      • The 7 Types of AI and Their Implications for the Future
      • Transforming Trade Finance: The Role of AI
      • The Different Programming Languages Used in Fintech Companies and Financial Institutions
      • UK and US Authorities Intervene in AI Sector
      • Web3 Applications and the Future of Trade Finance
      • What is Web 3?
      • What Can Fintech do for You?
      • What is Fintech?
      • Tokenisation of Finance
      • Payment Services in the Invoice Finance Sector
      • What is ChatGPT and Why the Fuss?
  • Rating Agencies
  • Securitisation
    • Deal Arrangers
    • Book Runners
    • Articles
      • The Roles of Deal Arrangers and Book Runners in Securitization
      • What is Trade Receivables Securitisation?
      • The Appeal of Trade Receivables Securitisation
      • Risk Mitigation for Trade Receivables Securitisation
  • Legal
    • Law Firms
    • Articles
      • A Guide to Accounts Receivable Purchase Agreements and Invoice Discounting Agreements
      • The Challenges of KYC and AML Checks
      • What is The Model Law on Electronic Transferable Records (MLETR)?
      • Snapshot of Factoring Legal Schemes in England and Wales
      • How are UK Factoring Firms Regulated?
      • What is ISO20022 and Why is it Important?
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    • Economic Indicators
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      • Economic Forecast for the UK in 2023
      • Economic News for 2022
      • Financial Crisis or Not?
      • Credit Suisse Bailout
  • Credit Insurers
    • Credit Insurers
    • Articles
      • Credit Insurance Legal Aspects
      • Credit Insurance in Trade Receivables Financing
      • The Benefits of Credit Insurance in Invoice Finance
      • Eligibility Requirements for Capital Relief by Using Credit Insurance
      • What are Export Credits and Country Risk Classifications?
      • How the War in Ukraine Affects the Price of Credit Insurance for Trade Finance
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Home Invoice Factoring Factoring

Which Factoring Brokers to Use?

John Goodden by John Goodden
July 12, 2023
in Factoring, Invoice Factoring
0
factoring brokers
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Factoring is a popular and effective way for businesses to improve their cash flow and access additional funding by selling their unpaid invoices to a third-party company, known as a factor, for a fee. However, finding the right factoring company for your business can be challenging, as there are many things to consider, such as the cost, the service level, the contract terms, and the reputation of the factor.

Some businesses may prefer to approach factoring companies directly, without using a broker. However, this may not be possible or advisable for all businesses. Some reasons why businesses may need or want to use a broker are:

  • They may not have the time, resources, or expertise to research and compare different factoring options on their own.
  • They may not have access to all the factoring companies in the market, as some may only deal with brokers or certain types of businesses.
  • They may not have the bargaining power or the knowledge to negotiate the best rates and terms with factors.
  • They may benefit from the guidance and advice of a broker who can help them choose the most suitable factoring solution for their needs and situation.

This is where factoring brokers can help. Factoring brokers are intermediaries who can compare different factoring options, negotiate with factors, and advise businesses on the best solution for their needs.

However, not all factoring brokers are trustworthy, professional, or experienced. Some may have hidden agendas, conflicts of interest, or poor knowledge of the industry. Some may also charge excessive fees, mislead customers, or provide substandard service. Some are essentially websites with automated responses designed to generate leads that earn fees from factoring firms.

Unfortunately, there is no regulation or licensing requirement for factoring brokers in the UK. Anyone can call themselves a factoring broker without having any qualifications, experience, or accountability. This means that businesses have to be very careful when choosing a factoring broker, as they may end up with a bad deal or worse.

Therefore, it is essential that businesses do their due diligence before engaging a factoring broker. Here are some tips on how to choose a reputable and reliable factoring broker:

  • Check their credentials. Look for evidence of their experience, expertise, and reputation in the industry. Ask for references from previous clients and testimonials from satisfied customers. Look for any awards, accreditations, or memberships of professional associations that indicate their quality and credibility.
  • Check their independence. Make sure that they are not affiliated with any particular factor, bank, or insolvency practitioner. Ask them how they are paid and whether they receive any commissions or incentives from factors. Ask them to disclose any potential conflicts of interest or biases that may affect their advice.
  • Check their transparency. Make sure that they are upfront and honest about their fees, terms, and conditions. Ask them to provide you with a written proposal that outlines the details of the factoring deal they are recommending, including the costs, benefits, risks, and obligations involved. Ask them to explain any jargon or technical terms that you may not understand.
  • Check their service. Make sure that they are responsive, attentive, and helpful throughout the process. Ask them how often they will communicate with you and how they will keep you updated on the progress of your application. Ask them how they will handle any issues or complaints that may arise along the way.

By following these tips, you can find a factoring broker who will act in your best interest and help you get the best factoring deal for your business.

Summary

Factoring brokers are intermediaries who can help businesses find the best factoring deal for their needs. However, not all factoring brokers are regulated or reliable. Businesses need to do their due diligence before choosing a broker and look for evidence of their credentials, independence, transparency, and service. Alternatively, businesses can try to approach factoring companies directly if they have the time, resources, access, and knowledge to do so.

Note

Although factoring brokers are not regulated in the UK, they may be subject to some oversight by the Financial Conduct Authority (FCA) if they introduce customers to credit or other credit brokers. However, this does not guarantee that they are independent, transparent, or professional. There are also some trade associations for factoring brokers, such as the National Association of Commercial Finance Brokers (NACFB). However, FCA regulation costs between £2,000 and £50,000 per company, so these costs would inevitably get passed on to consumers.

Tags: factoring brokersFinancial Conduct AuthorityNational Association of Commercial Finance Brokers
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  • Home
  • About
  • Podcast
    • Summaries
    • Articles
  • Invoice Finance
    • Basics
      • What is Invoice Finance?
      • What is Reverse Factoring?
      • What are Trade Receivables?
      • What is the Cash Conversion Cycle?
      • What is Days Inventory Outstanding?
      • What is Days Sales Outstanding?
      • What is Days Payable Outstanding?
    • Advanced
      • Invoice Validation and Fraud Detection
      • Reasons Why Invoice Finance is Better than a Bank Loan
      • How to Choose the Right Factoring Firm for Your Business
      • A Closer Look at Factoring Agreements
      • What is Trade Receivables Securitisation?
      • Breakdown of the Costs for Factoring
    • Factoring
      • Why Companies Use Invoice Factoring
      • What Companies are Suitable for Invoice Factoring?
      • Factoring and Invoice Discounting
      • How Factoring Works
      • Asset Based Lending
      • Is Factoring Right for Your Company?
      • Accounting for Factoring
      • How a Company Enters into a Factoring Agreement
      • The Costs Involved in Factoring
      • Changing Factoring Company
      • The Relationship Between the Factoring Company and the Debtor
      • Legal Aspects of a Factoring Company Pursuing Payment Through the Courts
      • Factoring in the Construction Industry
    • Fraud
      • Types of Invoice Fraud
      • How to Combat Invoice Fraud
    • E-Invoicing
      • Legal Status of Electronic Invoicing
      • The Benefits of E-Invoicing
      • Implementing an E-Invoice System
      • E-Invoicing Adoption in Mexico and The Rest of the World
  • Brokers
    • UK Brokerage Firms
  • Factoring Firms
    • Europe
      • UK
      • France
      • Germany
      • Italy
      • Spain
      • Holland
    • North America
      • USA
      • Canada
    • Australasia
      • Australia
      • New Zealand
  • Hi-Tech
    • Digital Platform/IT/Software Providers
    • UK Fintech
    • Articles
      • Enhancing Fintech Interoperability: Digitalizing Trade Documents for Efficiency and Security
      • The 7 Types of AI and Their Implications for the Future
      • Transforming Trade Finance: The Role of AI
      • The Different Programming Languages Used in Fintech Companies and Financial Institutions
      • UK and US Authorities Intervene in AI Sector
      • Web3 Applications and the Future of Trade Finance
      • What is Web 3?
      • What Can Fintech do for You?
      • What is Fintech?
      • Tokenisation of Finance
      • Payment Services in the Invoice Finance Sector
      • What is ChatGPT and Why the Fuss?
  • Rating Agencies
  • Securitisation
    • Deal Arrangers
    • Book Runners
    • Articles
      • The Roles of Deal Arrangers and Book Runners in Securitization
      • What is Trade Receivables Securitisation?
      • The Appeal of Trade Receivables Securitisation
      • Risk Mitigation for Trade Receivables Securitisation
  • Legal
    • Law Firms
    • Articles
      • A Guide to Accounts Receivable Purchase Agreements and Invoice Discounting Agreements
      • The Challenges of KYC and AML Checks
      • What is The Model Law on Electronic Transferable Records (MLETR)?
      • Snapshot of Factoring Legal Schemes in England and Wales
      • How are UK Factoring Firms Regulated?
      • What is ISO20022 and Why is it Important?
  • Rates
  • Economy
    • Economic Indicators
    • Articles
      • The Collapse of the Russian Rouble: An Historical Analysis and Current Implications
      • The Current State of the UK Economy
      • Economic Forecast for the UK in 2023
      • Economic News for 2022
      • Financial Crisis or Not?
      • Credit Suisse Bailout
  • Credit Insurers
    • Credit Insurers
    • Articles
      • Credit Insurance Legal Aspects
      • Credit Insurance in Trade Receivables Financing
      • The Benefits of Credit Insurance in Invoice Finance
      • Eligibility Requirements for Capital Relief by Using Credit Insurance
      • What are Export Credits and Country Risk Classifications?
      • How the War in Ukraine Affects the Price of Credit Insurance for Trade Finance
  • Associations
  • ESG
    • ESG Articles
    • ESG Resources
  • Crypto Finance
    • Ripple (XRP) Wins Latest Battle with SEC
    • UK Passes Financial Services and Markets Act 2023
    • Latest about the UK Regulatory Proposal for Crypto Assets
    • How will MiCA (Markets in Crypto Assets) Regulation Affect Trade Finance and the Banking System?
    • Markets in Crypto Act (MiCA) Becomes EU Law
    • An Introduction to EU’s Markets in Crypto-Assets (MiCA) Law 
    • Supply Chains and Blockchain Technology
    • The DeFi Revolution
    • How DeFi Fulfils the Functions of Finance
    • Taxonomy of Crypto Assets
    • Crypto Currencies
  • Interviews
    • Interview with Tradeshift
    • Interview with Kyriba
    • Interview with Orbian
    • Interview with Crossflow
    • Interview with Dancerace
    • Interview with BlackLine
    • Interview with Novicap Part One
    • Interview with Novicap Part Two
    • Interview with Karl Page
    • Interview with A P Trade Finance
    • Interview with vabble
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