Factoring brokers' tricks of the trade

A factoring broker will earn an income from a factoring company for any business that he places, and conversely if he doesn't place the business he won't earn anything.

There are many tricks that the unscrupulous broker will get up to in order to ensure that they win the deal. Last week we received a telephone call from a recruitment company who weren't happy with the service provided by their payroll / funding provider and who telephoned Factoring Solutions to ask whether we could introduce them to a more efficient company.

We were told the names of the three payroll / funding companies that they had already approached but they also mentioned that they had spoken to another factoring broker who having taken down all of the details said that he would make some enquiries and go back to them.

We couldn't understand why the broker was unable to make his recommendations at the time as it was a very straightforward case but we suggested the names of the two most appropriate factoring companies and left it that one would contact them later that afternoon but the other wouldn't make contact until the following day as the local director was away that day.

When we spoke to the second factoring company on the following day we were told that they had received the enquiry from another broker - whereupon the penny dropped.

The other broker (who is a large and high profile outfit) didn't want to give his recommendations until he had spoken to the factoring company concerned to make sure that they hadn't received the enquiry from another source. If they had, they would have contacted another factoring company until they found one that someone else hadn't approached first.

The moral of the story is that if you approach a factoring broker and they need time to go away and think about who to recommend you to, they will be acting in their own best interests and not yours.

Ian - Factoring Solutions - 06/05/08