Factoring brokers' tricks of the trade
Factoring brokers earn a commission from a factoring company for business that they place with them so conversely if they don't place the business they 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. Recently Factoring Solutions (IFBA member) received a telephone call from a recruitment company who weren't happy with the service provided by their payroll / funding provider and who telephoned FS to ask whether they could introduce them to a more efficient company.
Factoring Solutions were given the names of the three payroll / funding companies that the the company 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 they would make some enquiries and get back to them.
FS couldn't understand why the broker was unable to make his recommendations at the time as it was a very straightforward case but they 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.
When FS spoke to the second factoring company on the following day they were told that they had already 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 yet 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.
