Factoring brokers may all appear to be similar to the casual observer but that is not the case as there are several different types of company that will dabble in the broking of factoring and invoice discounting with the genuine specialist independent factoring broker now probably being in the minority. The various categories could be split as follows:-
These tend to be internet based and have expertise in web design and search engine optimisation rather than an in depth of the factoring market place. Most of these websites are software driven and invite people to fill in forms whereupon they will receive quotes from various factoring companies. Worst still, most of the sites are actually tied to the one company’s database who seem to be operating under quite a few different names of their own with the addition of other website owners operating alongside them on an affiliate basis.
The problem with this approach is that factoring is not a “one size fits all” facility but due to the operational vagaries of the different participants it should be viewed as “horses for courses” and with the best will in the world that can only be effectively achieved when dealing with real people and not computer software.
Jack of All Trades:-
A recent announcement by the National Association of Commercial Finance Brokers stated that it’s members had seen a substantial drop in the amount of traditional commercial finance business that they were writing so many of them were now dabbling in factoring and invoice discounting as that was one of the few areas of commercial finance showing growth.
Unlike many other forms of commercial finance where rate is everything that is not the case with factoring due to the large element of service involved and it is an unfortunate fact of life that some of the well known names in the factoring industry are poor performers in the service stakes so we therefore view the involvement of these inexperienced general finance brokers as detrimental to the broking industry and not necessarily in the best interests of the prospect either.
Click here to go different types of factoring broker part 2