Use a Broker to Grow Your Business
A factoring broker connects businesses looking for quicker payment on their invoices, with the factoring companies that can help them. The benefit of using a broker rather than doing the work on your own is the extensive knowledge a broker has about the industry. This saves time and makes sure the business is matched with the factoring company that best fits its needs. Best of all, factoring brokers provide this service for free and the process is simple. Read on to learn more!
We know–the “B” word can be intimidating if you aren’t familiar with it. What is a broker? Why use one in the first place? How much does it cost? Don’t worry–Factor Finders is here to explain how using a factoring broker for business financing works and why it can be beneficial for your small business.
What is a Factoring Broker?
A broker is defined as a third-party entity that acts as an intermediary between two sources. What does that mean? Essentially, we play match-maker. It is our job to connect people looking for invoice factoring directly with companies that provide funding.
How Much Does it Cost?
Nothing! Yep–you read that right. Working with Factor Finders is completely free. Seriously–there’s no catch. We get paid by our funders for the leads we refer to them and a commission for any lead that successfully converts into a factoring client.
Why Should You Work with a Broker?
Generally, we know people don’t love working with a middle man. However, in this case, working with a broker can be a great thing for you and your business. First, working with a broker can save you a LOT of time. It can take you or someone on your team a lot of time and effort to painstakingly research different factoring companies. Each company will have specialized programs, rates and terms. Even after you’ve done the research, how do you determine which one is best for you and your business?
That’s where Factor Finders can help. We’ve already done the work for you. We’ve built personal relationships with each of our funders and have been doing business with most of them for years. Our partners are well-established and trusted within the industry. Because we know our partners so well, we are intimate with their programs and what they have to offer. Therefore, once Factor Finders has an understanding of what your funding needs are and what you’re looking for in a factoring company, we can connect you very quickly to the perfect funder. We want the process to go as quickly as possible so that you can be on your way to getting the cash flow you need.
Additionally, and maybe most importantly, going through a factoring broker can save you money. While it might seem like a better idea to call a factoring company directly, this isn’t true. Because we have close relationships with all of our funders, they are able to pass along savings and special rates that ordinarily might not be available to you.
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How Does The Process Work?
It’s easier than you might think! Factoring is quick and doesn’t involve the paperwork (or debt) of a bank loan. First, give us a call or fill out a quote form and we’ll try to follow-up as soon as we can. Once we get in touch, we’ll have a short conversation with you about what type of business you have and how it operates. We’ll want to know things like:
- Where you’re located: We have funders across the entire United States. When it makes sense, we like to connect small businesses and funders that are in the same geographical location.
- How long you’ve been in business: Especially in the case of start-ups, we have partners that work specifically with new business operations that can even help you fund your first invoice!
- Who your biggest clients are: Invoice factoring relies on the creditworthiness of your clients–by giving us an idea of who you’re working with, we’ll have a better idea of which funding partner might be best suited to work with you and your clients.
- How much you’re billing a month: ‘One size fits all’ does not apply to the invoice factoring industry. Once we know how much business you’re looking to factor, we can match you with a funding partner that specializes in that area.
Once we have an idea of how you operate and what you’re looking for, we can connect you with an account manager–oftentimes instantly! After being approved, the invoice factoring process looks like this:
- First, you’ll continue to provide goods and/or services to your clients and invoice them as usual.
- Then, you’ll submit copies of your invoices to your factoring company.
- The factoring company will verify that the work has been completed or the goods were delivered and advance you 80-100% of the total invoice amount–usually within 24-hours.
- Once your client pays the outstanding invoice to your factoring company, the factor will remit the outstanding balance back to you, minus a fee for utilizing factoring services.
- Repeat as often as necessary with as many clients as you wish! Factoring is a very flexible financing option that works well for many different business models and almost any industry.