Factoring company interest rates

Factoring companies have historically charged interest at a percentage over Base Rate ( say 2.5% to 3%) but have built in to the Agreement a minimum Base Rate of, say 4% so their current lending rate of 7% per annum is effectively 5.5% over Base

In the light of the recent reduction of Base Rate to levels previously unimagined many factoring companies have switched their interest charging structure to a percentage over Libor so that they can maintain their margin on lending but we were talking to one of the independent factoring companies that we deal with who informed us that they do not have any minimum built into their agreement and their current lending rate is between 4% and 4.5% per annum.

The irony of this is that their factoring interest rate is now considerably cheaper than that charged by the bank that funds them

4 thoughts on “Factoring company interest rates”

  1. Good talking to you Marc and hopefully the factoring company will contact you tomorrow morning

  2. Thanks Chris but if you wish to advertise on my blog please contact me for the current advertising rates.

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