Some factoring brokers are a joke as I found out last week when I had a phone call from someone who had read some of my posts on an internet business forum and wanted advice on which factoring company he should deal with.
He had already approached another factoring broker thinking that they would introduce him to the most appropriate cash flow solution for his own unique funding requirements as per their claims on their marketing material.
Unless I am mistaken the prime role of the factoring broker is to add value by helping the prospect to negotiate the maze of different offerings. How can putting half a dozen factoring companies in touch with the prospect add value as he could just as easily pick half a dozen names at random from Yellow Pages and cut out a middleman that has served no useful purpose.
For the sake of the uninitiated a factoring broker will receive a commission from the successful factoring company for the life of the agreement which can often be for several years.
It is a highly competitive market nowadays with more and more factoring companies and brokers chasing a limited pool of prospects but in recent years companies looking for factoring are now approaching more than one broker so the craftier brokers are trying to cut out the competition by putting more and more factoring companies in touch with each prospect in order to reduce the possibility of another broker winning the business.
Those that introduce more than one factoring company to the prospect will often claim that they do so in order that the prospect can select the one that he feels most comfortable with but the truth is that he will discuss his requirements with a salesman who will tell him what salesmen often do but once he has signed up he will be dealing with the operations department who could and often do act completely differently.
This particular factoring broker isn’t a one man band but a high profile company who is also an affiliated member of ABFA – not that this means anything nowadays.
Whilst this article isn’t meant as a sales pitch I would like to point out that 90% of people approaching Factoring Solutions for advice will be introduced to the single factoring company that in our opinion and with the benefit of years of experience will offer the best fit for them. On rare occasions it may not be immediately obvious whether a traditional facility or spot factoring would be the most cost effective solution so we introduce the prospect to one of each.
I may not win as many deals as the broker listed above but at least I can sleep well at night knowing that Factoring Solutions has always acted in the best interests of the prospect and not their own interests