What is the point in using a factoring broker ?

I naively thought that the idea of using a factoring broker was so that companies could capitalise on the expertise of the broker in order to ensure that they got the best deal possible.

Earlier in the week I had a call from a company that had an unhappy relationship with his factoring company and wished to be extricated as soon as possible and placed with a factor that actually lived up to their promises.

Not a problem for us as “We know which factors perform” is our catchphrase so as requested we told the prospect that we would arrange for two of the better factoring companies to contact him so that he could decide for himself which suited him best and we told him who we intended to bring to the party so that he could expect calls from them.

The following day factor 1 reported back to me saying that one of his colleagues had already received the enquiry from another (unnamed) broker and had just been approached by yet another (this time named) broker with the same deal which he rejected saying that he was already dealing with the enquiry.

The second factoring company reported today that they were well down the road with the prospect but had today received the enquiry from yet another broker and when I asked him whether or not it happened to be Mr Named Broker he confirmed that it was.

The prospect obviously thinks that the way to get the best deal for himself is to approach several brokers whereas in reality the opposite is true. We listened to what the prospect had to say and told him to expect calls from the two factoring companies that we thought most suitable whilst the third broker that they approached was punting the enquiry round the market trying to find someone that didn’t have the enquiry already in order that they could earn something from the deal. Not sure about the first / second broker though.

I’m not quite sure what the moral of the story is so I’ll think of one later

2 thoughts on “What is the point in using a factoring broker ?”

  1. There are all manner of brokers now including at least 2 telesales operations. One uses client lists to move businesses around the market and the other, in SA, uses recent adverse information lists. they simply refer to companies not already talking to a prospect. If the sales rep is any good, once their foot is in the door, the provenance of the deal is largely irrelevant.

    There are also bank employees still farming out business covertly.

    Also there are some sales reps who will tag a deal with their friendly broker even if that broker has never heard of the deal in question let alone spoken to it.

    Overall there is merit in using a broker but as we know there are brokers and then there are brokers

  2. My original comment asking why companies used factoring brokers was meant to be read in an ironic tone but you have touched on an issue that is quite close to my heart as there are far too many scoundrels out there.

    Some of the tricks used by the more unscruplous brokers are outlined in the website of the Independent Factoring Brokers Association ( http://www.factoring-broker.org.uk ) and co-incidentally one of the most unscruplous brokers who does seem to have one or two factoring salesmen on his payroll did apply to join the Association and was sent away with a flea firmly in his ear

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