Unfortunately, most factoring companies will not do this.Ĭan Invoice Factoring Improve My Business? We can also have the diligence fee taken out of your first advance, so you’re not paying it upfront. And our diligence fees will always fall within that range, oftentimes even less. At Harper Partners, we charge only as much as it costs us to run our diligence, not a penny more. Look out for exorbitant diligence fees well above that range. These fees are to run all their credit and background checks, tax diligence, analyze your business and customers. For instance, we won’t tack on an extra month of fees because the invoice was out for 31 instead of 30 days.Īll factoring companies also have a one time diligence fee which can range from $400-$600 for new clients. At Harper Partners we charge on a daily basis, so however long (to the day) the invoice is outstanding is the time we will use to calculate the fee. Beware, one common trick is to charge a low monthly factoring rate, but then charge you for two months even if the invoice was paid in a month and one day. In addition, some receivables factoring companies will advertise very low factoring rates (1% or less), which they will then mark up with a bevy of hidden fees. In these situations, proceed cautiously or move on to another factor that will be transparent with you. When considering factoring fees, transparency is very important – factoring companies that don’t make it simple to calculate their all-inclusive fees are probably doing this for their own advantage. Harper Partners’ fees typically range between 1-3% per month. They won’t ever hear from us. Payment for invoices are directed to an account we set up under your company’s name.įactoring fees range from 1-5% per month on the face value of the invoice. If you prefer we don’t talk to your customers at all, that’s not a problem. We have account managers who politely follow up on outstanding invoices, at your direction. Additionally, funds from factoring invoices can augment your available bank credit if needed.įinally, Harper Partners can help you collect on your receivables, but only if you want us to. Ultimately the factoring company is underwriting your customers as much as they’re underwriting your business. Furthermore, the high approval rate allows many to qualify for factoring even if they’ve been declined for a bank loan. The quick speed to funding allows a company to take advantage of immediate business opportunities such as large orders or timely expansion.
The simple application process eliminates the major hurdles that banks place on small businesses when applying for a loan. And much, much less paperwork and headache than raising equity. Seamless access to funding allows a business to meet payroll, grow unimpeded, earn supplier discounts for early payment or bulk buys, or invest in new equipment to improve productivity.įactoring applications take much less time and paperwork than bank loans. And in terms of size, Harper Partners can fund up to $5 million credit lines, which is comparable to what most banks are willing to provide small businesses. The effective rate businesses pay through factoring is much better than other financing alternatives that don’t rely on their customers’ creditworthiness.įactoring also comes with a simpler application process, quicker time to funding, and much higher approval rate compared to bank financing. This is great for early stage or not quite profitable businesses selling to established companies or the government. No debt equals no restrictions.Īnother benefit of factoring is that the factoring company considers the credit quality of the applying business’s customers. A business sells its accounts receivable, receives cash and that’s it… There are no limitation to what the business can do with the funds. In contrast to bank financing, invoice factoring is not debt. Invoice Financing Compared to Traditional Bank Financing
0 kommentar(er)
