Guide to Choosing an Invoice Factoring Provider
Introduction
Choosing an invoice factoring provider is a critical decision that can affect your agency's growth and cash flow. This guide offers a checklist of considerations to help you make an informed choice.
Questions to Ask Potential Providers
• What percentage of the invoice value will you advance?
• What are your service fees?
• Do you require long-term contracts?
• How quickly can you process an invoice?
• Do you offer selective factoring?
Key Terms and Conditions to Look Out For
• Length of the contract
• Termination fees
• Any concentration limits
• Confidentiality clauses
• Dispute resolution mechanisms
Comparison Table
• Provider name
• Advance rate
• Service fee
• Contract length
• Additional fees
Hidden Fees to Watch For
• Setup costs
• Re-factoring fees
• Interest on late payments
• Auditing fees
• Renewal charges
• Exit fees