Beware. If you’ve received a proposal from more than one factoring company, you may not be comparing apples to apples. Proposals list basic terms like the advance rate and periodic discount fees but leave out additional fees and policies that you’ll need for an accurate side-by-side comparison. You won’t know your full cost of factoring until you see all the fees and policies in the formal agreement. Unfortunately, that’s not generated until you’ve supplied the factoring company with additional underwriting documents, a time-consuming activity. So, to save you from going through that processes multiple times, use the chart below to ask each factoring company which additional fees and policies are included in their standard contract. This will help narrow the field of contenders up-front with minimal effort on your part. Of course, it’s equally important to get a feel for company culture and customer service, but conducting this “interview” will help to quickly eliminate factoring companies with fees and policies that don’t match up well with your unique business needs.
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