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What should I look for in a Factoring Agent?

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There are many factors from which to choose, so you’ll want to take the time to make an informed decision. The list below details some things you might consider as you decide between potential factoring agents.


  • Does the factor’s business history indicate an ability to quickly and efficiently collect payment on accounts receivable? Even if the factor suits you in every other possible way, if that factor is unable to collect payment quickly it’s unlikely you’ll be happy with the relationship. Ask for contact information for other clients of the factor.
  • Is the factor familiar with your area of business? If not, do they demonstrate a willingness to acquire such a familiarity? If the factor is comfortable with the specific rules and needs of your industry, it’s less likely that they’ll disappoint you – or upset your customers.
  • What is the detailed collection strategy and fee structure of the factor? Given the close interaction the factor will have with your customers, you’ll want to be comfortable with their approach. Does the factor employ a collection strategy which is likely to anger your customer base? You’ll also certainly want the opportunity to compare a factor’s fees against those of its competitors.
  • Are you comfortable working closely with the factor? Given the standard relationship between a factor and its client, it’s highly likely that you’ll work very closely with the factor. It’s therefore imperative that you feel comfortable dealing with the employees of the factor, and also that you’re not uneasy about the fact that a factor will possess a good bit of knowledge about your company.



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