Invoice Factoring Costs
So you are thinking about invoice factoring, but have questions about cost?
What may often spring to mind is many hidden fees with no real long-term benefit. Let’s dispel this myth and reveal some truths concerning factoring and the related price tag.
Here are five facts about invoice factoring:
As for set up fees, usually your factoring company will only charge you a one-time set up fee. Once you have an open account with a factor, you will not have to go through the opening process, or opening costs all over again the next time you need to factor your invoices. This is not true for a each new loan you open.
Obviously the interest rates and management or factoring fees, will vary with each situation, and the type of factoring you are looking for, but the savings in terms of time spent on bill collection and other administrative tasks make factoring a serious contender for improving cash flow at a lower cost than you may have thought.
For this reason it really is worth taking the next step and chatting to a factoring company to find out the real cost compared to a more traditional method of financing. You may be surprised by the answer.