Factoring fees can be a significant cost for any business and as such it is important to reduce factoring costs wherever possible. We have a few tips to help you:
Review your facility – it is important to reciew your facility on a regular basis both with your own factoring company and with the market. As your business grows or changes it may well mean that your business qualifies for better rates. Typically the higher your turnover the lower the percentage service fee you will pay. Often businesses that experience rapid growth fail to review their facility and as such are paying a lot more than they need to. I recently spoke with a business whose turnover had tripled since they set up their facility. As a result we more than halved their total fees. Importantly the market also changes and as such better or more suitable products become available that may be more cost effective. If you want a full review of the market to see what savings you can make please contact the team at Smart Factoring Quotes today.
Only draw down what you need – by running your business bank account as close to zero as is practically possible you will avoid paying unnecessary discounting fees on what you have drawn down from your factoring facility. It is pointless owing money on a factoring facility which attracts fees while having cash in your business bank account attracting no interest.
Plan ahead – by anticipating your cash flow needs you can use BACS transfers rather than expensive same day transfers. I speak to some businesses that always use same day transfers and the costs really add up over the course of a year.
Get the most cost effective facility – throughout this forum I harp on about total costs and not just looking at headline rates. I cannot stress how important this is. It is important to understand any lenders total fee structure and we are happy to help you with this.
If you feel that you are paying too much for your factoring facility and you want to reduce your factoring fees contact us today on 0845 643 9485.