![]() We are transparent and upfront with the true cost of factoring, even sending a summary statement that breaks down all the costs after every transaction. With TAFS, you work with a factoring partner who believes in keeping costs low and straightforward. The next time you are comparing factors, ask questions to find the TRUE COST of their program. Sometimes this rate only remains good if the invoice pays within a very short amount of time, then jumps up before your customer pays within their standard terms. No one likes wasting money on fees.ĭon’t fall victim to the “teaser” lower rates. Soon he will be running himself ragged simply to keep his business going. This does not include the same-day advance fee, setup costs, required reserves, ELD transaction fees, or aging fees. Now he’ll only receive $960 for his invoice, turning that 2% rate into 4%. ![]() But did he remember to ask about their factoring fee structure before signing up? Does he even understand the payment terms? ABC Factoring charges a $5 invoice submission fee and a $15 invoice processing fee. If “John Trucker” has a $1,000 invoice and sells it to ABC Factoring at a 2% rate, you would expect to receive $980 for the invoice. At the end of the day, the whole reason you are factoring is to improve your cash flow. Taking this into consideration can make a big difference for small business owners. You want to look at the additional fees such as per invoice fees, high aging fees, setup costs, minimums, etc. Comparing rates is not as important as actually reviewing the total factoring COSTS of selling your invoice vs the value of the invoice. You need to make sure you understand the true workings of the company that you are putting in charge of your accounts receivable. When deciding between invoice factoring companies, don’t take companies at face value and get caught up in the marketing lure of who the best factoring company is. Before you rush into signing up for factoring services with the first company you find, let’s cover some of the things you want to look for. Do you have unpaid invoices that you need to turn into working capital? A factoring company can help but this is not as cut and dry as a cash advance. ![]()
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