We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

How do I Choose the Best Factoring Agents?

By J. D. Kenrich
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Cash flow problems can lead businesses to explore a wide range of solutions. When an enterprise decides to sell its own accounts receivable to a factoring agent to gain rapid access to money, consideration of several key factors should occur. Companies endeavoring to select the best factoring agents for their specific needs should examine the tangible experience, industry contacts, historical performance, operational style, and fee structure of any prospective service provider.

A critical attribute common to the best factoring agents is a lengthy track record marked by continuous success in receivables collection. Highly skilled factoring agents will be able to accurately analyze a company's accounts receivable and determine whether they are confident in their own ability to secure payment on them. An important component of this ability is a factoring agent's degree of familiarity with the account seller's industry sector. Having intimate knowledge of the types of customers with outstanding balances greatly aids in tailoring effective collection strategies and balance recoveries.

Yet another significant factor in identifying the best factoring agents is the precise techniques and strategies to be employed when attempting to collect on the seller's accounts payable. The agent selected will inevitably come into direct contact with the selling company's clients and, therefore, the style and tone taken during the collection process is a relevant consideration. Any prospective factoring agent should have a reputation for professionalism and courtesy when dealing with account holders. Otherwise, their approach may serve only to alienate and offend customers and cause them to take their business elsewhere in the future, resulting in harm to the account seller's business.

To gain insight into prospective factoring agents, it is wise to solicit recommendations and references from trusted industry colleagues. This can help provide a glimpse of how the potential relationship with the factoring agent is likely to function and is a useful way to determine whether the seller's needs are a good match for the philosophy and structure of the agent. An easy, workable relationship between the seller of accounts receivable and the factoring agent is a great predictor of success.

Last, but not least, any company attempting to differentiate among several factoring agents must conduct a comparison of fee structures, term contract requirements, and policies relating to the return of reserve amounts. Businesses must carefully balance the costs assessed by the factoring agent in collecting on accounts against the potential benefits offered by quick access to funds. Neglecting to perform this basic analysis renders the fundamental purpose of factoring essentially moot.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.