The simple answer is “yes”, Factoring does affect your collections. However, most Factoring lenders are hoping that your debtors don’t pay their invoices on time, so they can make money charging you additional fees.
With nearly 45 Factoring lenders in the industry, each has a different collection strategy. This will depend on your size, your exposure, and of course the type of facility you have. If you have a facility where there is a daily interest added to your fee, then it would be reasonable to assume, the level of collection would be lower than a firm with a set fee.
Bank products often do no collections as they are a confidential product, allowing the client to maintain all those procedures as the bank has access to the trading account to monitor. Smaller lenders don’t have that luxury and whether it’s disclosed or not, the client has to maintain constant checks to ensure that their accounts are up to date and they’re not incurring added interest or late fees.
For more information in regards to the different facilities, please call our office on:
Ph: 1300 00 8332
Email:sales@tdfc.com.au
Website: tradedebtorfinance.com.au
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