A new brokerage for invoice factors launched January 1, 2008 which could possibly provide a boost within the invoice factoring industry: FactorLane. The website is supposed to be similar in concept to The Lending Tree, which is a mortgage broker site. Factors bid for company invoices, and companies rate the various factors.
Although this is a great idea, and will surely be very useful, I have some doubts. I tend to think that with a few exceptions, it will help the factors themselves more than the companies seeking financing. On the one hand you do have competition in the picture, which will almost certainly help to get the best deal; on the other hand, the potential clients still need to get all the same information together. According to Factor Lane’s website:
“Customers that use FactorLane have the option of uploading the documentation you need into our secure intranet where you can complete the bidding process and begin the underwriting. That means no more waiting for customers to call, and no more waiting for documents to be mailed or faxed. Instead, you gain immediate access to the information you need to make your bid, and even close the deal!
FactorLane’s online system also helps you target the right customer using various criteria, such as: factor amount, credit score, years in operation, location, industry, value of assets, etc. Because our process is easier and less time consuming, you can devote more time to securing new clients.”
Basically, it sounds great for the factors, but like a lot of work for a company in need of quick cash. To top it off, if you: have bad credit, have just been around for a few months, live in the wrong state, etc – You probably won’t get the money you need. And all the work you spent getting together paperwork and scanning it to the site is in vain.
As someone in the Credit Card Factoring field, I strongly recommend looking into this alternative financing method – before you invest your time, just to be rejected again.
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