For the Career-Minded
Factoring Professional.
TOPICS OF INTEREST FOR
NEW CONSULTANTS
Earning Fees and Commissions
Working From Home
Marketing for Accounts
Networking with Banks & Lenders
Ordering Broker's Packages
Working with BDOs
FactorMax Guerrilla
FactorMax Guerrilla
Business Development
System
• Specialized contact management system designed specifically for industry brokers and intermediaries.
• The Directory of American Factors and Lenders assists in placing your deals with the right funding source.
• Guerrilla Training Manual: Over 400 pages of factoring knowledge and software operation training.
• Membership to the IACFB, the International Association of Commercial Finance Brokers.
• Professionally designed factoring broker web site to assist you in getting up and running within 10 days of purchase.
• Technical Assistance and Installation to include online or streaming tele-conference training.
|
State-of-the-art prospect / contact management for the factoring and alternative commercial finance industries. |
 |
Earning Broker Commissions and Fees
Certainly one of the major attractions to a career as a business finance consultant in the factoring and alternative commercial finance industry is the almost legendary method in which referral fees are paid to brokers. This is especially true in regards to factoring and purchase order finance.
As generally accepted in the industry, factors pay professional brokers and consultants a commission of 10% of the factoring fees earned each month while the client is being financed. With many factor / client relationships lasting five or more years, this "trailing commission" arrangement allows brokers to build a book of clients over time that can lead to a substantial monthly "annuity" unmatched by virtually any other professional industry. Additional information on commissions and how they are paid can be found in our FREE publication, "An Introduction to Factoring", provided for attendees of introductory tele-conferences provided through the IACFB. (International Association of Commercial Finance Brokers)
A Typical Factoring Commission Arrangement
Typically factoring commissions to
the referring "broker of record". An example follows:
Bill, a commercial finance broker, refers a client, Ace Printing Company to
a factor. Ace provides printing for the City of Austin and although a
lucrative contract of over $100,000 per
month, the city's payment terms of 35 days are causing cash flow problems
for Ace's owner, Jim Jones. With a factoring facility in place, Ace
will be initially advanced roughly 80% of the monthly sales of $100,000
($80,000) which will solve the cash flow problem and the factor will then
subsequently wait for the payment from the city of Austin. Upon its
receipt in 35 days, the factor will rebate the 20% of the invoice face
amount not initially advanced minus the factoring fee for services.
For its service, the factor will earn a flat fee of 3% for 35 days based on the invoice face amount of $100,000 per month or $3,000 in monthly fees. For referring the account and being the broker of record, Bill will receive 10% of that fee or $300. The fee is a trailing "residual" commission and will be paid every month that Ace factors or an estimated $3,600 per year. In most factoring arrangements, the fee will be paid for the life of the account which can be many years in some instances.
Building "Books" of Business
Professional industry brokers such as
Bill may provide services in asset-based lending, equipment leasing, export
trade finance, SBA loan documentation and many other areas. Factoring,
and the related area of purchase order finance, will provide a key "focus
area" for most brokers, however, due to the residual and trailing nature of
the fees paid for referral. With just 20-30 clients on the books, many
brokers find they are earning a near six-figure income from factoring alone.
Brokers build these "books of business" through direct marketing and
networking with business owners and sources of business support in their
local community. It is important to note, however, that brokering has
no geographic limitations. Many industry brokers will utilize direct
marketing to market in dozens of states or even internationally.
FactorMax Guerrilla Business Development
Systems
Simply put, if you are serious about the
industry,
FactorMax Guerrilla is made for you.
This state-of-the art business generation system comes complete with the
necessary product and marketing training to jump-start your new career in
factoring and alternative commercial finance. It is the only system of
its kind in the industry and is available exclusively through the IACFB, DMS and
participating factors and commercial lenders.