- 04 Apr
Reduce Factoring Service Charge By Two Thirds
Would you like to reduce your factoring service charge by two thirds? That's the range of quotes that we received in a recent mystery shopper pricing comparison exercise.
Whilst overall fees varied by a factor or 2.7 times, service charge quotations varied by a multiple of just over 3 times.
Mystery Shopper Factoring Prices
That is the scale of difference that we found in the recourse factoring service charge quotes that we received during a recent mystery shopper, market research exercise. The cheapest service charge quotation was almost exactly one third of the most expensive quote received from a range of factoring companies across the UK. This level of differential could make an enormous difference to the amount that you would pay over the course of a year.
Of course they may be other differences in quotations, but in this case these were relatively minor.
This demonstrates how you could randomly select a few invoice finance companies, without understanding the pricing differences, and you could end up paying significantly more than you need to.
Renegotiation Of Factoring Fees
Also, bear in mind that these factoring fees were quoted without asking for any further renegotiation. It doesn't neccessarily apply in all cases, but in some cases, a factor may be prepared to reduce their initial quote when in competition against other factoring companies. Therefore, it is always worth asking for a further reduction on any initial quote. Most factors will have a formula based approach to producing a service charge quote, and this will often have parameters that can be tinkered with, if they find themselves up against competition.
Therefore, it is possible that there may have be some room for renegotiation on these fees, either increasing or reducing the range of the quotes given.
We have the infographic above, regarding this reseach that you can use on your site, instructions and a larger version of the image can be found here: Factoring Pricing Infographic.
Further Information About Pricing
You can find examples of typical factoring service charge quotes here.
Source: Recourse Factoring Mystery Shopper Study - January 2017 - a standard prospective customer was offered to a range of factoring companies, who each quoted their factoring service charge.