Texas Factoring Brokers

Written by Patricia Tunstall
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Brokers in the factoring industry work on commission and earn referral fees by finding and recommending small businesses to factoring companies. As a valuable source of new business, brokers are appreciated for their personalized service as a go-between. Most commissions are based on the company's or bank's factoring fees, meaning, there is a tie-in with the charges to the bank's customer, the business owner, for factoring services.

If, for example, a factoring company charges four percent or higher for a factoring fee, it may pay a 15 percent commission on any contracts in that range. Less than a four percent fee may earn a 10 percent commission. Often, if the factoring company cannot fund the client, for some reason, it will then refer the broker to a funding source.

Brokers and Banks

Most companies have their own salespeople, but word-of-mouth advertising and broker referrals are important sources of new business. Factoring companies are especially glad to have good contacts in the banking and legal professions because these contacts are in a particularly strategic position to find businesses who need the resources offered by factoring. Networking is a time-honored activity throughout the business world, and it is just as rewarding in the factoring industry.

Factoring banks also carry on traditional banking enterprises, of course, and the relationship between the two ventures is one of mutual aid. A business may contract to use the factoring services of the bank and remain a good customer until the day when the owner may qualify for traditional bank financing. In this case, one aspect of the bank's operations acts as a broker, of sorts, for the other aspect.

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