Risk Management. Every factoring company in our industry knows the importance of properly evaluating their portfolios. Whether it’s factoring, insurance, mortgages or any other type of lending, mitigating losses is vital for every company’s survival. Just a few years ago we saw firsthand how the mortgage meltdown crippled the entire global economy due to lack of controls and poor risk management. In the factoring community the same holds true. Every factor conducts their due diligence using a specific set of guidelines that allows them to protect their security interest in the receivables of their clients while allowing enough room to generate new sales. In many ways it is a balancing act between sales and underwriting. The sales … [Read more...]
Archives for October 2014
Prospect Yellow Flags: Factoring Deals to Approach with Caution
Last month, we covered a number of red flags for factoring brokers to avoid when working with a prospect. Besides those “back away now” situations, there are other things that can complicate your efforts to find a factoring company to work with the lead. While these are circumstances that may be resolved favorably, it is still worth your time to gather all of the information you can before investing your efforts in placing the deal. If you encounter the following situations, proceed with caution: Bad personal credit (with or without liens) To place a deal where the prospect has poor personal credit, you have to know which of your funders is willing to work with those deals. Tax liens fall into this category as well: because the … [Read more...]