Should I use a funding or factoring broker? For any business owner-It's a valid question worth asking and one that deserves a lot of attention to detail when answering. Theoretically, using a broker should be the best option for a company looking in to payroll funding or factoring receivables. In a perfect world, any logical person would think that a broker who is well connected to funding resources would be able to keep his/her clients best interests in mind when connecting them with a potential source of funds. The reality is we do not live in a perfect world and often times a broker will put their own personal wealth in to the equation when finding a company a suitor. Recently, I came across a fairly large temporary staffing company looking for funding that was being represented by a broker. What I found intriguing about the situation was that the company owner fully entrusted his company’s financial future in the broker’s hands and if it had not been for a routine follow up call on my behalf this company would not have been aware of potentially the best financing solution for his situation. So how/why could have this happened? In this case the answer came down to a matter of the broker earning a commission. Sterling Resource Funding Corp. (the company I represent) typically does not pay a broker’s fee. At the risk of sounding crass it’s not because we don’t want to it’s because we don’t have to. We are one of the largest players in our space and in this case offer the staffing agency in play the best funding option. Working with Sterling the owner will enjoy a low competitive rate on funds employed, the highest advance in the industry, and the finest support by our internal staff who with a pedigree in staffing understand the peaks/valleys and the seasonality of the staffing business. I imagine the aforementioned scenario becoming more prevalent as the funding/factoring arena picks up steam with banks closing/reducing their credit facilities to businesses across the globe and brokers pop up on the map looking to book larger commissions at the financing company that that pays them the most amount of commission.
In closing, if you do decide to use a broker make sure-
-The broker is a person you personally trust to do the right thing by you and keep your best interest at the front of their mind.
-The broker is well versed in factoring and able to qualify a suitor with some degree of accuracy.
-The broker should not charge you an upfront fee; their fees are factored in to the rate the company receives.
Lastly, if you would like to discuss your situation, you may contact Dan Stacy, Sterling Resource Funding Corp, at (516)-683-1434 or via email at email@example.com.