[RichardGerard]

Micah as much a anything else clients fear factoring because it means they are assigning (selling) their invoices (and that they have heard horror stories about third parties trying to collect too zealously). In most instances you're right- they're paranoid- since factoring firms interests dovetail with those of the client.

ABL divisions of banks (think Kevin at SeaCoast), offer factoring and ABL facilities- and the cost of capital is NOT more expensive for the dominion of cash ABL facility. Other folks providing ABL LOC's offer the same products- but if they are borrowing their capital from a bank, the cost of their capital will be higher (to clients) than a Bank providing an ABL- makes sense?

[abfunders]

Micah as much a anything else clients fear factoring because it means they are assigning (selling) their invoices (and that they have heard horror stories about third parties trying to collect too zealously). In most instances you're right- they're paranoid- since factoring firms interests dovetail with those of the client.

ABL divisions of banks (think Kevin at SeaCoast), offer factoring and ABL facilities- and the cost of capital is NOT more expensive for the dominion of cash ABL facility. Other folks providing ABL LOC's offer the same products- but if they are borrowing their capital from a bank, the cost of their capital will be higher (to clients) than a Bank providing an ABL- makes sense?

Of course the cost of capital isn't more for an ABL at Seacoast (or the 2 other bank-owned facilities that I work with) than a regular factor. I'm just commenting that other lenders who do smaller ABL's that are not banks... their cost to capital is higher, which means rates may be higher. However, they have other ways to curtail their costs and offer the clients rates and/or costs (meaning, the difference between a factor rate vs APR...) of their capital that are management and can help the business grow.

As with everything, it's just a matter of knowing what options are out there, then presenting the right one that the client will appreciate to help close the deal. Lender likes borrower, borrower likes lender, broker gets paid for cementing the relationship, hopefully everyone (except the lenders who didn't fund) wins.