 Considering pricing your deal, you have to pay attention to such information:
1. Annual Sales Volume
2. Credit Worthiness of your clients
3. Average Invoice Size
4. Domestic or International
5. Payment Terms
A typical charge for a 30 day invoice will be 2% to 4%, 3% to 6% if the invoice is aged 60 days.
Some financial factors use the Prime Plus Method of factoring but not the Discount Method of factoring. This method is used by larger factoring financial services firms while the Discount Method is used by smaller factors.
It is known that the Prime Plus Method produces lower rates to you unlike the Discount Method. You have to find out how factors charge you for their factoring services if you want to talk to them. Do not forget to ask about additional factoring fees. Get to know whether they will be if your receivable gets "old".
There are only two fees used by a factoring financial services firm which the prime Plus Method has. A one-time fee per invoice is called the Factoring Fee. This one is the first fee. Factoring fees are charged on the gross amount of the invoice. The interest charge on the money advanced per invoice based on your advance rate is the second fee. By the way, the interest charge begins on the day you are advanced your funds for that invoice. But a percentage over the prime rate that has been agreed upon prior to signing our factoring agreement is the interest charge.
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