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How to Become a Factoring Broker

how to become a factoring broker

Becoming a Factoring Broker

There’s a little substitute for earning extra cash operating a home-based enterprise with completely flexible hours, even on a part-time basis. Being your boss and having the freedom to work when you want is possible. That is definitely how being a “Factoring Broker” works.

You can make money right from your home (or office for that matter), by merely referring qualified businesses that need extra short-term funding. Moreover, what companies do not need more funding?

You do not even have to be an expert in corporate finance. You can achieve this by yourself. Better yet, team up with others to have a greater reach. What could be simpler? You earn commissions on every dollar that’s employed. Earn it for as long as the customer remains a customer. Moreover, since a reputable private finance company backs the program and not a bulky, cumbersome bank –what could be easier?

Not signed up as a Paragon Broker? Submit the Broker Agreement electronically

What are the Benefits of Becoming a Factoring Broker?

  • Starting as a broker is fast and easy
  • There’s training available
  • You can make your venture as big as you would like
  • Transactions close quickly
  • You receive the payment immediately, and for the life of the arrangement
  • You are helping small businesses get additional funding for their day to day operations; it is work you can feel right about
  • You have the confidence of dealing exclusively with one of the premier, most highly respected financing companies in America

How to Start Being a Factoring Broker

Most states do not require licensing to work as a factoring broker. Since the arrangement is just one of making referrals and not dispensing client advice, it is also exempt from any certification process or need for formal education. The advantage then is that there are low or even no obstacles to entry in becoming a broker. Meaning, you can start right away.

Given the efficiency of doing business, it is tempting to do so. A smarter step, though, is to review the XYZ Company Broker Package carefully, taking time to understand the rudiments of what makes a “good referral” and understanding thoroughly the kinds of information you will be required to submit along with an opportunity. This will make you a better broker out of the gate. Additionally, it will save you a good deal of time and frustration later on. You may also take advantage of the training available.

Once inside the XYZ world, you will discover a host of resources available to you. Additional funding will advance your understanding of critical industries, help you recognize more potential clients, help source more leads, and convert on more opportunities. Someone is going to be the best factoring broker in the US—why not you?

What are Great Tips for Factoring Brokers?

  • Start now. There’s no time like the present.
  • You typically do not need a broker license.
  • Deals can come from anywhere. Carry business cards. Be ready.
  • Start a website or attach a link to the one you already have.
  • Attend key industry conferences and association meetings.
  • Get known in financing circles as someone who can get referrals and turn them into funded deals.
  • Visit local banks! Banks turn down 90% of loan requests. Become a trusted resource for banks near your home. You can make a living just from local banker’s turndowns.
  • Partner with others –offer to split or share fees with industry insiders and other useful sources of business.

What Are Other Types of Business Lending there to Broker?

Once you get started inside the world of factoring and invoice discounting, you will discover other types of financing opportunities open to small businesses. All these financial opportunities can also be successfully brokered for a fee. At the same time, you are working seamlessly with the same finance company.

Among other financing methods that you can Broker:

Purchase Order Finance

Typically, importers and manufacturers secure a purchase order from a qualified buyer. Consider this as the first step in any sale. Provided these purchase orders be issued from financially stable companies, they can sometimes be used to secure financing. Under this arrangement, the finance company may be prepared to advance up to 100% of the price of raw materials, or imported goods. Sometimes, this even includes freight costs and insurance. Unlike factoring, though, this is a true loan. The finance company takes title to the underlying goods allowing it to resell the items to liquidate the debt if need be. Any potential customers can expect to post additional collateral.

Work in Progress Finance

In some cases, a finance company will support the entire process of converting raw materials into finished goods. Also, they will be providing working capital support that is particularly valuable the longer the production cycle. The customer gives up title to the products and typically puts up additional collateral.

Asset Based Lending

Under a broader financing arrangement, a finance company can sometimes provide funding for all the assets of a business – accounts receivable, inventory, machinery and equipment, real estate, and even intellectual property. In this case, the basis for credit rests on the risk profile of the customer itself. While these transactions take more time to consummate, they are more comprehensive and involve higher funding amounts than typical factored deals. This makes it worthwhile to learn how to recognize and understand this technique.

Becoming a factoring broker can be a lucrative pastime or a full-time job.

How Much do Factoring Brokers Make?

If you refer a deal to us, then we pay a factoring broker commission for the life of the account. Currently, we have factoring brokers making over $10,000 per month. Results vary per broker. All you have to do is give us a name and a number. If we close the deal, then you get the commissions. Imagine getting a check in the mail every month for a single PO or Factoring referral!

What are The Advantages of Becoming a Factoring Broker?

  • Low startup costs/ no cost of entry
  • Scalable business
  • The product is something every company with A/R or PO’s needs
  • Factoring can work for start-ups and companies with poor credit profiles
  • Broad acceptance for factoring, and widely used across many industries
  • Quick closings on qualified opportunities
  • Fast payment of commissions, for the life of any factoring relationship
  • Beginning a factoring relationship can lead to other types of financing, which can be brokered for commissions
  • Factoring brokers have the potential to earn six figures annually

Business activity is gathering steam across the US. GDP numbers are improving. Increased business activity drives a need for more significant funding, and more liquidity, creating new factoring opportunities every day. Start now. Go to the link to our broker package here for complete information and an application. Involve yourself in supporting business growth across the country – for your neighbors, your friends, and for yourself.

How to Become a Factoring Broker

Not signed up as a Paragon Broker? Submit the Broker Agreement electronically

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