I wonder if anyone can offer any help/guidance with dealing with factoring companies??
Client has been factoring his sales invoices for the past 18 months, initally from what the client tells me, it worked great, he had regular cashflow and helped him out of the hole they were in at the time.
Roll on 18 months and client isnt so happy now, the bank has made serveral mistakes (causing embarressment with a couple of his biggest clients) and the general level of service has dropped, although the bigger concern is the factoring charges,averages about £2.5k per month !!!
He ideally wants out from the factoring, has anyone gone through this with any of their clients?? Can you buy your way out?, possible penalties or if anyone can offer up any experience of this type of situation it would be apprecitaed.
There is usually a mechanism by which you can cancel the contract - just like any contract - but there is usually a notice period of about (IIRC) six months.
However, I don't know if there's usually a minimum contract period (in those cases where I've been brought in by companies who use factoring, there was never any mention of a minimum - but my involvement came several years into the contracts, so they may simply have been long past it).
Just find the paperwork for the contract and give it a read through. All your answers will be there.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
I think you need to refer to the original agreement. From my experience, the factoring is an all or nothing, so its not something that can be scaled back over time one client at a time.
I have a client who has changed his contract and reduced his fees, by chasing debt himself. That will flow him along until the contract period is over, and he can leave full stop
