But you need to be careful.

Like most industries, invoice factoring is made up of responsible, ethical business people who do the right things and serve their clients honorably. But, as is the case anywhere, there are players who, given the opportunity, will sometimes not act in the customer’s best interest.

In particular, one sneaky factoring trick involves a factoring company “sitting” on a received payment for a few days in order to accrue additional fees to be paid from funds held in escrow.

What your invoice factoring company SHOULD do

Say you elect to factor a $25,000 receivable. The transaction might break down as follows:

Note: Advance rates and financing fees are samples. Actual rates and fees will vary.

Receivable Amount: $25,000

85% Advance: $21,250

Less Initial Financing Fee: $875

Advance to Your Company: $20,375

Amount Held in Escrow: $3,750

If the invoice is paid on time (30 days), the full amount in escrow ($3,750) is paid to your company.

Here’s where things can get a little sketchy. If the invoice is paid after 30 days, an additional $438 (1/2 of the original financing fee) is charged for each 15-day period, or part thereof, that the invoice remains outstanding. So, in this example, another $438 would be charged if the invoice were paid after 45 days. These additional fees would be applied to the funds held in escrow.

All this is acceptable, standard, and spelled out in the agreement in which you entered into the factoring arrangement. Make sure everything is clearly defined and explained to your satisfaction before you sign.

What your invoice factoring company should NOT do

Again, most factoring companies do things the right way, and when transactions are handled correctly, the arrangement is fair to everyone. That said, here’s what to look out for.

Assume your client pays your factoring company 28 days after invoice. That’s less than 30 days and considered on time. However, a dishonest factoring company – again, they’re in the extreme minority – could wait until day 31 or 32 before marking the invoice as paid, and deduct an extra $438 from your escrowed funds before reimbursing you.

The same thing could happen if a payment comes in at day 43 or 44 and the company does not acknowledge receipt until after day 45. That would mean a total of $875 in extra financing fees. And remember, you’re charged the fee for the entire 15 day period, regardless of when the payment is actually received.

How to Protect Yourself Against Sneaky Invoice Factoring Companies

Ask for Referrals. Remember what they say about an ounce of prevention. If you’re careful about who you work with, you’re much less likely to run into trouble later. Ask your accountant or another business associate you trust to recommend reputable factoring companies. After speaking with each factoring company, ask for the contact information of current clients.

Ask for Documentation. If something seems suspicious, it’s okay to ask if there’s been a mistake in calculating the fees you have paid. For example, if a long-term client has been known to occasionally be five of six days late, but never as much as 17 or 18, you should probably make a polite inquiry. Ask when the factoring company marked the invoice as received and for verification of when the funds were deposited to its bank.

Ask the Source. If payments are posted as late, consider calling your client’s accounts payable department. Explain that you’re working out some kinks in your receivables and banking arrangements and were wondering when the payment was authorized, signed and sent. If there’s more than a three business day gap in mail-to-deposit timeline, you should ask the factoring company what happened.

Summing Up

Remember, the factoring business is overwhelmingly represented by responsible professionals who understand that they can only succeed if their clients succeed, and that the factoring transaction is based on a level of trust that must be established with every customer.

That said, make sure to do your due diligence, and be prepared to ask questions if you think you’re not being treated fairly.

Stop waiting 45 or 60 days for payments! MP Star Financial can help you get a better handle on your company’s cash flow management. Call for more information. 800-833-3765 Ext. 150.

The post Watch out for this Sneaky Invoice Factoring Trick appeared first on MP Star Financial.

Green Bay, Wisconsin-based Associated Bank has agreed to pay $13 million to settle lawsuits brought in 2009. More than 30 U.S. banks, including Bank of America, Wells Fargo, HSBC, Citibank, JP Morgan Chase, and PNC are accused of similar practices.

In what could fairly be likened to dealing from the bottom of the deck, allegations were made that the banks were deliberately timing the order checks were processed in an attempt to maximize bank overdraft fees. Transactions were allegedly re-shuffled from the highest dollar amount to the lowest, thereby depleting the accounts’ funds more quickly and triggering maximum overdraft fees in the account.

The dubious situation with bank overdraft fees works like this:

An account begins the day with $1000.

Checks are presented for $50, $500, $350, $80 and $250. Processed in order, only the last debit incurs an overdraft, but manipulated from high to low, three checks are tagged as NSF.

Note that in both cases, the account is overdrawn by $230, which is obviously not good. But by re-ordering the order that charges were tabulated, the bank stands to collect three non-sufficient fund bank overdraft fees ($15 to $40 each, depending on the particular bank), rather than one. That’s adding insult to injury.

Update on the Bank of America overdraft lawsuit – and other key updates

The Bank of America overdraft lawsuit is a class action lawsuit; the bank has settled it for $410 million. A Miami judge approved the settlement in November. Facing similar allegations and overdraft lawsuit, Wells Fargo agreed to pay California account holders $203 million last year.

Citibank, JPMorgan Chase, Wells Fargo and HSBC have all announced they will no longer alter the transaction order in a bid to maximize bank overdraft fees. But banks have been accused of other manipulations to bump-up NSF fees, including the slowing of the clearing of deposits, posting withdrawals before deposits made the same day, and debiting accounts on bank holidays when customers cannot make deposits.

The post Dirty Dealing? Bank Overdraft Lawsuits Getting Settled appeared first on MP Star Financial.

Choose MP Star Financial as your factoring company to receive quality invoice factoring business funding with no hidden fees, plus:

• fair treatment when factoring receivables,
• confidentiality: your private information is safe – see our Privacy Policy for more details,
• best practices in accounts receivable factoring, and the best possible options recommended for your company, every time,
• prompt and honest account information and
• truth in advertising standards.

Read more about our invoice factoring challenge and start saving money today.

Get more information about this accounts receivable factoring “no hidden fees” challenge today and discover how it can benefit your company. Then call 800-833-3765 Ext. 150 or email MP Star Financial today to start factoring receivables.

The post Check out our no hidden fees invoice factoring challenge and never pay hidden fees again. appeared first on MP Star Financial.

Before you start factoring receivables, bring a quote and contract from any competitor into MP Star Financial and discover how you can save money by not paying any hidden fees.

Learn more about the MP Star Financial invoice factoring challenge today.

Your accounts receivable factoring quote and contract from another factoring company may include multiple hidden fees, including:

• application fees,
• due diligence fees,
• new client fees,
• money transfer fees,
• lockbox fees,
• termination fees,
• minimum funding fees,
• right to audit fees and
• wire transfer fees.

Other factoring companies also charge unfair fees, such as:

• fees for invoices that the factoring firm chooses not to fund,
• fees for funding fewer invoices than usual during a month and
• fees for same day funding.

Don’t pay those fees! Instead, contact MP Star Financial, the ethical accounts receivable factoring company you can trust, and ask us to review a competitor’s quote and contract to point out the hidden fees. If we can’t save you money, we’ll pay you $250!

Call 800-833-3765 Ext. 150 or email MP Star Financial today to start factoring receivables with no hidden fees.

The post Announcing the no hidden fees invoice factoring challenge: compare a competitor’s quote with your MP Star Financial quote today and save. appeared first on MP Star Financial.

Recently, I offered a competitive cash flow factoring rate to a company but a competitor offered the prospect a better rate. I warned him about hidden fees, but he still chose our competitor.

When the competing cash flow factoring firm attempted to close the deal, the prospect realized they were tacking on significant additional fees. He called this tactic a “left hook out of nowhere,” returning to MP Star for ethical accounts receivable factoring.

Moral of the story: super low, come on rates and fine print are often warning signs of questionable business practices when factoring receivables.

Any factoring company can offer a low starting rate, but it takes a quality firm with ethics and integrity to provide quality service at a competitive receivables factoring rate – every day.

Contact MP Star Financial today by phone ( 800-833-3765 Ext. 150 Pin #150) or by email . Ask to speak to me, Gage, about factoring fee comparisons and ways to grow your business with quality cash flow management strategies.

The post Ethical accounts receivable factoring: compare offers and choose the cash flow factoring company with integrity. appeared first on MP Star Financial.

Another trap that some factors set for clients are the “super low rates” designed to attract unsuspecting clients and tie them up into long-term contracts with countless hidden fees that drive up the cost. In the end, these “super low rates” end up costing more time, money and headaches than standard rates with no hidden fees.

Above all else, you want to deal with a straightforward, honest accounts receivable factoring company that operates with the highest of business funding ethical standards.

MP Star Financial is committed to providing you with quality business funding according to the honorable principles of the International Factoring Association.

This means that in all of our accounts receivable factoring transactions, we:

• treat everyone fairly,
• have no hidden fees,
• keep your private information confidential,
• follow best practices in accounts receivable factoring, and recommend the best possible options for your company,
• promise to provide you with prompt and honest account information and
• follow all truth in advertising standards.

Discover more about the ethical standards of the International Factoring Association followed by our accounts receivable financing company, MP Star Financial. And if you have questions about the structure of an invoice factoring proposal or your current provider’s contracts or practices call me, Gage Price, at 800-833-3765 Ext. 150.

The post Ethical accounts receivable financing: choose the factoring company with the highest standards for trustworthy business funding. appeared first on MP Star Financial.

Feel confident about the business financial help available with a receivables factoring company.

Lots of famous people have given or used factoring loans. King Hammurabi from Babylon was probably the earliest lender, but Christopher Columbus used factoring financial services to buy his now-famous ships. In Italy, the Medici family used factoring to finance art and culture after the Middle Ages ended.

So, if you were wondering if factoring was a newer form of business financing, I suspect that you are not, anymore! If you have questions about factoring or MP Star Financial factoring services, please post a comment below, email me at info@mpstarfinancial.com or call me at 800-833-3765 Ext. 150. I look forward to our conversation.

The post Factoring financial services: our industry can boast of a long and proud history of business financial help – just ask Christopher Columbus! appeared first on MP Star Financial.

Look for the following qualities in an invoice factoring company – and form a quality relationship that brings success to your business.

Choose business funding from a receivables factoring firm that provides:

• Sufficient business funding
• Prompt, fair and accurate reporting
• Quality customer service
• A thorough explanation of the invoice factoring process./li>

If your factoring firm does not provide any of the above, then start shopping around for a quality factoring firm. You deserve to partner with an invoice company you can trust.
Ask MP Star Financial for a receivables factoring quote today.

The post Shop around to find exactly the right receivables factoring company: insist upon integrity and value. appeared first on MP Star Financial.

MP Star Financial applauds the business ethics and integrity of the British factoring company.

According to the publishing company, the business financial factoring firm showed “an understanding of the nuances of our business and most importantly, demonstrated a strong service ethic.” They are looking at additional ways the factoring firm can support their amazing growth.

Let’s talk about how we can support your business success. Request an asset based lending quote from us today. Whether you’re a publishing company, a service industry or a manufacturer, you don’t have to “stop the presses” on your success due to cash flow issues.

The post Thanks to business financial factoring, nobody needs to “stop the presses” on success. appeared first on MP Star Financial.