What Type of Factoring Broker Will You Be?

Just as factoring, as a method of business finance, is characterized by it’s flexibility, so is the business of brokering factoring transactions.  In fact, there really is no standardized type of industry consultant.  And it’s this industry flexibility that leads us to say that this home-based business is truly an entrepreneur’s dream.  It is an industry and opportunity where anyone and everyone can participate and fit in.

In the factoring industry’s brokering community, you will find…

  • REFERRERS:  Operating on simply an occasional basis, industry referrers generate virtually all of their leads and prospects through networking and most often, networking on social media such as Facebook and Twitter.  Being an industry referrer is also the least expensive way of getting involved in the industry.  It involves none of the standard marketing costs associated with direct marketing such as advertising, postage, printing, etc.  All leads are generated by word-of-mouth.  Although most “referrers” will opt for a website along with a professional domain associated business email, that is usually about it.  Set up cost for referrers is typically between $100 and $200 with no monthly operating costs other than website hosting and perhaps business cards.
  • AGENTS:  Agents (or Sponsored Agents) are typically those individuals who will be operating as a broker on something other than a full time basis and want to “learn the ropes” from a more experienced factoring broker.  As an “agent” of a more seasoned broker, they will usually be provided training, some mentoring, a website, domain, and business email.  Agents can be considered “bird dogs” for their sponsor and will be expected to generate a certain number of leads on a monthly or quarterly basis.  The agent’s sponsor will handle deal placement, lead follow up, etc. and will usually share commissions earned on a 50% – 50% basis.
  • FREELANCE CONSULTANTS:  Freelance Factoring Consultants are standalone brokers and are usually career oriented.  Though they may enter the brokering community temporarily shackled by a 9-5 job, it is their intention to leave that job far behind once they have begun to earn significant commission income.  Freelance consultants will utilize all types of marketing for business development but may gravitate more heavily towards certain types.  Many successful freelance brokers, for example, predominantly use networking and spend the vast majority of their day speaking with lending officers, accounting professionals, and others that can refer meaningful business to them.  Others, such as consultants located in more rural areas and without the opportunities to network, will focus very heavily on direct marketing (direct mail, email, classified advertising, etc.) and usually followed up by telephone contact.

Where Do Most New Industry Broker Start?

Without question, most new to the industry begin as simple referrers or sponsored agents, at least for the first year or so.  Factoring, as a method of business finance, is relatively simple to learn and understand.  Marketing, and especially B2B marketing, is not.  Learning the industry basics with the assistance of the various support products of the IACFB is both low cost and something that anyone can accomplish.  After you learn all about the industry’s nuts and bolts, however, you will then need to immerse yourself in learning how to market and present your new found knowledge to prospects.  Your success as a consultant (as in many other business ventures) will depend very heavily on how much time you devote to developing your marketing and lead generation skills.

Where Can I Find a Sponsor?

If you decide to enter the industry as a part-time agent and are in need of a more seasoned sponsor, the best place to find one is on the IACFB’s Factoring Broker Forums.  In fact, there is an entire forum entitled “Seeking Sponsors, Agents, and Affiliations” dedicated specifically to such needs.  To get access to the forums so you can post an inquiry, you simply only need to “REGISTER” as a guest at IACFB.  To register now, visit www.iacfb.org.

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