Re: factoring services

Larson Rider wrote:
>> You don't necessarily need all the services (and costs) of an agency to
>> solve that problem. There are companies that provide "invoice factoring"
>> like services for contractors, where they handle the collection and
>> smooth out the cash flow. Costs for such services are around 5%.
> 
> 5%?! Wow, where did you find that?

http://www.aquentfinancial.com/


> ...the lowest is 6% of the total receivable and you have to meet
> minimums to get that low rate...

According to:

http://www.aquentfinancial.com/pricing.html

their rates run from 2.5% to 20% depending on how long it takes the 
client to pay.


> BTW, ALL of them have a contract clause to chargeback to you
> [invoices considered] uncollectible.

Correct, or at least that's true for Aquent. So in other words, services 
like this don't remove the risk of a non-paying client. They only smooth 
out cash flow (which is what I originally said).

Aquent seems to have struggled with their business model over the years 
and frequently changes their terms. When they first started out they 
actually did assume the risk for invoices.

I haven't used them in several years, and it looks like their policies 
have changed yet again. They now do business only with companies 
(consultants) billing $250K per year, which puts them out of the range 
of most consultants.


> ...I think you are quoting hearsay or not fully investigated figures.

I was quoting actual figures for services I personally used at one time. 
I haven't had a need for these services in several years, so I don't 
know what's currently available on the market.


> For 1099 or corp. to corp. ... most are 11%... 
> Lowest W2 factoring I have found is 20%.

Thanks for the updated figures.

Still, for a consultant seeking to go it alone, those costs are still 
substantially lower than the alternative of using a full service agency, 
which you previously said will typically markup rates in the 
neighborhood of 50%.

  -Tom

-- 
Tom Metro
Venture Logic, Newton, MA, USA
"Enterprise solutions through open source."
Professional Profile: http://tmetro.venturelogic.com/