Learning Lab
Factoring Deal Submissions and Lender Selection for Referrers
Deal Submissions
Classroom Introduction Video
Factoring Deal Submissions and Lender Selection for Referrers
Submitting a prospective client for financing to a factor is a relatively simple task, and as the referring broker, you only are required to complete two documents. You will need to complete a:
- “Brokers’ Agreement”
- “Company Profile”
The Broker’s Agreement is provided to you by the factor and will be emailed to you by the factor or a BDO (Business Development Officer). It outlines the factor’s submission requirements and, most importantly, the standard commission paid to you as the “Broker of Record” on the deal.
The Company Profile provides the factor with pertinent contact information necessary to contact your prospect as well as some background about the company.
Submitting Your First Factoring Deal
Submitting a prospective client for financing to a factor is a relatively simple task, and as the referring broker, you are only required to complete two documents. You will need to complete a:
- “Brokers’ Agreement”
- “Company Profile”
Selecting a Factor
Based upon your completed “Company Profile“, you will need to select a factor that is suitable for your prospective client based upon the deal’s size and the industry of the prospect.
Calling / Contacting the Factor
When you have a possible submission with a completed “Company Profile“, you will then always call in to speak with a business development officer and request a Broker’s Agreement for a prospective submission. Factors (and the industry) are very honest, but just to be on the safe side, always receive and execute a Broker’s Agreement.
Terms and Conditions Letter
If the factor is interested in your submission and, if after contacting the prospective client opts to go forward with a financing proposal, a short “Terms and Conditions” letter will be provided to your submission to formally outline the factoring facility.
Factoring Contracts
Once the Terms and Conditions letter is signed by your prospect and returned, factoring agreements are forwarded to the prospective client for execution. Once signed and returned to the factor’s underwriting department, the first funding can proceed.
Related Classroom Lessons
When submitting a prospective client to a factor for financing, you will always submit a “profile” of the company and it’s owner. Although your prospect will ultimately be required to complete an application from the factor, your completed “Company Profile” provides the factor with contact information and a little about the company you are submitting. (Click Here)
In most instances, you will request a Broker’s Agreement before submitting a prospective client. Although most are similar, they are not all the same. (Click Here)
When you submit a deal for funding, you will need to select a factor as the funding source. The factor you will often select will be one that prefers to finance your prospective client’s industry and is withing the factors lower and upper funding requirements or limitations. (Click Here)
For some new referrers, they prefer to use IACFB as they partner is submitting their first deal or two. IACFB’s PAL Program has an option for new referrers called PAL Affiliates and which supports an SQL System for submissions. (Click Here)
Earning commissions and receiving commission reports. (Click Here)
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