Factoring 202

Success as a Commercial Finance Consultant

Success in the Industry

The business of becoming a factoring broker / consultant is a business opportunity like many others.  As business opportunities go, however, few can actually compare with that of factoring broker.

As part of America’s business finance community of lenders, factors are unique in the way they actively solicit referral business and also by the method in which they compensate for a referral.  It is these industry characteristics that, for certain types of entrepreneurs, opens the door for a true “business opportunity” and especially for those with the necessary skillsets allowing them to enter and succeed as business consultants specializing in alternative commercial finance products.

For those that possess the skillsets needed to succeed as an industry consultant or who are willing to train and develop them, a successful industry entry is more than possible and this is an entry that can mean a dramatic change in lifestyle  

Success as a Commercial Finance Consultant

Plain and simple, success as a commercial finance consultant (CFC) means, at least for most, a significant lifestyle change.  For example, you will never again worry about job loss.  As a CFC you control your own destiny, working the hours you want and from any location you desire.  A few years ago, a Princeton University study found that success in business that generated a certain level of income had a direct relationship on the “happiness” of that person.  The amount of income identified, the benchmark, was $75,000 per year.  

So, how does the $75,000 come into play?  The Princeton researchers found that income lower than $75,000 per year did not cause sadness itself, but made people feel more ground down by the problems they already had.  The study found, for example, that among divorced people, about 51% who made less than $1,000 a Factoring broker working from homemonth reported feeling sad or stressed the previous day, while only 24% of those divorced and earning more than $3,000 a month reported the same level of sadness.  Most people will agree, having money has a significant effect on a person’s general happiness and well being.

What It Takes to Earn $100,000 per Year as a Consultant

While Princeton researchers peg the “happiness factor” at $75,000, industry wide, success as Factoring Broker / Commercial Finance Consultant has routinely been gauged at earnings of $100,000 or more per year.  That figure is considered as a “right of passage” for professional, full time consultants.  So what does it actually take to earn $100,000 per year as a factoring broker?  With a standard commission rate of 10% of the factoring fees earned, it will require that you refer clients factoring between $2,000,000 and $3,000,000 of receivables monthly in total.  So, for example, 20-30  clients factoring $100,000 in invoices per month will get a broker of record to the magic $100,000 mark.  As a broker, you will, of course, refer all types of clients and some will be very small factoring just $20,000 to $30,000 per month while others will be much larger, factoring $200,000 to $500,000 per month or more.  The mix is irrelevant.  Your goal is $2,000,000 per month or more in total receivables factored.

Unparalleled Income Security

Another significant benefit of success as a commercial finance consultant is income security.  Unlike most professions, such as a real estate agent, where commissions are paid just once on a sale, factoring commissions paid to brokers are residual and life of account.  it is not unusual, for example, for a broker to earn commissions on a referred account for 3 years, 5 years, 7 years or even longer.  Such income streams paid on a residual basis represent income streams you can solidly count on month after month.  

Working From Any Location

One of the most appealing characteristics of becoming a factoring broker / commercial finance consultant is that you can operate from virtually any geographic location and, rest assured, many brokers do and this is especially true of those out going  brokers that generate a majority of their business from networking and relationship building.  Can you, for example, work and generate a prospective client or two from the pleasurable comforts of a cruise ship while vacationing in the Caribbean?  Absolutely.  Can you rent an apartment and spend the cold winters in Florida or California and the hot summers in the Pacific Northwest or New England? Without question.  Can you travel the U.S. in an RV writing a business blog, meeting business owners, and referring clients?  You certainly can.  Realistically, so long as you have a laptop computer, you can work from anywhere you can get internet access and meet business owners, bankers, accountants, etc.

Almost Any Lifestyle You Can Imagine

So success as factoring consultant and reaching that magic $100,000 per year mark means a lifestyle change for most and a lifestyle that few can imagine.  Job security, income security, and the ability to work from anyplace on the planet are a recipe for happiness found in very few other professions.  And what makes the business of commercial finance consulting so appealing, is that these attributes are obtainable by anyone will to put forth the effort and develop the skill sets necessary for success.