3 Prepare Comprehensive Financial Statements
Switching

When your current factoring company no longer fits the bill or you've discovered a more advantageous offer, it might be time to consider a change. The thought of swapping your invoice factoring provider can seem daunting, but with careful planning and execution, the transition can be seamless. Here are some crucial steps and considerations, brought to you by the experts at Red Fox Finance.

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1 Review Your Existing Contract
Review Your Existing Contract

Your first step should always be a thorough review of your present factoring agreement. Pay particular attention to any clauses relating to termination - notice periods, termination fees, or minimum contract durations. This knowledge is vital in avoiding unexpected costs or disagreements when leaving your current arrangement.

2 Understand Your Reasons for Change
Understand Your Reasons for Change

Knowing why you're looking to switch factoring companies is key to finding a provider better suited to your needs. Whether you're after lower fees, superior customer service, more generous advances, or more flexible conditions, being aware of your priorities will direct your research and discussions with prospective new factors.

3 Research and Choose Your New Factoring Company
Research and Choose Your New Factoring Company

With a clear understanding of your requirements, you can begin exploring potential factoring companies. Consider aspects like fees, advance rates, contract terms, industry-specific experience, and overall reputation. Speaking with their current clients or reading reviews can provide valuable insights. After you've shortlisted a few, make contact to discuss their services and your needs.

4 Negotiate Your New Agreement
Negotiate Your New Agreement

When you've selected a new factoring company, the next step is negotiating your new agreement. Remember, it's essential to carefully scrutinize all terms, and consider consulting with a financial or legal advisor. As you've already experienced factoring, you're in a good position to discern what conditions best serve your business.

4 Notify Your Current Factoring Company
Notify Your Current Factoring Company

Once you're confident in your new factoring agreement, you can proceed with terminating your existing one. Make sure you're complying with all relevant notice and termination terms to steer clear of any penalties. Keep your communication clear and professional, explaining your reasons for moving, if you see fit.

6 Inform Your Customers
Inform Your Customers

Keeping your clients in the loop is crucial since the factoring company you use directly impacts them. Ensure you give them plenty of advance notice and provide any necessary new information, such as updated payment directions.

7 Transition Your Accounts
Transition Your Accounts

With your customers informed, coordinate the transition of your factored invoices from the old company to your new provider. Depending on your unique situation, the timing and complexity of this process can vary. Your new factoring company should lend a helping hand to ensure a smooth transition.

8 Keep a Close Watch
Keep a Close Watch

Monitor the transition process closely to identify and tackle any arising issues early. This includes making sure your customers are processing payments correctly, and that you're receiving the expected advances from your new factoring company.

The decision to switch factoring companies can dramatically enhance your business's cash flow and growth opportunities. While the process requires consideration and effective management, finding a factoring partner that aligns better with your needs can certainly make it worth your while. Your meticulous attention to detail, transparent communication, and due diligence will contribute to a successful switch.

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Switching

Evaluate and understand the potential benefits of switching your Invoice Finance provider. If you're new to this realm, begin by understanding how to start your journey. Preparing for a switch or a fresh start requires knowledge of the necessary documentation. Additionally, get insights on services and associated fees. Our FAQ section can provide further guidance.

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