How Are Invoice Factoring Services Regulated?

A number of different institutions and government entities are responsible for regulating banks and deciding who receives a small business loan and who doesn’t. Such regulatory institutions also protect against fraud, theft and other forms of deception providing a measure of security among customers.

Invoice Factoring Associations

Various Invoice Factoring Associations

Yet with heavy handed regulation, banks are not given a whole lot of latitude in deciding who they can lend to and what the interest rate of such loans will be, according to BusinessWeek.com. They plug in an assessment formula, which involves a FICO credit score among other things, and make a decision to lend based largely on its results. Even neighborhood banks, que solía depender de las relaciones y otros rasgos más subjetivos, no son capaces de proporcionar préstamos con un apretón de manos de la manera que podían Hace años. Algunos creen que es este ambiente de préstamos excesivamente regulada que tiene mantenido a la nación en un ciclo económico plana.

Muchas regulaciones Ver como la pesadilla de los préstamos comerciales

Por estas razones y otras más, empresas han recurrido a las vías menos regulados para obtener financiación de pequeñas empresas. Cuentas por cobrar de factoraje es una forma de pequeñas empresas con calificaciones de crédito defectuosos pueden obtener dinero en efectivo cuando lo necesitan. servicios de factorización de facturas por lo general cuestan más que un préstamo de pequeña empresa. empresas de factoraje trabajan con los clientes de mayor riesgo y proporcionar más libertad preocupante que las empresas que proporcionan financiación a. They regularly provide their factoring services to companies that are turned down by banks.

Factoring Companies Rely on Self-Regulation

Similar to most alternative finance institutions, factorización de facturas companies in the U.S. are not regulated by a formal government body. Most legitimate factoring companies are members of associations where they sort of self-regulate their collective and individual activities. los International Factoring Association and the Commercial Finance Association, por ejemplo, encourage members to share best practices. They also provide training and tools to its members. A new association, Independent Factoring Standards Association, seeks to become “the only non-profit association to actively advocate for a more transparent, self-regulated industry where best practices are rewarded.” Its sentiment is that factoring companies should regulate themselves or else the government is going to do it instead.

According to FactoringGuru.com, no consensus exists among factoring companies and other alternative commercial finance companies regarding greater government or third-party regulation efforts. Some seem to support it by providing greater transparency while others seem to want as little government regulation as possible fearing it could negatively impact the business. As of this writing, invoice factoring services are not regulated in the same way banks are though the possibility exists that this could change.

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Sobre el Autor:

Since 1991 I specialize in Invoice Factoring, PO financing and ABL facilities. I currently work internationally with companies in the US and Canada via our internet marketing division. Specialties: Accounts Receivable Factoring and Payroll Funding for Manufacturing, Petróleo & Gas, Telecomunicaciones, Wholesale Trade Distribution, Staffing and Transportation. I always enjoy helping companies rise to the next level of success.

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