An under-the-radar home business, this highly professional vocation offers one of the most attractive methods of compensation found in affordable home business opportunities.
Certainly one of the most unknown and under-the-radar home business enterprises, the business of freelancing as a consultant in the factoring and alternative commercial finance industry almost stands alone as a career opportunity when gauged against almost all others. This is a career path that not only offers prestige and respectability, but exceptionally high income when measured against almost all other home-based enterprises.
Factoring is a form of commercial finance used by businesses operating on a B2B basis and it is used to speed up the cash flow of rapidly growing companies. In a nutshell, factors advance payment on invoices. This allows small business owners to grant their customers extended terms of payment on invoices, yet as the factor’s client, get paid on sales immediately at the time of delivery. Small business owners use factoring to attract new customers and grow their businesses rapidly.
Moderate start up costs
Residual monthly commission income
Perfect for both part time or full time
Factoring is big business on an international basis with trillions of dollars of financing being consummated each and every year. Like banks, factors have inside loan officers known as Business Development Officers (BDO) that are charged with business generation Unlike banks, however, factors also utilize freelance independent contractors often referred to as “factoring brokers” who work with typically non-bankable small business owners in need of financing. For their referral services, such brokers receive finder’s fees which are based upon the fees the factor earns for services. Since factoring arrangements typically last for many years, referring brokers earn their fees on a monthly, residual basis for the life of the account.
Those seeking “hands-on” training for this vocation will unfortunately find it to be quite expensive, often in excess of $15,000 – $20,000 for a few days.. If you can be considered to be a “self starter” or mobile creative, however, comprehensive training can be had at a small fraction of that cost through the IACFB (International Association of Commercial Finance Brokers) at http://www.iacfb.org
Under-the-radar is the perfect description for this relatively unknown home-based career path and to be certain, it is not a business opportunity for everyone, since very few will come equipped from day one with the skill sets necessary to succeed. Factoring brokers are freelance consultants in every sense of the word and will need to either come equipped with or be willing to invest the time to acquire the professional skills needed to succeed at this exceptionally lucrative home business.
Operating Costs
Operating costs for this vocation are no different than for any other area of consulting. Most factoring consultant will operate from the convenience of a well equipped home office. Beyond that, those entering the industry will need dependable transportation and a wardrobe to match the high professional nature of this business. Costs associated with training for this profession can be steep if you are seeking hands on training. If you are the type of person that can take an idea and run with it, however, the online training found at the International Association of Commercial Finance Brokers website will prepare you well for industry entry.
The Attraction of Residual Commission Income
Without question, what attracts business opportunity seekers to this exciting niche of professional consulting is the method by which they are compensated for their referrals. As a method of business finance, factoring is seldom utilized for a single transaction. In almost all cases, small business owners that elect factoring to smooth their cash flows will finance month after month, year after year. It is not unusual in fact, for a financing arrangement between factor and client to exist for 3 years, 5 years, 7 years or even longer with the factor earning service fees each and every month. As the broker of record for the referral, a factoring consultant shares in the fees for the life-of-the-account. Or in other words, a single referral can generate commissions for a very long period of time. Other than the insurance industry, few businesses can match such an attractive method of commission compensation.
Marketing and Business Development
Those entering this unique profession will find learning the transactional basics of factoring is relatively easy and with proper training, will take only a short time. What makes this a challenging profession is the level of marketing expertise that must be mastered. Industry polls show that roughly 50% of all new factoring clients are generated through networking and referral and 50% are generated as the result of direct marketing. So both methods work when it comes to generating leads for business. Most new factoring consultants focus heavily on networking and build meaningful relationships with other professionals such as bank loan officers, accounting professionals, business attorneys, and others. Those new to the industry must have the skills needed to build such relationships as well as to deal directly with the referrals that come from them.
Is This Home Business Right for You?
Commercial finance consulting is a very professional business that no college education will prepare you for. It’s a challenging business and one for those that can take a concept and run with it. While the commission income is more than attractive, you will need excellent communication skills and will need to both look and act the part of a successful consultant to earn your share of it. With a modest level of training, virtually anyone can enjoy the income generated by landing the occasional factoring client. To truly succeed in the industry and to earn the six-figure income associated with true success, most will need to focus their efforts as much on “personal development” as learning the ins and outs of the industry. For the right individuals, however, this is a home-based opportunity usually well worth facing the challenges that come with it.