There are some common misconceptions about factoring that cause confusion. Here are some common perceptions that we would like to clarify.

Perception: Since the fee is time driven, slow pay invoices cost more.

Reality: This is true, but having a committed administrator can help shorten the pay cycle.

Perception: My customers will be upset by the involvement of a third party.

Reality: We are mindful of your customer relationships. In our experience working with clients and their customers, this has never been a problem.

Perception: I won’t be in control of my business or my money.

Reality: We do not have minimums and do not require our clients to factor every invoice. Our service is a tool for you to utilize to increase your cash flow on an “as needed” basis.

Perception: The interest rate is high.

Reality: Factors do not charge interest. You are discounting the face value of your invoice in order to get cash now. The fee is time driven and assessed per invoice. It is not the same structure as an interest rate.

Perception: "I have a relationship with my bank" or "I don’t want to change banks”

Reality: LDI is not a bank. We are a private factoring firm. We will “partner” with your bank and other finance professionals to assist you in retaining your relationships.

Perception: Factors “take over” the cash management of their clients.

Reality: Not true. Factoring is a business service. At LDI, we do not set minimums for our clients, nor do we require our clients to factor all of their invoices. You are the expert in your business and you determines when you need cash and when you want to factor your invoices.

Perception: Factors are collection agencies.

Reality: Not true. Collection agencies deal with past due invoices. Factors buy active invoices that may not necessarily be past due.