Costs to Set-Up:
Most factors will require that you absorb the initial costs associated with set-up. These costs cover lien searches, lien filing, credit reports and other overheard. A factor my bundle the set-up fees into one application fee or may piecemeal the fees, charging you for each part of their due-diligence.
"Hamilton works diligently to match its fee model to the individual needs of its clientele."
Like other factors, Hamilton presently charges a nominal fee associated with set-up.
The factoring fee is also known as the discount rate, and is what the factor charges for the use of their funds. There are typically two variables factors use to determine their fee: gross amount of the invoice and days the invoice remains outstanding. Given these two variables, there are numerous methods factors use to calculate their fees.
- Flat-Rate Pricing
Some factors do not take time into account, and charge a simple flat rate of the gross amount of the invoice. In this case, the factor would charge you the same fee whether your invoice was out for three, thirty or ninety days.
- Block-Time Pricing
Most other factors calculate their fee based on blocks of time the invoice remains outstanding. Typically, you would be charged one rate for the first thirty days, and another rate for subsequent 10 to 15-day block periods. As in the flat rate model, block time fees mean that an invoice out for 31 days would be charged the same as if it were out for 39 or more days, and so on for each block of time.
- Per-Diem Pricing
This fee model appropriates the fee based on actual days outstanding. In this case, the fee would be calculated at a per day rate. The advantage of this fee methodology is the elimination of "rounding up" a factor's fee since the fee is directly proportional to the amount of time the invoice remains outstanding.
Hamilton works diligently to match its fee model to the individual needs of its clientele. Hamilton offers both block-time and per-diem pricing structures.