In the world of alternative financing, it is crucial to understand the potential for higher commissions in different transactions. In this article, we will explore and compare the commission structures of invoice factoring and revenue-based financing (RBF) deals. Examining the factors that influence broker commissions in both options can assist brokers in making informed decisions that can maximize their earnings. 

Understanding Broker Commissions 

Broker commissions are an integral part of facilitating transactions in invoice factoring and revenue-based financing. Brokers serve as intermediaries, connecting businesses in need of financing with suitable lenders or factoring companies. In return for their services and expertise, brokers receive compensation or fees. 

Commissions in Invoice Factoring 

In invoice factoring, broker commissions are typically structured as a percentage of the total value of factored invoices. The specific percentage can vary based on factors such as transaction volume, the creditworthiness of debtors, and the duration of the factoring relationship. Brokers in invoice factoring may receive commissions based on a percentage of the factored invoice value. The commission rates can vary, typically ranging from 10% to 15% of the profits, depending on factors such as the industry, client relationship, and the size and quality of the invoices being factored. Consequently, brokers may have the opportunity to earn higher compensation amounts in absolute terms, especially for larger invoices. 

Commissions in Revenue-Based Financing 

Similarly, broker commissions are a part of the financing arrangement in the realm of revenue-based financing. These commissions are usually calculated as a percentage of the cash advance provided to the merchant. Brokers involved in RBF may earn commissions based on a percentage of the total funding amount provided to the business. The commission rates for this financing can vary significantly, but they often range from 2% to 10% of the funding amount, depending on factors such as the risk profile of the business, the terms of the advance, and the broker’s negotiation skills. 

Comparing Broker Commissions between Invoice Factoring and Revenue-Based Financing 

Broker commissions in the realm of alternative financing can vary depending on several factors. The commission structure is influenced by market dynamics, competition, perceived risk, and the complexity of the financing deal. However, one crucial aspect that brokers must consider when assessing their compensation potential is transaction volume. 

Invoice factoring stands out in terms of transaction volume, as it typically involves larger deals compared to revenue-based financing. This means that brokers involved in invoice factoring have the opportunity to earn more substantial commissions. The sheer size of factored invoices can significantly impact a broker’s compensation, offering the potential for significant earnings. Moreover, invoice factoring carries less risk compared to other financing options since there is no loan repayment involved, further enhancing its appeal to brokers. 

On the other hand, revenue-based financing tends to involve smaller funding amounts when compared to invoice factoring. Consequently, the commission potential for brokers in revenue-based financing may be relatively lower in absolute terms. Ultimately, brokers should carefully assess their individual circumstances, market dynamics, and client preferences to determine the most suitable area of focus for maximizing their commission potential. By making strategic choices based on market conditions and their own unique circumstances, brokers can position themselves for success in the dynamic world of alternative financing. 

Other Considerations 

While maximizing compensation is essential, it is crucial for brokers to consider other factors that can impact their earnings. These factors include additional fees and charges associated with invoice factoring and revenue-based financing. Such as application fees or processing fees. It is essential for brokers to seek transparent and detailed information about all potential fees. Overall, this will accurately assess their earnings. 

International Factoring Association (IFA) Conference 

The International Factoring Association (IFA) Conference is a premier event for the factoring and receivables finance industry, bringing together professionals from around the country to network, learn, and explore new opportunities. The upcoming IFA Conference on May 10, 2023, to May 12, 2023, promises to be a game-changer for businesses looking to unlock their cash flow and accelerate their growth, with the chance to meet specialists from CapFlow Funding Group, a leading provider of factoring services.
The IFA Conference is a dynamic platform that offers a unique opportunity for professionals in the factoring industry to connect with industry experts, stay up to date with the latest trends and best practices, and explore new business prospects. With a diverse range of attendees, including factoring companies, asset-based lenders, service providers, and industry professionals, the IFA Conference provides a vibrant and collaborative environment for learning and networking.

IFA Conference Agenda

The IFA Annual Conference is one of the IFA’s flagship events, featuring a packed agenda filled with educational sessions, networking opportunities, and industry insights. Here’s the agenda for the IFA Annual Conference, based on the information available on the IFA website (

Day One: Wednesday, May 10th 

6:30 am – 2:30 pm: Networking Golf Tournament. Location: Bayou Oaks Golf Course, City Park.
8:00 am – 4:00 pm: Factoring Essentials Training Course Session.
11:00 am – 3:00 pm: Networking Opportunity: New Orleans Food & History Tour. Location: French Quarter.
1:00 pm – 4:00 pm: Idea Exchange. This will consist of an informal roundtable for attendees to discuss ideas, trends, and issues in the factoring industry. Attendees may come and go to the idea exchange as they please.
4:00 pm – 5:30 pm: Chapters Reception for Chapter Members in the Northeast, Midwest, Rockies, Texas, Southern California, and Canada.
4:00 pm – 5:30 pm: NEXGEN Reception.
5:30 pm – 7:30 pm: Networking Opportunity: Welcome Reception.

Day Two: Thursday, May 11th 

8:30 am – 9:30 am: IFA / AFA Update
9:30 am – 10:30 am: The New Abnormal: How Global Trends are Affecting Your Business featuring keynote speaker Rich Karlgaard.
11:00 am – 12:30 pm: Thursday Morning Breakout Sessions
Breakout Session #1 — Current Topics in Transportation Factoring
Session #2 — Unusual Events in Factoring to be on the Look-Out
Session #3 — Factoring 101
Last Session – The Do’s & Don’ts of Construction Factoring
3:30 pm – 4:30 pm: Thursday Afternoon Breakout Sessions
Breakout Session #1 — Speed Networking
Session #2 — Roundtable for Senior Executives
Session #3 — NEXGEN panel
Last Session  – Inventory Financing
Last Session – The Art of Finding the Appropriate Lender
5:00 pm – 6:30 pm: Roof Top Happy Hour
9:00 pm – 11:00 pm: Tax Guard After Party

Day Three: Friday, May 12th 

9:00 am – 9:30 am: AFA Congressional Viewpoint
9:30 am – 10:30 am: What the Economy Can Do for Factors with keynote speaker Peter Ricchiuti.
11:00 am – 12:30 pm: Friday Morning Breakout Sessions
Breakout Session #1 – Reports from the courts
Session #2 – Canadian Factoring Landscape
Session #3 – Roundtable for Small Factors
2:00 – 3:00 pm: Friday Afternoon Breakout Sessions (Group A)
Breakout Session #1 – Effective Growth Strategies (Part 1)
Session #2 – Legal Panel
Session #3 – ERC Workshop for Factors
Last Session  – Fraud/Risk Management Panel
3:30 pm – 4:30 pm: Friday Afternoon Breakout Sessions (Group B)
Breakout Session #1 – Effective Growth Strategies for Factors (Part 2)
Session #2 – Commercial Finance Disclosures
Session #3 – Operations Roundtable
Last Session  – International Updates

Meet CapFlow Funding at IFA!

At the upcoming IFA Conference, CapFlow Funding Group will be a key presence, showcasing its innovative factoring solutions that have been transforming the way businesses finance their operations. As a leading provider of factoring services, CapFlow Funding Group offers a range of flexible financing options that can help businesses unlock their cash flow and fuel their growth.
Meeting CapFlow Funding Group specialists at the IFA Conference can be a game-changer for businesses looking for reliable and efficient financing solutions. The CapFlow Funding Group team brings a wealth of experience and expertise in the factoring industry, and they are known for their personalized approach to understanding and addressing the unique financing needs of businesses of all sizes. Attendees may schedule a one-on-one meeting with one of our team members at:

Products and Services Offered by CapFlow

CapFlow Funding Group’s factoring solutions are designed to be flexible, scalable, and tailored to the specific needs of each business. They offer factoring services for various industries, including manufacturing, distribution, staffing, and more. With their expertise, CapFlow Funding Group can provide businesses with the financial flexibility they need to navigate through challenges, seize opportunities, and unleash their full potential.
In addition to their factoring services, CapFlow Funding Group also provides value-added services, such as credit checks, accounts receivable management, and invoice processing, to help businesses streamline their operations and improve their cash flow management.
The IFA Conference provides an excellent opportunity to meet CapFlow Funding Group specialists and learn more about how their factoring solutions can benefit your business. Their team is known for their professionalism, responsiveness, and commitment to helping businesses succeed. By partnering with CapFlow Funding Group, businesses can access a reliable and efficient source of working capital, gain financial flexibility, and unlock their business potential.

Positioning your business in an unpredictable economy

Positioning your business in an unpredictable economy means taking proactive steps to ensure that your business can survive and thrive in a highly volatile and uncertain market. In an unpredictable economy, factors such as fluctuations in consumer demand, changes in government regulations, rising costs and interest rates, and global events can significantly impact businesses. 

Positioning your business involves analyzing the market trends, understanding your target audience, and developing strategies that can help your business stay competitive and adapt to the changing economic landscape. This may include diversifying your product or service offerings, investing in innovation, building a strong online presence, focusing on customer retention, and closely monitoring your financials. 

Why it is important for a business owner to be prepared for changes

As a business owner, anticipating and adapting to changes in the economy is essential. The economy is unpredictable, and sudden changes can pose significant risks to businesses. To mitigate these risks, it’s important to anticipate potential problems and implement strategies to address them. This approach enables you to minimize the impact of economic changes on your business. Moreover, market conditions can shift rapidly, and being prepared enables you to adapt by developing new products or services, changing your marketing strategy, or adjusting your pricing. Staying competitive in your market requires taking advantage of new opportunities that arise due to these changes. 

Necessary steps for your small business to take during economic downturns

Limit non-essential spending 

Limiting non-essential spending can be a smart financial decision for individuals and businesses, especially during uncertain economic times. This can help preserve your cash flow, which is crucial for businesses to stay afloat. By conserving cash, businesses can maintain their financial stability and better weather any economic downturns. 

Furthermore, it can help reduce debt. By avoiding unnecessary expenses, you can allocate more money toward paying off debts. By saving money and investing in your business or personal growth, you can position yourself for long-term success. 

Build and maintain relationships with customers

Building and maintaining relationships with customers can be especially beneficial for small businesses during economic slumps.  It can increase their loyalty and likelihood to continue doing business with you. This can help you retain customers even during challenging economic times when many businesses may struggle to attract new customers. Satisfied customers are more likely to refer your business to others.  

Moreover, you can also gain valuable insights into your consumers’ needs and preferences. That way you can adapt your products or services to better meet their needs and stay competitive in an unpredictable market. 

Consider alternative financing options

Considering alternative financing options during an unpredictable economy can be a smart financial decision for businesses. Here are some reasons why: 

1. Diversify your funding sources: Relying on a single source of funding can be risky during an unpredictable economy. Alternative financing options, such as merchant cash advances, credit card splits, and invoice factoring can provide additional sources of funding and reduce dependence on traditional financing methods. 

2. Flexible terms and conditions: Alternative financing may offer more flexible terms and conditions than traditional financing methods. For example, some alternative lenders may be more willing to work with businesses with lower credit scores or offer more flexible repayment schedules. 

3. Quick access to capital: These options typically provide faster access to capital than traditional financing methods. This can be especially important for businesses that need to act quickly to take advantage of opportunities or address unexpected challenges

Why managing rapid growth is important for your business 

Managing rapid growth is crucial for the long-term success of any business, for several reasons. When a business experiences rapid growth, it may struggle to allocate resources effectively. Without proper planning, the business may overcommit resources to a particular area, leaving other areas underfunded and potentially compromising the long-term stability of the company. Furthermore, rapid growth can put a strain on a company’s cash flow. Businesses may need to invest heavily in new equipment, facilities, and human resources to keep up with demand. Without careful planning, this could lead to cash flow problems, which could ultimately jeopardize the business’s future. 

Overall, managing rapid growth requires careful planning, resource allocation, and an eye on the long-term goals of the company. Failure to manage rapid growth can lead to issues that could jeopardize the future of the business. 


What steps can be taken to manage rapid growth? 

There are several steps that businesses can take to manage rapid growth effectively: 

1. Develop a Strategic Plan: A strategic plan should outline the company’s long-term goals and the steps necessary to achieve them. It should include a detailed analysis of the resources needed, potential risks and opportunities, and a timeline for achieving milestones. 

2. Focus on Cash Flow: Managing cash flow is critical during periods of growth. Businesses should develop a cash flow forecast that considers projected income and expenses, as well as potential risks and opportunities. They should also explore options for financing growth, such as bank loans or venture capital. 

3. Hire the Right People: Rapid growth often requires hiring additional staff. It’s important to ensure that new employees are the right fit for the company’s culture and have the skills necessary to contribute to the growth of the business. A robust recruitment process can help to identify the best candidates. 

4. Invest in Technology: Technology can help businesses to manage growth more effectively. For example, investing in automated systems can streamline processes, reduce errors, and increase efficiency. Technology can also provide insights into customer behavior and market trends, which can inform business decisions. 

5. Maintain Quality Control: Maintaining quality control is critical during periods of rapid growth. It’s important to ensure that products or services meet the same high standards as before the growth period. This can be achieved by implementing quality control processes and regularly monitoring the quality of products or services. 

6. Keep Communication Open: Communication is key during periods of rapid growth. It’s important to keep employees, investors, and customers informed about the company’s progress and plans. Open communication can help to build trust and loyalty, which can be critical to the success of the business. 


How can alternative financing help manage rapid growth? 

Alternative financing can help manage rapid growth by providing businesses with access to capital quickly and easily, without the need to go through traditional financing channels, which can be slow and cumbersome. By accessing alternative financing, businesses can invest in growth opportunities, hire new staff, and purchase equipment, which can help them to manage rapid growth more effectively. Here are some examples of alternative financing options that can help manage rapid growth. 

Invoice factoring  

Factoring involves selling outstanding invoices to an alternative financing company in exchange for immediate cash. It can be an effective way to improve cash flow and access capital quickly. This type of financing can be an excellent option for managing growth because it provides businesses with immediate cash flow without adding to their debt burden. It can help companies to maintain operations during periods of growth, pay suppliers and employees on time, and invest in growth opportunities.  

Revenue-based financing/Merchant Cash Advance 

Revenue-based financing involves raising capital in exchange for a percentage of future revenue. This type of financing typically involves a revenue-sharing agreement rather than fixed payments, which can be beneficial for businesses that have fluctuating revenue streams. This allows businesses to make payments that are tied to their revenue, which can be a more sustainable way to manage debt during periods of growth. Additionally, revenue-based financing often does not require collateral or personal guarantees, making it a less risky option for businesses. 

What is alternative financing for small-medium sized businesses? 

With their stringent requirements and high-interest rates, small to medium-sized businesses are having a hard time securing a loan from traditional banks. Good thing that there are alternative financing options that businesses now can avail of to get the funding they needed.  

What, then, is alternative financing? Alternative financing means obtaining funding from non-traditional funding or non-bank institutions. It has a different process of approving credit or funding, and the terms and conditions are different than those of a traditional bank. It caters to businesses of all magnitudes but small to medium-sized businesses could leverage the advantages that alternative financing brings.  


Common misconceptions of alternative financing 

While alternative financing has been around for quite some time already, there are still some misconceptions about it due to a lack of exposure to the products. Let us discuss here to dispel these misconceptions. 

You need high margins to receive alternative financing 

Small to medium-sized businesses are wary to try alternative financing because of the myth that they need to have high margins to be able to have access to these kinds of financing. This is definitely not the case. An alternative lender caters to businesses of all sizes, including small and medium-sized enterprises. Others even prefer small businesses as clients. Don’t let your current business margin faze you! 

It is harder to qualify for alternative financing over traditional bank loans 

This myth is the one that stops small to medium-sized businesses in their tracks. But the truth is, alternative financing employs a more streamlined process. While traditional banks would require good credit standing, some alternative financing would not even look at credit scores in screening your business. Some would only require a list of your current customers, or even expected revenue streams. Seeing as these requirements are not difficult to provide, it’s easy to say that small to medium-sized businesses could opt for alternative financing easily. 

Alternative lending is unregulated 

Traditional banks usually have regulators that oversee their business. Seeing as these alternative financiers are not banking institutions, it’s easy to understand why many would think that they are unregulated. However, this is far from the truth. Transactions involving alternative financing involve contract and commercial laws and require adherence to federal and state laws regarding financial transaction disclosures and other regulatory issuance.  

Borrowing from an alternative lender will hurt your credit score 

Credit scores pertain to your ability to meet your obligations to your creditors. A good credit score means that you were able to pay your dues on time and maintain a good record with your banks. Credit score entails your ability to pay your debts; alternative financing on the other hand is revenue-based financing, without the business incurring debts. Since there are no debts involved, transactions involving an alternative lender would not in any manner affect your credit score. 


Why alternative financing options are needed by businesses 

These alternative financing options fill the gap that traditional banks leave: they provide the much-needed funding for small to medium-sized businesses that are not qualified to avail loans from traditional banks, or even if qualified, are unable to do so due to a myriad of factors. It gives these businesses a lifeline that they can hold on to to be able to pursue their business goals, as well as access to additional funding for any immediate or urgent needs of the business. This is why these common misconceptions should be put to rest so more businesses would be encouraged to try and explore these alternative options. 


Types of alternative financing you may want to explore 

There are already lots of alternative financing options out there that businesses can consider. Bearing in mind what’s best for the company. Here are some options: 

Invoice financing – this alternative financing involves the sale of a business’s unpaid invoices to factoring companies. They pay a certain percentage of the invoice amount to the business. 

Merchant cash advance – under this financing, the business owner receives a lump sum amount from the financier. In return, the business owner will pay the financier a certain portion of its revenue from credit card and debit card sales.  

Credit card splits – in this financing, businesses can have a credit card split agreement where the financier will provide a lump sum amount for the business’ urgent funding needs. In return, the financier will have a portion, or “split,” on payments made to the business using a credit card.


These are but a few examples of alternative financing that are available for businesses. Moreover, it is not uncommon nowadays for banks to partner with alternative financing providers. This way, businesses need not navigate on their own to find the best funding that would suit their needs. For businesses, now is the best time to explore and get to know more about these alternative financing options. 

The alternative financing industry 

Like any aspect of society, the financing industry experiences fast-paced changes. Before, businesses turned to traditional financing institutions such as major banks to fund their capital expansions. However, many businesses still were unable to access this kind of financing. As such, in the past few decades, new and non-traditional financing industries emerged to address this gap. While alternative financing has been around for quite some time, it’s stepping into the spotlight nowadays because of the more stringent requirements and higher interest rates that banks are imposing. This is expected to continue for quite some time, considering that the economy has been experiencing some contractions recently, and these contractions are expected to pervade at least for the time being due to different factors. What, then, is alternative financing? What are the different funding options that businesses can consider? And lastly, what’s new with the alternative financing industry this year? Let us dive in. 


What is alternative financing? 

Alternative financing pertains to funding sourced from non-traditional financial institutions like a bank. Unlike traditional funding institutions, alternative financing companies have more relaxed requirements, shorter or more variable tenors, and are purpose specific.  

The realm of alternative finance offers lots of advantages, especially to small businesses. It serviced the segments that traditional funders are unable to cater to due to certain restrictions, such as requirements for collateral, credit scoring, and interest impositions.  

There are different funding options that businesses can explore. Each has a different offering and can suit a wide array of business needs. Here are a few examples: 

These are just some examples. Innovative financing options emerge in a quick fashion, driven by the need of businesses. 


alternative finance industry

Equipment financing offers businesses the ability to acquire necessary equipment without having to bear the financial burden of paying for it upfront. 


What is changing this new year in the industry? 

While it’s true that alternative financing has been around for quite some time, we will find that this new year still has a lot in store for businesses to look forward to, may it be in the line of service improvement, or use of advanced technology. 

Finance industry leaders agree that the alternative finance industry will see growth this year. With more businesses looking for alternatives to banks to fund their ventures, alternative financing will be their next option.  

On the part of the funders, technology shall play a bigger role in optimizing their operations and further improving service. While there is a predicted dip in the tech industry this year, odds are optimistic that it will be overcome this year. Nevertheless, the alternative industry’s use of technology will bring more benefits to businesses and the industry.

What are alternative financing strategies? 

Alternative financing is funding provided for businesses outside of traditional bank loans. Alternative lenders offer a range of financing products with flexible requirements. Traditional bank loans tend to be a lengthy and difficult process to qualify for. Fortunately, there are other opportunities available for businesses with some alternative financing strategies 


Invoice Factoring 

Invoice factoring is an alternative financing process where a business sells their invoices to a factoring company. In exchange for selling their invoices, the factoring company advances a large percentage of the money owed to the business. They also directly manage payment with your customers. Once the invoice has been completely paid off, the factoring company will send you the remaining balance, minus a small factoring fee for their service.  

Invoice factoring provides businesses with immediate, ongoing cash flow. This will allow businesses to meet their short-term financing needs instead of having to wait 30-90 days to receive payment on invoices. Furthermore, credit score, collateral and loan history are not a major factor in getting approved for factoring. This makes receiving funding much faster and more flexible. 



Crowdfunding is another alternative source of funding that allows for businesses to raise money from investors. Through the use of social media and crowdfunding websites business owners have the potential to meet investors and raise funding. This strategy allows businesses to raise money without resulting to venture capital investors. However, if the funding goal is not met, any finance that has been pledged will be returned to the investors. 

With crowdfunding, businesses rely on marketplaces to provide funding for their operations.


Merchant Cash Advance 

With a merchant cash advance, an alternative finance company provides businesses with a lump sum upfront, which is then repaid with a percentage of the business’s sales. This option is best for small businesses that need immediate capital. A traditional MCA is structured where the provider deducts a daily or weekly percentage of your debit and credit card sales until the advance has been fully repaid. This funding can be provided within 24 hours and repayments can be adjusted according to how your business is performing.  


Revenue-Based Financing 

Another type of alternative financing strategy is revenue-based financing. Revenue-based financing is a loan that a business pays back with a part of their future revenue. This strategy helps businesses successfully raise the capital needed without sacrificing their equity or any collateral. It also does not involve interest payments – repayment is a predetermined amount plus a flat fee. Monthly payments increase or decrease to match the natural fluctuations of a business, meaning you will not be burdened by payments you cannot afford.  


Benefits of revenue-based financing include it being cheaper and more flexible than other funding options, your business will retain more ownership and control of your business, there are no personal guarantees, payments are flexible, you may have a faster funding timeline, and more.