Let’s face it—factoring is one of the most powerful and accessible careers in commercial finance. With minimal startup costs, and the potential for long-term residual income, it’s no wonder so many new brokers are drawn to this industry.
But despite all its advantages, many new brokers fail to gain traction. Not because the opportunity isn’t real—but because they skip over the most important foundational steps. These are not “advanced” strategies—they’re the bare minimum required to succeed.
So why do so many give up within a few months? Here are the top five reasons new factoring brokers fail—and how you can avoid making the same mistakes.
Not Connecting with Local Bank Lending Officers on LinkedIn
If you do nothing else in your first 30 days as a broker—do this. Bank loan officers are some of the most valuable referral sources in commercial finance. When a business applies for a line of credit and doesn’t qualify, that loan officer needs another option to recommend—and that’s where you come in.
But if you’re not showing up on LinkedIn as a local commercial finance professional, they won’t find you. And if you’re not actively connecting and engaging with them, they won’t know you exist.
The fix:
Build a professional LinkedIn profile, publish helpful articles, and connect with at least 10–15 bank lending officers in your metro area. Engage with their posts. Send a helpful message. Be visible, be valuable, and stay on their radar.
Not Investing in Content Marketing (Especially Blog Posts)
You have a website. Great. But what are you doing with it?
Too many brokers think that just “having” a website is enough. It’s not. In today’s trust-based economy, you need to publish content that proves your expertise. Your blog is where you educate your prospects, show that you understand their challenges, and build credibility as a financing specialist.
If your website blog is empty or outdated, it signals to a business owner:
“This person isn’t active. They’re not serious.”
The fix:
Commit to publishing at least 2 blog posts per month. Use tools like ChatGPT to speed up the writing process. Focus on topics like cash flow challenges, business financing myths, and how invoice factoring works. Then push those posts to your LinkedIn and email subscribers.
Not Developing an Active “I Pay for Referrals” Page on Their Website
Referral marketing is the lifeblood of a successful factoring broker. The best brokers build networks of referral partners: accountants, business consultants, web developers, commercial realtors, and yes—loan officers.
But new brokers fail because they don’t make it easy to refer. Your website should have a clearly labeled “Referral Partner Program” page that:
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Explains how referrals work
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Lists the types of clients you serve
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Shows what you pay for successful referrals
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Includes a simple lead submission form
The fix:
Use your website to actively recruit referral partners. Promote the page in your emails, on social media, and during local networking events. Let people know they can earn $500, $1,000—or more—for introducing you to just one client.
Not Joining at Least One Local Community Organization
The finance business—like all business—is about relationships. And relationships are built in person. Yet far too many new brokers sit behind a laptop and think they can grow just by sending emails or writing posts.
If you’re not showing up in your community—you’re invisible.
Joining just one local group like the Chamber of Commerce, a Rotary Club, BNI, or industry-specific meetups will instantly plug you into a network of potential referrers and clients. These organizations give you face-to-face access to the people who matter.
The fix:
Pick one group. Attend regularly. Offer to speak or sponsor an event. People do business with people they know and trust—and those relationships often start with a handshake.
Not Investing in a CRM (Customer Relationship Manager)
This may be the most costly mistake of all. Without a CRM, you are guaranteed to lose leads, forget follow-ups, and waste opportunities.
Every broker who’s been in the business for more than a year will tell you the same thing: your contact list grows fast. Between clients, referral partners, lenders, and prospects, you’ll quickly have hundreds—if not thousands—of names and conversations to manage.
And you simply can’t do it with a spreadsheet.
The fix:
Choose a CRM system from the beginning. Pipedrive, Less Annoying CRM, and HubSpot (free version) are all good options. Use it to organize your leads, schedule follow-ups, and track progress. A good CRM becomes your second brain, and it’s critical for building long-term commission income.
Remember…Success Requires Structure
The truth is, factoring brokers don’t fail because the business model is flawed. They fail because they treat the business like a hobby—not a career.
If you want to succeed, treat your consulting practice as a real business from day one. Build your LinkedIn network. Publish content. Recruit referral partners. Join your community. Get a CRM.
Because those who do?
They’re the ones who stick around.
They’re the ones who land big accounts.
They’re the ones who earn six figures in residual commissions.
Are you building a real business? Or just testing the waters?
If you’re ready to succeed as a PAL Associate, start by doing what most brokers skip. Your future self will thank you.