Frequently Asked Questions

We consider a factorable business to be any company that provides goods or services to a credit-worthy commercial customers.

Factoring companies buy invoices from their client. A factoring company will then pay the client up to 80% of the face value of the invoice(s). The factoring company collects the total invoice amount due from the client’s customer (the debtor), and passes on the remainder of the funds, less a fee back to the client.

Yes. A start-up business is a good fit as long as its customers have good payment history.

This depends on the factoring company. Underwriting requirements are set by the factoring company, itself, and may differ from one to another.

All payments for factored invoices are sent to the factoring company, directly.

No. Factoring is based on the invoice’s face value and the customer’s ability to pay.

Yes and No. This really depends on the factoring company, itself, and may differ from company to company. For instance, sometimes the customer will need copies of missing invoices or have questions. In some cases, the factoring company will provide of this information

This is your customer. If you are a trucking company, your customer is the party who hired you to transport their goods. If you are a publication, your customer is the party who has paid for advertising space. If you are an employment agency, your customer is the party who is looking for new employees and has hired you to find them.

Does my business need to have good credit?
Since your customers will be paying for their invoices directly to the factoring company, not you; factor approval is based on their credit and their ability to pay.

No. You can factor as little or as much as necessary, given, that your customers qualify and their invoices meet underwriting guidelines.

No. Only current business invoices will be considered.

Most invoices can be funded within 24 hours of approval.

Fees are determined based on your industry, the creditworthiness of your customers, how quickly your invoices turn, and
monthly factoring volume.

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The sale of accounts receivable invoice(s) to a factoring company by a business in return for immediate funds.

No. Collection agencies work with businesses that have customers who have not paid their bills. Factoring companies generally work with businesses that have customers who pay on time.

Factoring is a great fit for manufacturers, distributors, trucking companies, technology based businesses, business services, and employment agencies. Factoring can also work well with other types of business.

If an invoice does not meet the requirements you will be informed, immediately. The invoice will be returned to you and the factoring company will not buy it.

Yes. Location is not an obstacle.

Generally, the factoring company will handle the invoice mailing, collection of monies, and notification to the business that the invoice has been paid.

Invoices that are unpaid are charged back to you. Once an invoice has been charged back, it is no longer the factoring company’s responsibility. It has now become your responsibility to collect the monies.