Invoice Factoring Frequently Asked Questions (faq)

Q: IS INVOICE FACTORING A TYPE OF LOAN?
A: NO! Invoice Factoring is defined as the purchase of a company's receivables as opposed to a loan using the receivables as collateral

Q: WHAT KIND OF INVOICE CAN BE FACTORED?
A: Most any business to business invoice/receivables can be factored. The major determining factor is the credit worthiness of your clients. Part of the due diligence is to examine the payment history of your clients. If they have at least a (six) 6 month history of prompt payments, they will be eligible for factoring.

Q: MY BUSINESS IS EXPANDING WITH NEW CLIENTS COMING IN DAILY, DO I HAVE TO WAIT SIX (6) MONTHS FOR THEM TO BE FACTORED?
A: No, a benefit to invoice factoring is having the factor help you make wise credit decisions regarding your customers. New customers will be viewed on a case by case basis. Generally, if you have a solid customer who has solid references, they will be accepted for factoring immediately.

Q: WOULDN'T A BANK LOAN MAKE MORE SENSE?
A: Banks often have restrictive lending requirements relating to cash flow, profitability, equity, and years in business which prohibit them from making loans. Factoring companies are not in the lending business. The decision to purchase invoices is influenced by the quality of your customer base and their performance as opposed to years in business or financial strength.( 3 C