Frequently Asked Questions

Why Do Companies Use Factoring?

Factoring is a product that helps companies that have slow-paying clients. These companies usually can’t wait 30 to 60 days to get paid by clients. Factoring your invoices provides you with cash that you can use to run your business. Companies often use the funds from factoring to: Pay employees Pay suppliers Build inventory Cover […]

How Do PO Finance Companies Pay Suppliers?

One of the most common reasons that companies look for purchase order financing is that they have a large purchase order and they need funds to pay their supplier. Suppliers usually ask for a down payment before fulfilling an order. Consequently, clients ask their purchase order finance companies to cover these down payments so the […]

The Best Way to Collect Unpaid Invoices

Collecting unpaid invoices is probably one of the most tedious tasks of running a business. However, it’s also the most important one. Getting paid on time is vital to the success of a company. It brings in the money to pay employees, suppliers, rent, and yourself. Consequently, it’s essential to handle collections well from the […]

How Does Accounts Receivable Financing Work?

Companies that work with commercial clients often have to wait 30 to 60 days before getting paid. This practice is known as offering “net terms” and is common in commercial and government sales, where clients often demand terms as a condition of awarding a contract. Offering terms creates a dilemma for companies that don’t have […]

How to Get Credit from Suppliers

Most established companies get payment terms from suppliers. This arrangement means they can buy goods or services while paying for them on net-30 terms. Clients usually demand terms from suppliers because it improves their cash flow. They get to use the supplier’s services or products for a few weeks before they have to pay for them. […]

How is a Subordination Used in Invoice Factoring?

In most cases, setting up a factoring account is relatively simple. Once the factoring contracts are signed, the factor files a UCC lien to secure its position against the accounts receivable, sends notices of assignment, and starts funding the account. Usually, this process is done fairly quickly. One of the most common reasons to delay funding a factoring […]

What is a Factoring Company?

A factoring company provides financing to companies that have cash flow problems due to slow-paying invoices. Factors purchase accounts receivable from their clients at a small discount. The client gets immediate funds from the sale of their receivables, which solves their financial problems. The factor, who now holds the receivables, waits until the invoices get […]

Should You Offer Early Payment Discounts to Clients?

An early payment discount is an incentive that companies receive from suppliers in exchange for a quick payment. It is usually offered by suppliers that need to improve their cash position. In this article, we discuss: Why are early payment discounts needed? How do they work? Advantages and disadvantages Are there better alternatives? Cost comparisons […]

How Does Factoring Work?

Factoring is a type of financing that helps improve the cash flow of companies that have slow-paying invoices. This form of financing gives the client access to immediate funds, which can then be used to pay for business expenses and to grow. In this article, we show you how factoring works. We go over every […]

What is Non-Notification Factoring?

Non-notification factoring is a form of receivables factoring that minimizes interactions between the factoring company and your customers. It avoids most concerns associated with factoring and enables clients to operate with fewer restrictions. In this article, we cover: What is non-notification factoring? How does non-notification factoring work? Service costs Qualification requirements Is sales ledger financing […]