Frequently Asked Questions

Best Factoring Rates – How To Get Them?

Most companies seeking factoring use a shotgun approach in which they try to contact as many factoring companies as possible and submit as many applications as possible with the hope of getting the best factoring rate. While this approach is common, it seldom works. A better approach is to evaluate factoring in a systematic way and […]

Factoring – What is a Notice of Assignment?

Many clients ask, “Will my customers know that I am factoring?” The short answer is yes. Factoring is not completely transparent to your customers; they will know that you are financing your invoices. The factoring company will not necessarily be calling them constantly, but they will know about the relationship. The first communication between your client and the finance company […]

Invoice Factoring vs Collections Problems

Is invoice factoring a good solution for companies with collections problems? It depends on what type of collections problems your company is having. If your customers have good commercial credit but are taking longer to pay, then factoring might be be a good solution for your company. On the other hand, if your customers have […]

What Are Vendor Guarantees?

Let’s review a hypothetical scenario. A manufacturing company gets a very large purchase order from a reputable company. The order is so large that, to fulfill it, the manufacturing company needs to place substantial orders with its suppliers. Now let’s add a twist: let’s say that the manufacturing company does not have enough credit with its suppliers […]

Is Invoice Factoring Right For Your Business?

Invoice factoring is a business financing solution that has been gaining popularity as an alternative to conventional business loans. This article helps you determine if invoice financing is the right solution for your business. We guide you through five questions to ask before considering a factoring facility. 1. Can my cash flow problem be fixed […]

Are Factoring Rates That Important?

The first thing that most prospects want to know when they speak to a factoring company is the price of their services – the factoring rate. Many prospects focus on this aspect, and many make the decision based solely on rate. Rate is not the only – nor most important – thing Although rate is an […]

Is Working with a Local Factoring Company Better?

Whenever a sales team member answers a call, one of the first questions they usually have to answer is, “Where is your office located?” Clearly, many companies prefer to deal with a local business because, to them, location seems important. Furthermore, many prospects are small businesses who like to operate based on personal relationships – the […]

Why Do Factoring Companies Hold a Reserve?

Most conventional factoring transactions are structured as two disbursements. The only exception to this rule is freight bill factoring, in which trucking companies can sometimes get a full advance. For most transactions, however, the standard is two disbursements. The first payment, the advance, can be as high as 85% of the invoice value, and is made once the invoice […]

What is Spot Factoring?

In most conventional invoice factoring relationships, the prospect uses the facility regularly. Depending on the client’s needs, they may factor invoices on a weekly, monthly, or some other regular basis. On the other hand, a “spot factoring” transaction occurs when a factoring company buys a single invoice as a one-time purchase. Both the transaction and the finance […]

Why are Net-90 Invoices Not Factorable?

One of the ways that larger companies coped with the 2008 – 2009 recession was to extend invoice payment terms. Companies that used to pay in Net-30 days started paying in Net-40 or even in Net-60 days. Some companies stretched this practice and started paying in Net-90 days or beyond. Three problems with net-90 invoices […]