Some business owners have the misconception that factoring companies can finance “troubled invoices.” Factoring improves your cash flow by financing slow-paying invoices. However, it won’t help with invoices that have collections problems. A factoring company will not finance those invoices. This article explains how factoring works, how factoring companies determine credit quality, and why they […]

A vendor guarantee is a tool that can help some companies cover their supplier expenses. Companies that manufacture products but cannot obtain conventional financing commonly use vendor guarantees. This article explains how vendor guarantees work, who can use them, and the product’s limitations. We cover: How to finance supplier costs What is invoice factoring? What […]

Invoice factoring is a business financing solution popular with small and midsize companies. This article helps you determine if factoring is the right solution for your business. We guide you through eight questions to ask before considering a factoring facility. 1. Can my cash flow problem be fixed using factoring? The first question to ask […]

Most prospective clients consider the factoring rate the most important feature of a plan. In fact, pricing is usually the first question clients ask prospective finance companies. Seeking the best rate is a good strategy, but it should not be the only detail you look for. Other parts of a plan are just as important. […]

Most factoring transactions don’t use a full advance. Instead, they advance less than 90% of the invoice and hold the rest as a reserve. This reserve is rebated once the transaction settles. The reserve is an essential component of a factoring transaction. It reduces the chances of having settlement problems. This article explains how the […]

Some companies ask their vendors to provide net-90 days or longer to pay invoices. This request often strains the vendor’s cash flow. Few companies can wait three months to get paid. Vendors often address this challenge by trying to finance these invoices. Unfortunately, most net-90 invoices cannot be financed with factoring. This article explains why […]

Non-recourse factoring is a type factoring financing in which the factoring company assumes the loss if invoices are not paid due to end customer insolvency. It is one of the two common types of invoice factoring offered by finance companies. However, it is also widely misunderstood by clients. In this article, we discuss: How does […]

Every so often, we encounter a prospective client with a tax lien against their company. Usually, the lien is related to delinquent payroll, state, or federal taxes. Having a tax lien is a serious matter that affects your ability to get factoring. This article explains how tax liens work and provides a strategy to secure […]

Factoring companies verify customer invoices as part of the financing process. This article explains why factoring companies verify invoices, how they do it, and how they manage potential issues. We cover: Factoring basics Why are invoices verified? How are invoices verified? What happens if there is a problem? Managing customer expectations 1. Factoring basics Factoring […]