Frequently Asked Questions

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 […]

Non-Recourse Factoring Explained

There are two types of factoring financing: recourse factoring and non-recourse factoring. Note that the definition of “non-recourse factoring” varies by company. However, this article helps you understand the product better to determine if it’s the right solution for your company. What is non-recourse factoring? Unfortunately, non-recourse factoring is one of the most misunderstood subjects […]

Why are Invoice Verifications Necessary in Factoring?

Before advancing funds on an invoice, factoring companies always call or email the payer to ensure that the invoice has been received and that it is accurate. This “invoice verification” process can concern clients because it requires the factoring company to speak directly with the customer. Because of this direct contact, clients often wonder if verifications are absolutely necessary. […]

Understanding the Factoring Rebate

Most factoring transactions are structured as the purchase of an invoice in two installments. The first installment, usually 70% to 90% of the invoice, is the factoring advance. The second installment, the remaining 15% to 30% (less fees), is the rebate and is usually paid once the customer pays the invoice in full. At least, that […]

Understanding the Factoring Advance

Most clients are initially perplexed to hear that the factoring advance, which is paid as soon as the invoice is sent to the factoring company, is less than the full value of the invoice. Most factoring companies advance between 70% and 90% as a first installment and hold 10% to 30% of the invoice as […]

How to Offer Net-30 Terms When You Can’t Afford To

Many small business owners cringe when they make a big sale to a customer asking for payment terms – the option to pay an invoice in 30, 60, or even 80 days. Waiting that long for payment can have negative financial consequences for a business without the resources to wait. For example, if you sell products, you […]