What is Non-Notification Factoring?

Non-notification factoring is a form of invoice factoring that minimizes interactions between the factoring company and your client, thereby enabling clients to operate with fewer monitoring restrictions – making the program more user-friendly. We can offer non-notification programs to select clients.

The problem with conventional factoring

One of the main challenges for clients that choose a conventional factoring program is the requirement that the factor be directly involved in your collections process. At the start of the relationship, the factor sends your customers a notice of assignment letter, advising them that your invoices are being financed and alerting them of the new payment procedures they need to implement. Afterward, the factoring company regularly verifies your invoices to ensure that they are accurate and valid.

Both notifications and verifications require customer collaboration, which can sometimes be difficult to get.

How is non-notification factoring different?

In a non-notification program, communications with your customer are minimized so that the factoring company’s involvement is almost transparent. When necessary, direct communication is done using your corporate image and letterhead. This approach improves the customer’s experience. These types of programs are also referred to as “confidential factoring” programs.

Please note that in most non-notification agreements, the factoring company retains the right to notify your client in the event of a covenant breach or serious default.


The obvious advantage of this program is that it is easier to use than conventional invoice factoring due to its minimal factor involvement. Furthermore, the solution is similar to asset-based loans and lines of credit. Clients can use a non-notification program to build a track record and then move on to other types of facilities.

How are invoices verified?

Invoices factored through a non-notification program still need to be verified. However, the factoring company contacts the customer using your corporate letterhead and identity. Phone calls are usually conducted using your corporate name, eliminating confusion or problems when contacting your customer’s accounts payable department and delivering a more streamlined experience.

How are invoice payments handled?

Payments mailed to your company are redirected to a new lock-box address. The payment is made in your corporate name and the envelope lists your company name next to the address. Payments made electronically, via ACH or wire transfer, can be sent to a special deposit account.


Most non-notification programs are slightly more expensive than regular invoice factoring programs. However, the cost increment is usually small.

Who qualifies for non-notification programs?

Non-notification programs have more stringent requirements than conventional plans and are available to companies that meet certain criteria. Your company must:

  • Be in the service or manufacturing industries
  • Invoice a minimum of $250,000 per month
  • Be able to provide 12 months of A/R statistics
  • Be willing to factor all the sales ledger
  • Have a well-diversified client base
  • Have recurring clients (as opposed to one-off transactions)
  • Have reliable controls and reporting
  • Not be at risk of default or bankruptcy
  • Have a reputable management team
  • Meet additional requirements based on your transactions

Get more information

Are you looking for non-notification factoring? We can provide you with a competitive quote. For information, please fill out this form or call (877) 300 3258.