Accounts Receivable Invoice Factoring FAQs
Customer service is our #1 objective and we are here to assist with answering all of your questions. We have the answers to our most frequently asked questions regarding invoice factoring below.
Factoring is selling accounts receivable invoices for immediate cash at a slight discount.
There are many benefits to invoice factoring and advantages for choosing this funding strategy. Businesses get immediate cash instead of waiting for payment as debt graduates over 30, 60, or 90+ days. Advantages include paying expenses immediately or using cash for growth opportunities. This is just a summary of the benefits of factoring.
The process begins with an application. Terms are then selected to establish the account. You send invoices to us and we issue the advance depending upon the agreed percentage. The remaining balance less the factoring fee is paid to you when the invoice is paid by the debtor.
Factoring terms vary depending on the industry, debtor creditworthiness, and accounts receivable aging. Your specific terms will vary but the average fee is between 2-5%. Your specific fee structure will be defined before factoring.
Application processing and account setup take between 5-10 business days. Advances are typically funded within 24 hours.
Factoring is available for invoices sent to business customers. The invoice must be defined by satisfied terms whereby the goods or service has been provided to and accepted by the customer.
You can still qualify for invoice factoring because we primarily consider the customers’ creditworthiness and not the business.
That depends upon the upfront recourse terms established. You are not responsible for payment under non-recourse terms but you will be responsible for recourse factoring for bad debts.
We are a professional firm with a mission and core values in this for the long haul. We treat your customers well because that is in our best interest. We need you to succeed so we succeed. We are not a debt collection agency and will maintain the best relations when dealing with customers just as you do.
We recommend explaining this as a business strategy whereby you want to focus on core competencies as a business leader while allowing a professional outside agency to manage accounts receivable. You can cite that many Fortune 500 companies use accounts receivable funding to focus on core competencies.
Have Questions? Get Answers.
You might be cash-strapped and interested yet the questions are mounting if invoice factoring is right for your business. Please read our Frequently Asked Questions.
Is Invoice Factoring Right For My Business?
Invoice factoring is an excellent strategy for many businesses across a variety of sectors. Collecting invoice payments is not only a labor-intensive process but it can strangle a business of the cash it needs now. If you want to dedicate fewer resources toward debt collection and access cash on those invoices immediately, invoice factoring can help your business.