Factoring: Some More Common Concerns
Over the years there have been many companies considering factoring that have had concerns and questions in common. Here are some of the questions we hear most frequently. Let’s look at 6 common questions concerning factoring in general, as well as assignments, billing, and posting of your accounts receivable invoices.
1. Do I lose control of my billing and posting?
No. Here’s how the process works: You continue to create your invoices, and the factoring company posts the payments when they get paid. The factor provides you a posting report, and many times you can view the paid and outstanding invoices daily via the Internet.
2. What if a payment is made on an invoice I did not factor?
Even if the payment is sent to the factor, you still receive 100% of the payment. If the invoice was not factored, the factor simply passes on the payment to you and no fee is charged.
3. How often can I factor my invoices?
You determine your factoring schedule based on your cash-flow needs and your invoices. There is no restriction on how frequently you can factor if you have a verified invoice for goods and services provided.
4. Can I qualify for factoring with a compromised credit history?
Yes. Most factoring companies look at the credit history of your customers to determine if and when they pay their invoices. This helps them determine when they will receive payment on the invoice. The factor will probably not even look at your personal credit history.
5. How Long Does it Take to Get Funded the First Time?
You will likely be pre-qualified over the phone, asked to submit an application and the necessary documentation. Once you submit the required paperwork to the factoring company, it can take as little as 24 hours to get funded. Normally, the funds are wired to your account electronically.
6. Can I choose how many invoices to factor?
Yes. We can easily provide you with a facility that has no minimum requirements. Simply let us know that this is your preference. It may be to your advantage, based on your dollar value, to go with a factoring company that has minimums if you plan on factoring for a long period of time. You may gain access to better rates by doing so. Of course, we will help you determine what is best for you depending on your specific situation, but ultimately you will decide what works best for you and your company.
If you have any questions feel free to contact us.