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Commercial Finance Disclosure Regulations Delay Factoring Underwriting Process

Phil Cohen

The recent passing of stricter commercial finance disclosure regulations (CFDR) in states like California, New York, and Utah has created a negative impact on businesses in the factoring industry. Not only is there a lot of confusion around what the regulations cover and how to comply with them, but these hurdles also impact underwriting, slowing down the overall process of businesses getting the funding they need.

How CFDR Slows Down The Factoring Process

These stricter commercial finance disclosure regulations require factoring companies to perform extensive due diligence on the businesses that they work with, including detailed financial documentation, and compliance with legal requirements.

As factoring companies are still learning what is legally required to comply with these stricter regulations, it creates a slower turnaround time for funding businesses.

The need for consumer transparency and the disclosure of certain terms and conditions can result in more paperwork, longer approval times, and administrative burdens, causing delays in the underwriting factoring process.

The Future of CFDR in The Factoring Industry

While these commercial finance disclosure regulations play a pivotal role in businesses working with factoring companies in states like California, their ambiguous requirements contribute to delaying the underwriting process for invoice factoring.

Factoring companies will need to find the balance between complying with these regulations and expediting the underwriting process. To remain competitive for businesses in these states, factoring companies will have to learn how to adhere to these regulations without compromising the efficiency of the factoring process.

Struggling to Find a Factoring Company?

If you’re struggling to find a factoring company for your business in states like California, New York, and Utah because of recent commercial finance disclosure regulations, you’re not alone. Factor Finders is still open for business in these states and can work with you to get your company the funding that it needs.

Complete the form to the right to get your California deal funded.

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Phil Cohen

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