How to Start Invoice Factoring
Invoice factoring is designed to be a fast & flexible way to fund your business. That’s why it’s easy to get started & approved. First, you’ll need to complete a one-page application and submit a customer list. In addition to completing the application, the following documents are required for application approval:
- Completed Application & Photo Identification
- Accounts Receivable Aging Report
- Copy of DBA filing or Articles of Incorporation
- Customer List
- Copy of Most Recent Tax Return
- Invoices to Factor
The documents needed for factoring are pretty straightforward. The approval process typically takes 3-5 days. Once completed, you’ll be able to start factoring invoices as needed.
Turned down for bank loans? No worries – you’ll likely be approved by a factoring company.Factors base approval on the credit history of your customers, so even if your business has poor credit, you can still be approved. Startup businesses also qualify for factoring. If you have outstanding invoices, you’re eligible for this type of funding.
It’s time to get funded! Complete the form below for your quick quote.
The Factor Finders Difference
Factor Finders, LLC, offers customized financial solutions for businesses experiencing fast growth, seasonal sales patterns or slow paying customers. Invoice factoring is often the ideal solution for firms lacking enough credit to obtain a bank loan. Funding decisions are based on your customer’s credit worthiness, so a less than perfect company credit history is OK.
The Factoring Process Explained
A factoring company will process your application so that cash reaches your account in about five business days. Unlike a bank approval process, there are no loan committees or complex financial analysis. Dedicated account managers are available to guide you through every step of the process.
- Fill out an application: Call 855-FACTOR-1 to learn about our financial solutions for every major industry. We will pair you with a factoring company that specializes in your niche and understands your unique business needs.
- Send an Accounts Receivable Aging Report: The factoring company will review your invoices, categorize them, and assign a net value. The invoices will show the length of time the amounts have been outstanding, so the long overdue invoices will be processed first. For example, your invoices can be categorized as “current,” “30 days,” “45 days,” “60 days,” “90 days,” or “120 days.”
- Forward a Customer List with Credit Limit Request: The factor will review your customer list in order to analyze their credit worthiness and ability to pay. They will take note of their credit limit and determine if it is appropriate based on their financials. In addition, factoring companies offer credit checks on current and potential customers for no additional fee and check for potential lawsuits or tax liens that could hold up the factoring agreement.
- Sign on the Dotted Line: You’ll receive documentation discussing cash advance rates and factoring discount rates for your approval. Once returned, cash typically reaches your account in 3 to 5 days.
- Submit Invoices to Factor: Factoring funding begins immediately after receiving your approved invoices.