Many people think they know what factoring is, but in reality, they have the wrong definition. In this post, we’ll be going over the most frequently asked questions about invoice factoring.
Invoice Factoring FAQ’s
Read our most frequently asked questions about factoring below to get a better sense of what invoice factoring can do for you and your business.
Q1: What is Invoice Factoring?
This is a question that we get a lot. Invoice factoring is a sale and purchase of outstanding invoices and account receivables to get immediate funding. A factoring company steps in to purchase your invoices and advances you a percentage of its total with low rates.
Q2: How Does Invoice Factoring Work?
Invoice factoring is a simple financial solution for many invoice based businesses. Here’s how it works:
Step 1: Send us your outstanding invoices
Step 2: The factoring company quickly review and approve your invoices
Step 3: The factoring company purchases your invoices and advances you up to 96% of its amount in just 24 hours or less.
This simple three step process can be started without even leaving your desk. Simply start your application online by providing your business information and uploading the invoices you’d like to factor.
Q3: What Makes Your Factoring Company Different From Others?
With other factoring companies, you’ll only get up to 80% of your invoice advanced to you. With us, you’ll get up to 96% of your total invoice amount in just 24 hours or less.
We offer a simple application process that makes it easier than ever to get paid for your outstanding invoices. In just minutes, you can hear back from a local business development representative that will set you up with the best rates for your business.
Our invoice factoring company also provides you with the following benefits:
- Good Credit Guarantees
- Build Credibility with Large Vendors
- Free Credit Checks
- Local Factoring Specialists
- Professional & Respectful Collection Services
- 24/7 Online Account Access
Q4: Do You Factor Startups?
Yes! We factor invoices for companies of all sizes. Invoice factoring is a great way for startups to build a solid source of working capital and secure a high credit score for future funding.
With a strong source of capital, your business will be able to easily:
- Manage payroll
- Stock up on inventory
- Take on more clients
- Expand operations
- Purchase new equipment, and more
Q5: What is the Difference Between Invoice Factoring and Business Loans?
Factoring is NOT a loan. With factoring, you are getting the cash already owed to your business, and with a business loan, you are borrowing money. With invoice factoring, you will not incur any additional debt to your name, as the money is already yours — unlike business loans, where you have to repay the money with complicated terms.
Invoice factoring allows you to tap into your hard-earned cash faster than waiting for clients to make payments.
Q6: Do You Look into My Personal Credit History?
No! We never look into your own personal FICO or credit score. Because we purchase your invoices, we look into the financial strength of your clients, rather than your business. This makes it easy for businesses that are struggling to get the financial help they need to stabilize their cash flow quickly.