Whole-ledger factoring (sometimes called full-turnover or bulk factoring) is an ongoing arrangement in which the business sells all of its eligible invoices to one factor, rather than choosing invoices one at a time.
How it works in factoring
The factoring agreement defines which receivables are covered. It might be every invoice the business issues, or every invoice to a list of approved customers. As new invoices are created, they are submitted to the factor through a regular schedule of accounts, and the factor funds those that meet its eligibility rules.
Because the factor sees a steady flow of business and the full customer base, it can price risk across the portfolio. That often allows lower per-invoice fees and higher advance rates than one-off spot transactions. The factor may also take over credit checking and collections across the whole ledger.
Whole-ledger agreements usually come with:
- A contract term, often renewing automatically unless notice is given
- Minimum monthly or annual volume commitments
- A blanket UCC lien on receivables, and sometimes other assets
- Early termination fees
What to check
- Whether you can exclude specific customers, such as those with anti-assignment issues or long relationships you want to manage yourself
- What happens to invoices the factor declines to fund; are they still subject to its lien?
- Notice periods and termination fees
- Concentration limits that could leave a large customer only partly funded
Whole-ledger factoring trades flexibility for predictability. It tends to suit businesses with consistent invoicing that need financing every month.