Invoice Factoring Guide
Everything a business owner needs to know before factoring invoices, in 11 short chapters. Read in order or jump to the chapter you need.
- 1What Is Invoice Factoring?Invoice factoring lets you sell unpaid business invoices to a finance company for cash now instead of waiting weeks for your customers to pay. This chapter covers the basics.
- 2How Invoice Factoring WorksFactoring follows a repeatable cycle. Once you know each step, you can predict when cash will arrive and what can slow it down.
- 3Industry Considerations in Invoice FactoringFactoring works the same way at its core, but each industry brings its own paperwork, payment habits and legal rules. Here is what to expect in yours.
- 4Recourse vs. Non-Recourse FactoringThe recourse terms decide who absorbs the loss when a customer does not pay. It is one of the most important parts of any factoring deal.
- 5Qualifying and Applying for FactoringFactoring approval leans on your customers' ability to pay, but your own business still matters. Here is what factors check and how to prepare.
- 6UCC Filings and Notices of AssignmentFactoring runs on a few public filings and notices. Knowing how they work helps you avoid surprises when you sign up, add a lender or leave a factor.
- 7The Factoring AgreementThe proposal gets you interested. The agreement decides what you actually pay and how hard it is to leave. Here is what each key clause means.
- 8Factoring Fees and Rate StructuresThe headline rate is only part of what factoring costs. This chapter shows how fees are built, how they combine with the advance and reserve, and how to compare offers.
- 9Pros and Cons of Invoice FactoringFactoring solves some cash flow problems well and creates trade-offs of its own. Here is a balanced view so you can weigh both sides.
- 10Is Factoring Right for Your Business?Factoring fits some businesses well and others poorly. Use this chapter to test the fit and compare it with other ways to fund working capital.
- 11Questions to Ask a Factoring CompanyAsking the same questions of every factor makes offers easier to compare. Use this checklist before you sign any factoring agreement.