FAQ

What information do I need to provide for me to start factoring my receivables?

Fill out our contact form and we will respond quickly by providing a short list of items needed for review depending on your industry. Typical items requested include; application, A/R aging report, list of customers to factor, copy of invoices, articles of incorporation or DBA filing, etc.

How long does it take to get funded?

Once we have received all requested information, we can have you approved in 24-48 hours. We can typically have you funded in 10 business days or sooner.

If I have tax problems will you fund me?

The Factoring Alliance will make every effort to work with you. If there is a tax lien, we will need to work with the government agency to ensure the accounts receivable can be subordinated for our factoring program.

My customer won’t pay an invoice, what do you do?

We offer recourse factoring lines of credit. If your customer does not pay the invoice within 60-120 days (depending on the industry) the invoice will be charged back to your account. This delinquent invoice can be offset with new invoices or the balance paid back from the rebates of other invoices that have been collected.

Do you notify our customer to pay you?

Yes, your customers will be notified and all payments must be redirected to the factoring company. Factoring is now a common means of doing business, almost all account debtors will work with you. Also, notification from a factor usually generates quicker payment since many factors report payment history to national credit reporting firms.

What will my customer’s think?

Explain to your customers that your business is growing and you have teamed up with a company to manage your receivables. This will allow you to focus on your core business and provide even better customer service.

I still don’t understand factoring

Factoring can be compared to a similar industry that most retail businesses use everyday. Factoring for a commercial business is exactly the same accepting credit cards for a retail business.

For example, a restaurant accepts credit card payment from its customers. The restaurant sells its credit card receipts to a credit card company at a slight discount in order to be paid quickly. Then the credit card company collects the payment from the restaurant’s customer.

Factoring is very similar.

An architect provides designs to a client and sends an invoice. The architect sells the invoice for a factoring company at a slight discount to get paid quickly. The factoring company collects payment from his customer in 30 or 45 days based on invoice terms.

How much does it cost?

Fees are determined by criteria such as, your industry, the strength of your receivables, monthly amount to factor, length of time an invoice is outstanding. The key is to make sure that factoring is cost effective.

In addition, it’s important that all fees are understood before any factoring takes place. As a business owner you should carefully read all agreements made with a factoring company. The Factoring Alliance will take the time to go over all documents with you prior to entering into an agreement.