With non-recourse factoring, if a company fails to pay an invoice, the borrower is not held liable by the factoring company. It’s more challenging to qualify for non-recourse factoring solutions because businesses typically need a higher invoice volume and customers with stellar credit. While most factoring companies will offer non-recourse factoring to their top customers,…
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5 Best Transportation Factoring Companies
Transportation factoring companies offer transportation businesses an opportunity to shorten the time it takes to collect on invoices. Transportation providers rely on other businesses to pay invoices, but it sometimes takes as long as 90 days. Factoring those invoices can help increase cash flow, which can be used to reinvest into additional vehicles and to…
3 Best Retail Factoring Companies & When to Use Them
Retail companies sometimes encounter scenarios when orders outpace revenues, and they experience a cash-flow gap. In such cases, retailers need to obtain the right type of financing, and for large orders, there is no better solution than retail invoice factoring. Retail invoice factoring is the process of converting unpaid invoices from customers into cash at…
5 Best Invoice Factoring Solutions for Service Providers
Businesses that provide services to large companies, such as catering, hosting events, and fleet maintenance, sometimes struggle to scale due to unpaid invoices. The best solution for these types of businesses is invoice factoring because it offers an opportunity to receive the value of an invoice before a customer pays it. Top Factoring Companies for…
3 Easy Invoice Factoring Companies
When considering financing options, invoice factoring is usually the easiest one for which to qualify. However, even within invoice factoring, there are differences. Some invoice factoring companies even require a minimum credit score. We selected the easiest invoice factoring companies to qualify for based on credit score, time in business, and annual revenue. The easiest…
3 Same-day Invoice Factoring Providers
Getting a same-day invoice factoring solution is more difficult than a business loan or line of credit. Factoring companies have a higher due diligence requirement because they need to check into the creditworthiness of your debtors or customers. We analyzed the top factoring providers and selected three that offer same-day funding or at least same-day…
What Is a Letter of Credit?
A bank or financial institution provides a letter of credit to a small business, which guarantees payment to someone else once the conditions of the letter are met. A letter of credit is a great way for a business to order inventory and access trade credit without reducing cash on hand until the goods are…
Recourse Factoring: What It Is & How It Works
Recourse factoring is the most common type of invoice factoring. The business that sells a customer’s invoice retains the risk and liability if the debtor fails to pay. This means the seller will essentially have to repurchase receivables sold to a factor if the lender can’t collect on the invoice. This effectively converts a factoring…
What Is Non-notification Factoring?
Non-notification factoring, also called confidential factoring, is a kind of factoring relationship where there is minimal involvement from the factoring company. The seller typically retains the responsibility of collecting on the factored invoices, thereby limiting any interaction between the factoring company and its clients. In cases when a factor needs to communicate with a seller’s…
What Is an Assignment of Claims?
An assignment of claims is the transfer of the right to claim from one creditor to another. This enables a small business owner to transfer an unpaid invoice to a lender creating an invoice factoring transaction. The transaction may be governed by the Assignment of Claims Act, which outlines the rights and obligations of each…
What Is Spot Factoring?
Spot factoring, also known as single-invoice factoring, is when a business sells an individual customer invoice to a lender to receive advance funding. The factoring relationship typically ends as soon as the debtor pays the invoice. It’s best for businesses that prefer flexibility because their invoices or factoring needs are less predictable. How Spot Factoring…
Who an Account Debtor Is
An invoice factoring transaction typically consists of three parties. They are the factoring company, the seller of the invoice, and the debtor who’s responsible for paying the holder of the invoice. For a small business, the account debtor is the customer who owes the invoice. How an Account Debtor Can Impact Factoring The creditworthiness of…