Factoring companies make money by charging a factoring fee, which they either calculate based on the number of days a factored invoice is outstanding or as a flat rate per invoice. In some cases, invoice factoring includes additional fees designed to encourage borrowers to factor a certain number of invoices or to maintain an open…
Notice of Assignment: What It Is & How It Works
Small business owners who use invoice factoring will be required to authorize a notice of assignment the first time a lender factors an invoice. This notice is intended for the business’s customer and informs them the invoice is now payable to the factoring company instead of the business. How a Notice of Assignment Letter Works…
Factoring Advance Rates: What They Are & How They Work
Factoring companies provide capital as a relative portion of the invoice value. The portion they advance right away is called the advance rate and usually ranges from 75% to 95% of the invoice value. Advance rates typically vary based on the industry, due date, volume, and debtor’s credit in a factoring transaction. Small business owners…
Factoring Agreement: Definition & Common Terms
Small business owners who apply with an invoice factoring company will receive a factoring agreement outlining their rates and terms. This agreement should outline the agreed-upon rates, terms, and conditions to be followed throughout the factoring relationship. Factoring agreements usually last from between one and three years, at which point they can be renegotiated with…
Trucking & Freight Factoring: What It Is & How It Works
Freight factoring―also referred to as trucking factoring―is a form of invoice factoring that allows transport companies, including owner-operators, to turn unpaid invoices into immediate cash. Freight factoring is a good option for owner-operator trucking companies that want to get paid immediately for work they have already done to be able to take on additional work….
How to Improve Your Invoice Factoring Application
Invoice factoring lets a business convert its outstanding invoices into cash by selling them to a factoring company or factor for a fee. Unlike traditional loans that often require personal credit scores as part of the application and approval process, factoring lines of credit are typically backed by a company’s assets and are the primary…
List of Invoice Factoring Companies
As a business owner applying for invoice factoring, it’s important to evaluate your options and compare different invoice factoring companies. Using the drop-down below you can view all of the invoice factoring companies we evaluated and compare them across different criteria including qualifications, costs, funding speeds, and funding amounts. List of Factoring Companies All Factoring…
What Non-recourse Factoring Is & How It Works
Non-recourse factoring is a kind of factoring relationship where the business that sells its invoice isn’t held liable if its customer fails to pay. In non-recourse factoring, it is the factor that assumes this risk. This type of factoring is rarely offered to business owners unless the debtor is a government or major corporation that…
How to Apply for a Paycheck Protection Program Loan
Applying for a Paycheck Protection Program (PPP) loan is less daunting than applying for a traditional Small Business Administration (SBA) loan. Most lenders offer an online application process that allows you to upload your supporting documents simultaneously with the application. Fit Small Business examined the Paycheck Protection Program loan application process at numerous lenders and…
5 Best Non-recourse Factoring Companies
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,…
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…