Invoice factoring: can your receivables be presented?
Invoices owed by other businesses can be presented to lenders who factor receivables, before your clients pay. The lender decides which invoices it takes, and at what cost.
Choose my amountThe answers
- What is invoice factoring?
- A lender advances part of an invoice you have issued to another business and collects the rest when your client pays. The invoice itself usually secures the advance; the lender may still ask for a personal guarantee or security on business assets, in its written offer.
- Which invoices can be factored?
- Invoices issued to businesses or public bodies for work already delivered, with written payment terms. Invoices to consumers, or for work not yet done, usually cannot be.
- Will my clients know?
- Often, yes: the factoring lender usually notifies your client that payment goes to it. Each lender states its practice in its written offer.
- My deposits are low because clients pay late: does that matter?
- Less than for other products. For factoring, lenders read the quality of your receivables and your clients first; the deposits come second.
What the lender looks at
- Actual deposits, month by month
- The deposits show when your clients actually pay, and how late.
- NSF cheques
- A returned cheque weighs on the file even when the receivables are sound.
- Payments to other lenders
- A receivable already pledged to another lender cannot be factored twice.
- How long the business has been operating
- Factoring can be presented with a shorter history than most other products; the lender sets its threshold.
$0 upfront · 7% only if funded
An intermediary, not a lender.
The lender sets the final amount and its cost in its written offer.
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