Factoring Questions Answered
Q.
Do I have to pay any application fees or other hidden costs to get started?
A.
No. No initial fees are required unless you have no invoices to factor.
Q.
Do I have to factor all of my invoices when I start factoring?
A.
No. You decide which invoices you want to factor and which invoices you want to keep as your own. There is no requirement to factor all of your invoices.
Q.
How will my customers know where to send payment for invoices that I have chosen to factor?
A.
When invoices are factored they will be stamped with the address to send payment to prior to being mailed to your customer.
Q.
Are my receivables held as collateral?
A. Yes. A first position on all accounts receivable is required while you are factoring.
Q.
Is additional collateral required?
A. No. Unlike traditional bank financing, factoring does not require that all assests of the business be offered as collateral. Factoring only requires a first position lein on your receivables.
Q.
What if there is already a lein on my receivables?
A. This usually is not a problem. Most banks are willing to subordinate their first position lein on receivables to factoring companies.
© 2005 Invoice Financial
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