Receivables funding FAQ
Here are some of the more frequently asked questions about Accounts Receivable Funding. If your question is not answered here, please contact us. We're here to help.
Q. How do I know if my receivables can be factored?
A. If your invoices are created by business-to-business or business-to-government sales, and are for product that has already been delivered or services that have already been rendered, chances are you are a good candidate for factoring.
Q. You say factoring creates no new debt. How can that be?
A. Factoring creates no new debt because it is NOT a loan. Your invoices are being purchased at a discount. It's a lot like buying a car. You make an offer that is lower than the asking price, and the seller either accepts it or not. If he does, you buy the car at a discount from the asking price.
Q. My bank won't approve me for a loan. How can I be approved for factoring?
A. Because factoring does not involve borrowing, our funding sources are not subject to the same restrictions as banks.
Q. Can I still factor my invoices if I have a tax lien on my company?
A. Yes. In fact, in many instances, our funding sources can come to an agreement with the IRS that actually strengthens your position by showing that you are proactively trying to pay down the lien.
Q. My invoices are committed as collateral on a loan. Can I still use factoring?
A. This can be a roadblock, but our funding sources can ask your creditors to subordinate their position. If they agree, then factoring is still possible.
Q. Do I have to give up control of my business?
A. Absolutely not! Our funding sources are not interested in owning your business. They are not venture capitalists. Their hope is that by stimulating your cash flow, you'll grow your business and sell them more invoices!
Q. How long does it take to get started?
A. Most of our funding sources can start funding in as little as 5-10 working days. Once the paperwork is filled out, they will do their due diligence. Upon successful completion of due diligence, funds can be transferred immediately. On subsequent submissions of approved customers, funding usually occurs within 24 hours.
Q. Are there limits on the dollar amount I can factor?
A. There are certain minimums, of course, but we have funding sources that can fund millions of dollars of invoices per customer, per month.
Q. You’re based in San Diego, California. Can you factor clients in other cities or states?
A. Yes. While face-to-face business dealings are desirable, it’s not always possible, and seldom necessary. It’s the power and speed of electronic communication. E-mail, phone, and fax allow us to communicate and work with businesses anywhere in the country.
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