As Your Business Grows
We Deliver The FUNDS
We Deliver The FUNDS
We’ve put together our most frequently asked questions about invoice factoring.
Staffing factoring is a financial arrangement where a staffing agency sells its unpaid invoices to a third-party finance company at a discount in exchange for immediate cash flow.
No, factoring will not hurt your company’s credit score, because it’s not a loan and doesn’t appear as debt on your balance sheet. Factoring companies don’t report to credit bureaus the same way lenders do.
In fact, factoring can help your credit profile indirectly by improving cash flow, which lets you pay suppliers and other obligations on time.
However, if you consistently fail to repay in a recourse factoring agreement (where you're responsible if your customer doesn’t pay), it could lead to collections or legal actions that might affect your credit.
Not necessarily. Factoring companies primarily assess the creditworthiness of your clients, not your business, since they’re the ones paying the invoice.
A wide variety of industries regularly rely on factoring receivables, such as trucking, freight, and transportation; staffing and payroll services; construction; oil, gas, and energy; manufacturing; medical and healthcare; agriculture and farming; government contracting; business services; and IT and telecommunications. While these are among the most frequently factored sectors, nearly any business in any industry can benefit from factoring.
In non-recourse factoring, the factoring company assumes the risk if your customer fails to pay their invoice, shielding your business from potential bad debt. They handle the collections process and absorb the loss if the invoice remains unpaid. In contrast, with recourse factoring, the credit risk is shared between your business and the factor. If the customer doesn’t pay, the unpaid invoice is returned to your company, which must then either collect the amount due or cover the loss.
In most cases, you can receive funds via a wire transfer to your business bank account, through ACH electronic payment, by express code, or by having a check mailed to you.
Your customers will be notified through a notice of assignment, instructing them to send payments directly to the factoring company. Usually, the invoice will include a clear stamp or note with the payment details and remittance address.
Yes, typically they send a one-time notice of assignment to inform your customer to direct payments to the factoring company. Factoring providers are mindful of your client relationships and ensure all communication is handled professionally and respectfully.
The approval process for invoice factoring is generally straightforward and much quicker than the often time-consuming procedures required for bank loans. Additionally, since factoring involves selling receivables rather than borrowing, it doesn’t add any debt to your balance sheet.
Gaining a clear understanding of how invoice factoring operates—along with its advantages, potential downsides, and how to select the right factoring partner—can help businesses determine if this funding solution aligns with their needs. Whether you're aiming to boost cash flow quickly or streamline your receivables management, invoice factoring can be a powerful asset in your overall financial strategy.
Get in touch with us today for a free quote and discover how we can support your business growth.
We are recognized as one of the largest independent providers of asset based financial services for small to mid-sized businesses. We offer a complete line of invoice factoring services, inventory finance, purchase order financing, international trade finance, supply chain finance, short term future receivable funding and other related financial services.
What Makes Us Unique? We offer funding for a wide range of industries and flexible funding requirements that most businesses can easily qualify for. Our competitors are challenged to offer this combination of services due to their standard underwriting infrastructure and limited industry experience.
