💡 Summary #
Factor & Fund prioritizes speed, but accuracy and compliance come first.
If we identify inconsistencies, missing documents, or risks during review, funding may pause until issues are resolved.
Recognizing these common red flags helps you avoid delays and keep approvals moving smoothly.
⚙️ Top Red Flags During Verification #
1. Mismatched Business Information #
When company names, EINs, or addresses don’t align across documents, it raises verification concerns.
Typical mismatches include:
- W9 name doesn’t match invoice header
- Bank account title differs from entity name
- Articles of Incorporation list an inactive address
🟦 Fix: Ensure all business details are consistent on your W9, invoices, and bank documents.
2. Unverified or High-Risk Buyers #
We can’t fund invoices for buyers (debtors) who:
- Have no verifiable business registration
- Show unpaid liens, lawsuits, or bankruptcies
- Refuse to acknowledge the Notification of Assignment (NOA)
🟦 Fix: Provide alternate buyer contact info or a different approved buyer.
3. Invoices With Incomplete Proof #
Funding pauses if invoices lack proof of:
- Delivery or service completion
- Buyer acceptance (signature, confirmation, or POD)
- Valid purchase orders or signed contracts
🟦 Fix: Always attach proof of delivery or service with each invoice submission.
4. Active UCC Liens #
If another lender or factoring company already has a UCC-1 lien on your receivables, funding cannot proceed until that lien is released or subordinated.
🟦 Fix: Factor & Fund will help coordinate lien releases directly with your prior lender.
5. Personal or Mixed Bank Transactions #
Business accounts showing personal transfers, Venmo, or Cash App activity create verification issues.
🟦 Fix: Use a dedicated business checking account for all company transactions.
6. Unusual Cash Flow or Overdrafts #
Multiple overdrafts, large unexplained transfers, or inconsistent deposits can trigger a deeper review.
🟦 Fix: Provide explanations or supporting statements showing legitimate business operations.
7. Buyer Payment Issues or Disputes #
If your buyer has open disputes, delayed payments, or returns, we may need confirmation before funding related invoices.
🟦 Fix: Communicate with your buyer early — resolve disputes before submitting invoices.
📊 How We Handle Red Flags #
| Red Flag Type | Typical Action | Resolution Time |
|---|---|---|
| Minor mismatch | Quick clarification | Same day |
| Missing proof or contract | Request new file | 1–2 business days |
| Active lien | Contact prior lender | 1–3 business days |
| Buyer verification issue | Additional follow-up | 1–2 business days |
✅ Most red flags are cleared quickly once documents are corrected.
✅ Best Practices to Avoid Delays #
- Keep your business info consistent across all paperwork.
- Upload clean, legible invoices with proof of work or delivery.
- Notify your account rep if you change bank accounts or ownership.
- Maintain strong communication with your buyers.
❓ FAQ #
Will a red flag permanently affect my approval?
No. Once the issue is fixed, funding resumes immediately.
Do red flags affect my rate?
Not usually — unless they reveal ongoing risk patterns or high-risk buyers.
Can I still apply while issues are being reviewed?
Yes. We can start your application, but funds won’t release until all verifications are clear.
