FAQ’s

Invoice factoring is a financial solution where a business sells its unpaid invoices to a factoring company at a discount in exchange for immediate cash, improving cash flow without incurring debt.

A business submits its invoices to a factoring company, which advances a percentage (typically 80-95%) of the invoice value. The factoring company then collects payment from the customer and remits the remaining balance, minus fees, to the business.

With Factor & Fund:
– Submit your unpaid invoices to Factor & Fund.
– Get approved based on your customers’ payment reliability.
– Receive immediate cash (minus a fee of 2.25% to 7% per invoice).
– Factor & Fund collects payment from your customers per the invoice terms.

– Immediate access to working capital
– No additional debt incurred
– Improved cash flow management
– Outsourced accounts receivable collections
– Flexibility to grow and take on new clients

Factor & Fund:
– Immediate cash flow without debt or equity dilution.
– Transparent rates (2.25% to 7% per invoice) with no hidden fees.
– Focus on customers’ payment reliability, not your credit score.
– Quick funding, often within 24-48 hours.
– Tailored solutions for businesses of all sizes.

No, invoice factoring is not a loan. It’s a sale of receivables, so it doesn’t create debt on your balance sheet.

Businesses across various industries, including trucking, staffing, distributors, amazon sellers, apple store apps, manufacturing, and professional services, use invoice factoring to manage cash flow and support growth.

Eligible businesses include:
– Small to large businesses in the U.S. with B2B or government invoices.
– Companies with outstanding invoices due in 30-90 days.
– Businesses with creditworthy customers, regardless of their own credit score.

Many factoring companies provide funding within 24 to 48 hours after invoice submission and approval. Factor & Fund is trying to fund the same day.

– Recourse factoring: The business is responsible if the customer doesn’t pay.
– Non-recourse factoring: The factoring company assumes the risk of non-payment

Fees typically range from 2.75% to 7% of the invoice value per month, depending on factors like industry, customer creditworthiness, and invoice volume.

Yes, in most cases, customers are notified to redirect payments to the factoring company. However, some factors offer non-notification services.

When managed professionally, invoice factoring should not negatively impact customer relationships. Many customers are accustomed to working with factoring companies.

Yes, startups with creditworthy customers can use invoice factoring, as approval is based more on the customer’s credit than the business’s credit history.

– Invoice factoring involves selling invoices to a factor.
– Invoice financing involves borrowing against unpaid invoices, with the business retaining collection responsibilities.

Factoring involves selling invoices to Factor & Fund, who collects from customers. Financing uses invoices as loan collateral, with you collecting payments. Factor & Fund focuses on factoring.

Qualifications typically include:
– Operating a B2B business
– Having creditworthy customers
– Possessing unencumbered accounts receivable
– Providing necessary documentation (e.g., invoices, contracts)

Minimums and maximums vary by factoring company, but many work with invoices as low as $5,000 and up to several million dollars. Factor & Fund will try to meet your needs.

Yes, many factoring companies offer selective factoring, allowing businesses to choose which invoices to factor.

– In recourse factoring, the business must repay the advance.
– In non-recourse factoring, the factoring company absorbs the loss, depending on the agreement terms.

Industries with long payment cycles or cash flow challenges, such as transportation, staffing, manufacturing, construction, apple suppliers, amazon sellers, transportation, and wholesale with B2B or government invoices often benefit significantly from invoice factoring.

Not necessarily. Some factoring companies offer flexible, short-term agreements, while others may require longer commitments, but most of them will lock you into 1-2 years contract. Factor & Fund is very flexible. Factor only the invoices that you want to factor and when you need the cash.

Invoice factoring doesn’t directly affect your credit score, as it’s not a loan. However, timely payment by your customers can positively reflect on your business’s financial health.

Yes, since approval is primarily based on your customers’ creditworthiness, not your business’s credit score.

Commonly required documents include:
– Completed application form
– Accounts receivable aging report
– Customer invoices
– Proof of business registration
– Bank statements

Some factoring companies offer international factoring services, but terms and eligibility vary. Factor & Fund with presence in Europe and US will be more open to international invoices.

By providing immediate funds for unpaid invoices, invoice factoring helps businesses meet operational expenses without waiting for customer payments.

Potential risks include:
– Customer dissatisfaction if not informed properly
– Obligations in recourse agreements if customers default
– Fees that may be higher than traditional financing

Yes, but it’s essential to ensure that your accounts receivable aren’t pledged as collateral for other loans.

The advance rate is the percentage of the invoice value that the factoring company pays upfront, typically ranging from 80% to 95%.

The reserve is the portion of the invoice amount held back by the factoring company until the customer pays the invoice. After payment, the reserve is released to the business, minus fees.

Invoice factoring provides funds based on actual sales (invoices), while a line of credit offers a set borrowing limit regardless of sales volume.

Consider factors such as:
– Fee structure
– Contract terms
– Customer service reputation
– Flexibility in services offered

Factor & Fund is a financial services company offering invoice factoring, cash flow solutions, and accounts receivable financing to help businesses access immediate cash without debt.

Yes, you can select specific invoices to factor, offering flexibility to meet your cash flow needs.

No, you can factor as many eligible invoices as needed to support your cash flow.

Spot factoring allows you to choose specific invoices to factor, providing flexibility without committing all invoices. Something that only a few companies accept, including Factor & Fund.