When it comes to commercial financing and invoice factoring in particular, there are no secrets. All parties subject to the transaction must be notified. A client of a factoring company is declaring that the proceeds of completed work are being assigned to a third party lender.
When the client completes the job specified on the contract and offers their customer terms, they are creating a loan to that customer in the form of an invoice. The factoring company is purchasing that note and making an advance on the amount owed.
Therefore the customer has to be made aware of the actions of the client on behalf of the factor. This is handled in a straight forward businesslike manner without unnecessary complications to the client – customer relationship.