Most factoring companies operate in the same general manner. Each has their own way they process invoices for funding, but once a client is set up, the everyday mundane mechanical flow of paperwork is the same day after day. When a client first approaches a factoring company, there are set questions and documents that every new client must deliver if they expect to get working capital. For the most part this feeling out process is to see how responsive a new client is, to gauge if they are worth the trouble.
If the factoring company has been around for a while, has their due diligence process in place, when a new client comes along that insists on doing it their way – it stands out like the proverbial sore thumb. If they question why the factor needs a document, they want changes made to the agreements, they say they will do one thing and then do another. These are all signs that down the road the factoring relationship will be a challenging one. This is based solely on the fact that for the most part, business owners who understand the funding process are quick to be pro-active to the needs of the factoring company to implement an expedient transaction. Invoice factoring is about speed, and going with the flow will get you there.
This is not to suggest that being curious, asking questions, calling references, reading agreements thoroughly are bad things – they are extremely important. But dictating the rules to the lender usually will not fly in the long run.