There are occasions where a company looking for accounts receivable factoring is working for a city or government agency that requires a payment or performance bond from a surety company. The bond is part of the contract that insures that labor and materials will be paid for the job. Primarily in construction related situations but it can crop up in any municipal contract. The factoring company needs to know about any bonding that you have in place. The bond issuer has a position on the assets of the company that supersedes the factoring arrangement. So the factoring company and the issuer need to get their agreements in place to allow for the invoice financing. It is usually not a problem but could eat up some time to pull together, letting everyone know right away if there is a bond will speed up the factoring process.