In the previous post we discussed the essence of invoice factoring. The factoring company buys outstanding business loans in the form of invoices. The critical part of this transaction is determining that the loans are actually worth buying.
• Is the company who is directly paying the invoice creditworthy?
• Has the work been completed 100% and accepted?
• Are there any previous offsets or credits going to be deducted from the payment?
• Does any other entity have existing title to unpaid invoices?
• Will the account debtor (customer) acknowledge the outstanding loan (invoice?)
The job of the factor is to insure that all of the above has been accurately checked out in order to safely provide the capital on the transaction. Usually this process is handled seamlessly with little distraction to the daily operation of your business. But you will notice that these checks are extremely important to any company whether using receivable factoring or not. So we see this as providing much more than capital as a service. Our goal is to keep your company safe and secure when it comes to incoming revenue.