A factoring company needs you to have invoices with strong creditworthy customers. Actually part of the factoring process is to check on your customers credit. Figure that when using invoice factoring you will have a layer of credit management built into the funding relationship. Be careful of the old adage that says “you can find anyone with no credit will buy anything on credit.” It’s easy to sell to a company on credit that has none.
The trick is to never stop selling when you finally have one large customer. With accounts receivable financing too many invoices payable by one customer is a concentration issue . It’s added risk both to the factor and your business.
Sales to a variety of creditworthy customers is always good for business.
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