There are certain factoring companies that require a commitment relationship. In order to qualify for invoice factoring you would be signing a contract to be committed to factor. There are two parts to this process. The first is to commit to factoring your receivables over a specific period of time, usually 12 months. What this means is, in order to move away and find another source for invoice factoring you would be paying the amount of fees your contract specified that remained for the time period. For example, if you signed a 12 month contract to fund an amount every month, the total amount of fees that would have been generated during that time period, minus the fees you had paid up to the point of contract cancellation would be owed in order to free up your commitment. Because the factor has filed a Uniform Commercial Code (UCC-1) financing statement, your accounts receivable collateral would not be available until the contract terms had been met.
The second commitment, usually in tandem, is the monthly minimum commitment. This requires you to submit a minimum amount of invoices for financing every month. Those invoices would generate a minimum amount of finance fees over the period of the month. By not submitting the minimum amount of invoices for factoring, your reserve account would be deducted for the difference of the missing fees.
Not being aware of these commitments could create added expenses and hassle down the road. As a factoring company, Creative Capital Associates has no minimum commitments. You do not have to commit to a contract period for factoring, allowing you to leave once the accounts have been paid in full. And you are not beholding to us for any monthly submissions of invoices. We earn your commitment by providing quality service.