The process for signing up as a new factoring client includes asking for current financial information. You should consider putting together a small loan package prior to seeking a factoring company, unless your company is a pure start up, in which case you will apply without this type of documentation. For revenue driven businesses, those companies going after invoice factoring would find it helpful to have the following material close at hand. The company Balance & Income Statement, Profit & Loss Statement, Current Accounts Receivable Aging Report, Accounts Payable Aging Report, and in some cases (but not all) a copy of the latest company tax return.
The question arises, “if the decision to fund is based on my customer’s credit, why do I need to provide my financial information? The answer to that is; when establishing a commercial financing relationship the factoring company needs to get a handle on the size and scope of your business. It helps to ascertain whether you might be the right kind of client for the portfolio, but more importantly it assists in determining the best rates to offer in the funding term sheet.
When looking for capital, a snap shot of your financial condition is required information.