Invoice factoring companies provide business financing by making advances on commercial accounts receivables. An invoice is defined as a product and/or service that has been delivered / completed and accepted by the customer. Until the customer agrees the invoice will be paid, it is not acceptable for the advance.
So in other words;
– Factors cannot provide up-front capital to open a restaurant.
– Factoring is not for any type of retail store that sells to everyday public consumers.
– Loan situations related to real estate property are unavailable for factoring.
– Sales agents or people looking for an advance of future commissions – there are a few specialty places that do that, but generally commissions are not “invoices”.
– Start-ups who have a new contract but need up-front money to get it going will not qualify until they actually can produce an invoice
– Factors do not cash out annual contracts (money today for funds that will be collected over the next year)
– No equipment financing, no inventory financing, no proforma or pre-billing
– And most of all factoring companies will definitely not pay to help a relative of a deposed government official from a foreign land.