Getting Ready For Factoring

Here is what you need to do in order to start a factoring relationship;

Bookkeeping: You should have an accounting package installed and up to date. The ability to provide financial statements, aging reports and customer payments histories is helpful.
Customer Credit Limit: What methods are you currently using to determine how much credit you will extend to a particular customer account? This is one of the benefits of factoring as we will start providing robust reporting on customer creditworthiness.
Industry: Match your industry with a factoring company that is experienced working with clients in that industry. There are a handful of specialized verticals like medical, trucking & construction.
Business Model: What is a job? Do you use purchase orders? Is shipping involved? Do you invoice before the work is completed? Task orders? Progress payments? License agreements? Annual contracts? Any of these can affect the funding opportunity.
Existing loans: If your company has a loan with a bank and is now looking for additional capital this could be a problem. The bank is probably using your business assets as collateral, meaning the accounts receivable. In order to get past this impediment either the loan must be paid off or the bank agrees to subordinate their position. This could be difficult.
Application: Relatively speaking applying for factoring is not as daunting as a conventional loan. It is much faster and requires less paperwork. Some of the documents related to the application are;