One requirement for invoice factoring is obtaining a Letter of Good Standing issued by the State of Incorporation. Whichever state the business is currently registered to will keep track of whether the business has paid their annual registration fee. In order for the factoring company to have a legal contract with the factoring client, the client must be up to date on its fees to the state. The result of up to date payments is the Letter of Good Standing. This insures the factoring client is a proper legal entity. A small but very important matter that should not be overlooked.
In any case, it doesn’t pay to miss annual registrations. Getting the account paid up to date will incur penalties and interest.