Some business owners think that invoice factoring is used to get rid of bad customer debt. They unfortunately plan to unload invoices that are not getting paid or have some sort of issue causing the invoice to be held up.
This is not what factoring is used for, getting bad invoices off your books. A factor will not accept invoices with problems if they are submitted. And a relationship that is totally based on offloading old unpaid invoices will likely not be successful. For the most part a factoring company will not be interested in this type of client.
Factoring is meant to be used for growth. Your company is growing too quickly for your working capital turnaround. New contracts and increased labor costs consume cash on hand and the need for access to more working capital is critical to performing on those contracts. Being able to quickly verify that work is completed and accepted and will be paid for within a 30 or 60 day window is the best way to use this commercial finance tool.
Any account that ages over 90 days becomes ineligible from a credit standpoint. And invoices for work that have warranty issues require immediate attention. Factoring is not a curtain in the back to sweep away problems.