In order to use invoice factoring practically, your business revenue should be based on net profit of 15% or greater. Because accounts receivable financing charges for monies advanced for the period the invoice is unpaid, the discount rate may start to add up. This is especially true if you have a problem account. So factoring companies pay special attention to the margins you generate while operating your business. It doesn’t make sense to set up a funding relationship where the borrower is losing money on their own sales. Rarely does this happen because early due diligence should capture the financial conditions before the factoring begins.
So high volume low margin companies might have to consider other methods to secure the commercial financing they need for growth.
Profit as it relates to price, read about it HERE.