Be careful, there are some factoring companies who will quickly file a Uniform Commercial Code (UCC-1) financing statement as soon as you contact them. Doing this requires your permission, but some factors find creative ways to get it before you actually sign a factoring contract. It may be in the paragraph above where you sign a new client application. The main reason sub standard factors do this, is to make it difficult for you to go to another factoring company. Many times we see situations where a UCC-1 has been filed and we have to ask our new client to go back to another factor they only had discussions with, to get them to terminate their filing. This totally unnecessary impediment usually adds time and expense to getting your invoice factoring account set up.
At Creative Capital Associates we normally wait until all the contracts have been signed and returned to us before filing a UCC-1. There are too many examples of even with the best intentions the factoring relationship never comes to together. Watch for this activity because it is probably a sign of other motives.