Within the receivable factoring industry there are many methods and wrinkles that you should be aware of so you may plan accordingly. One of these pertains to the length of the relationship, meaning, a contract that forces you to stay when you want to go. Usually this is in the form of a condition in the factoring agreement which states you are agreeing to require factoring for a period of 12 months.
If at such time you would like to end the relationship before the twelve months, you may be liable for the fees that would be generated during the contract period. In other words, getting out a calculator and figuring out the amount of fees that would have been paid had the contract extended to the full term. The unpaid amount would have to be paid in order to release the UCC-1 filing which unlocks the possibility of securing new financing.
Here at Creative Capital Associates we DO NOT have this condition in our contract. Once the invoices we have made advances on have been paid in full, you are free to graduate up to banking or other forms of financing that you think will better benefit your company. I mention other forms because, you being able to leave puts the incentive on us to be the best factoring company available.