Factoring companies tend to look at how many customers are on the accounts receivable aging list. Many times there isn’t an aging report because there is only one customer. That means the client has 100% concentration in one customer. That presents a problem for invoice factoring. Should there be a problem with the single customer, there is no other income due to offset any advances. Many accounts receivable financing companies will not accept a client with total concentration. It is deemed too risky. Others don’t have a problem with it, so ask about “concentration.”
From the client’s standpoint, it is much better to have a diversified customer list with income coming from multiple sources. Be aware the costs involved with invoice factoring trend toward the risk adverse. The less risk, the better the rate. Too much concentration will sometimes result in higher rates for factoring.