A factoring company will provide business financing by making advances on your creditworthy commercial (non-consumer) invoices. An invoice is defined as a product or service which has been completed and verified accepted as due and owing by the customer.
Here are a few examples of situations where factoring is not a fit;
– Factors cannot provide capital to open a restaurant or store
– Cannot help with any type of retail store that sells to everyday consumers
– All situations related to owning real estate property are not a fit for using factoring
– If you are an sales agent or some sort of broker who wants money in advance of commissions – there are a few specialty places that do it, but commissions are not clean invoices.
– Start-ups who have a new contract but need up-front money to get it going will not qualify – it’s considered mobilization capital.
– Factors dont cash out annual contracts (money today for funds that will be collected over the next year or years)
– No equipment, no inventory, no proforma or pre-billing
– And we definitely cannot pay to help a relative of a deposed government official from a foreign country.