Who Qualifies For Factoring

If you are considering using an invoice factoring company to finance your accounts receivable, it’s important to know if your business qualifies. We posted a short list of industries that commonly use AR factoring services. It’s important to know that commercial factoring is strictly a business to the business industry. If you do business with other businesses, then you can sell your account receivables to an invoice factoring company (with some exceptions). The invoice factoring industry is mostly concerned about the strength of your invoices, rather than the length of time that you have been in business. It does not matter if you are a large company or a start-up business. If you have good quality invoices, you’re a great candidate to factor your aging receivables. We typically cannot factor in the medical industry (if your customers are insurance agencies), most constructions industries are challenging to factor in (especially if new construction, where there is retainage or when being paid by a general contractor), we cannot factor for freight brokers and we cannot factor when your customer is the Federal Government.

Is your company a Startup Business?

If you are a startup company, this is not an issue. Start-up businesses do face unique challenges. One of the biggest issues is raising capital to finance your newly formed company. Without a history of success and profitability or with a short credit history, it can be difficult to qualify for loans and raise needed funds. Many start-up companies do not have the ability to get traditional financing from a bank. If you are a newly formed company and you are able to get money from a bank, it’s going to be at an offensive rate. Once you have a loan in place, you now have to start paying this back. This is why most start-up companies turn to invoice financing companies to fund your aging invoice. When you factor your invoice you get immediate cash at low rates, without having a bank loan that you need to pay back.

Established Business Factoring

Alliance One LLC recognizes that your established business continues to face challenges. Slow paying customers, too much debt, too many liabilities, poor credit, low inventory, and competition are just a few of the situations that put a strain on your cash flow. Factoring is an excellent tool to help established businesses overcome these challenges and achieve their goals. If you have a growing business, you need to hire a larger staff, extend credit to additional customers, increase your net terms to be competitive and possibly have the added expenses of moving into a larger, more expensive location. To overcome the working capital issues that your business faces, many well-established companies tend to turn to AR Financing Companies to overcome the cash flow problems.

Are Credit Issues a Problem when Factoring my Invoices?

Do you have poor credit? Are you concerned that due to your poor credit that you might not want to be able to use an invoice factoring company? Are you concerned that you might be declined? Don’t be, getting approved for Invoice Factoring is simple. Factoring is not a bank loan, Alliance One simply purchases your aging invoices for immediate cash. If you have below par credit, you can still factor your invoices. Factoring companies want a strong invoice, we do not care about your credit scores.

Do you Qualify for Factoring?

You need to have a corporation or LLC that is open and in good standing
You cannot have any all asset liens/UCC filings against your company
You need to sell us at least one invoice each month over our one year agreement.
Your customers willing to pay us directly (we pay you, they pay us)
Your customers need to be credit-worthy
You need to pass a simple background check
All of the work needs to be 100% completed for us to purchase your invoices
Your invoices cannot be aged past 60 days and the net terms cannot be longer than 60 day
You cannot own or be affiliated with any of the companies that you are looking to sell us invoices from
You need to be in an industry that we factor in