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FAQ

Invoice Factoring and Accounts Receivable Financing

What is invoice factoring for B2B companies?

Invoice factoring allows a B2B company to sell eligible unpaid invoices to Faccorp for immediate working capital. Faccorp advances a portion of the invoice amount, the Payor sends payment directly to Faccorp, and the remaining balance is released to the Seller after payment, less agreed fees.

How does invoice factoring help improve business cash flow?

Invoice factoring converts eligible accounts receivable into cash before customers pay. Businesses can use the working capital for payroll, materials, suppliers, operating expenses, or new work instead of waiting 30, 60, or 90+ days for payment.

What is the difference between invoice factoring and accounts receivable financing?

Invoice factoring is a purchase of eligible accounts receivable. Accounts receivable financing is a broader term that can include factoring or a loan secured by receivables. Faccorp reviews the business, its invoices, and its Payors to determine the appropriate structure.

Can I get working capital if my customers pay on 30, 60, or 90 day terms?

Yes. Faccorp provides receivables-based working capital for B2B companies whose customers pay on terms. Funding is based on eligible invoices, Payor credit, verification, and Faccorp’s underwriting and approval.

Can Faccorp help turn unpaid customer invoices into working capital?

Yes. Faccorp purchases approved B2B invoices and can advance up to 90% of eligible invoice amounts. The advance rate and other terms are set for each transaction based on size and risk.

How fast can a business get funding through invoice factoring?

Timing depends on how quickly the business provides complete financial, legal, ownership, Payor, and invoice information. After underwriting, documentation, lien review, verification, and account setup are complete, approved invoices can be submitted for funding.

Do I have to factor all of my invoices, or can I choose specific customers?

You can request funding for selected Payors or for a broader group of accounts.

What makes an invoice eligible for factoring?

An eligible invoice generally represents a completed B2B sale or service, is due from an approved creditworthy Payor, can be verified, is not disputed, and is not subject to another party’s claim. Final eligibility is determined under the factoring agreement and Faccorp’s credit approval.

Does my customer’s credit matter more than my company’s credit?

The Payor’s ability and willingness to pay is a primary part of Faccorp’s credit decision because the Payor is the expected source of repayment. Faccorp also reviews the Seller, invoice support, lien position, payment control, and the overall transaction.

Can invoice factoring help with payroll, suppliers, or new projects?

Yes. Businesses commonly use proceeds from invoice factoring for payroll, materials, suppliers, operating expenses, and new work. Funding remains subject to available eligible accounts and the terms of the facility.

Alternatives to Traditional Bank Financing

Can Faccorp help if my bank will not increase my line of credit?

Faccorp may be able to provide invoice factoring or an asset-based lending facility when a bank will not increase a line. Approval depends on eligible accounts receivable, Payor credit, available collateral, lien position, payment control, and the overall risk.

Can I get business funding if my company does not qualify for traditional bank financing?

Yes. Faccorp works with B2B companies that may not fit traditional bank requirements because of their industry, operating history, owner credit, financial performance, or accounts receivable concentration. Every transaction is reviewed individually.

Can a growing business use factoring when cash flow is tight?

Yes. Growth can create a cash gap when payroll, inventory, or materials must be paid before customers pay their invoices. Factoring can turn eligible receivables into working capital to help support that growth.

What financing options are available when a bank says no?

Depending on the business and its collateral, alternatives may include invoice factoring, accounts receivable financing, or asset-based lending. Faccorp focuses on B2B receivables and may also consider inventory, equipment, or limited term financing when accounts receivable are part of the structure.

Can Faccorp help businesses with challenged credit or a weak balance sheet?

Challenged credit or a weak balance sheet does not automatically prevent approval. Faccorp places significant weight on Payor credit, invoice quality, verification, lien position, cash control, and the overall transaction structure.

Asset-Based Lending and ABL Financing

Does Faccorp provide asset-based lending or ABL financing?

Yes. Faccorp provides asset-based lending facilities for qualified B2B companies. Accounts receivable are the primary collateral, and some structures may also include eligible inventory or equipment.

What is the difference between factoring and asset-based lending?

Factoring is the purchase of eligible accounts receivable. Asset-based lending is a loan secured by business assets, usually starting with accounts receivable and sometimes including inventory or equipment. Faccorp determines the appropriate structure after reviewing the business and collateral.

Can I borrow against accounts receivable and other business assets?

Qualified businesses may be able to obtain an ABL facility supported by eligible accounts receivable and, in some cases, inventory or equipment. Advance rates, reserves, reporting, and availability are determined during underwriting.

Is ABL a good option for a company that needs a larger working capital facility?

ABL may be a good fit for an established company with a solid receivables base, reliable reporting, and sufficient collateral. It can provide borrowing availability that adjusts with eligible assets, subject to the facility terms.

Can Faccorp structure working capital facilities up to $5 million?

Yes. Faccorp can structure factoring and asset-based working capital facilities up to $5 million, subject to underwriting, documentation, collateral, concentration, and final approval.

Industry-Specific Financing

Does Faccorp provide factoring for staffing companies?

Yes. Staffing companies often pay employees weekly while customers pay invoices on longer terms. Faccorp can purchase eligible staffing invoices and provide working capital for payroll and operating expenses, subject to verification and approval.

Does Faccorp finance oil and gas service companies?

Yes. Faccorp provides receivables-based financing for qualified oil and gas service companies with eligible B2B invoices, verifiable work, acceptable Payors, and full control over customer payments.

Does Faccorp provide accounts receivable financing for manufacturers?

Yes. Manufacturers can use eligible customer invoices to obtain working capital for materials, production, payroll, and new orders. Faccorp reviews the invoice support, Payor credit, dilution, and transaction structure.

Does Faccorp finance wholesale and distribution companies?

Yes. Wholesale and distribution companies may use factoring or ABL to support inventory purchases, supplier payments, and larger customer orders. Funding depends on eligible receivables and the approved facility.

What types of B2B industries does Faccorp finance?

Faccorp focuses on B2B companies, including staffing, manufacturing, oil and gas services, wholesale and distribution, and professional services. Faccorp does not finance healthcare receivables or construction receivables that includes retainage or bonded work.

Growth, Projects, and New Businesses

Can factoring help if my company wins a large new contract?

Yes. A large contract can create a cash gap between completing the work and collecting the invoice. After the work is completed and an eligible invoice is issued, Faccorp may purchase the invoice and provide working capital, subject to approval.

Can Faccorp help finance a purchase order or project startup costs?

In certain situations, Faccorp may provide purchase order financing or another structure tied to a receivables transaction. The order, supplier, customer, margins, fulfillment risk, and expected invoice must be reviewed before approval.

Can invoice factoring help a newer company get working capital?

Yes. A limited operating history does not automatically disqualify a company. Faccorp reviews the Payors, invoices, ownership, documentation, lien position, payment flow, and overall risk.

Can a startup or newer business qualify for receivables-based financing?

A startup or newer B2B business may qualify after it begins generating eligible invoices to approved Payors. Faccorp does not fund projections alone; the financing must include an acceptable accounts receivable component.

Can I get funding without giving up equity in my business?

Yes. Faccorp’s factoring and asset-based financing do not require the Seller to give Faccorp ownership equity. The facility is based on receivables, collateral, and the agreed transaction structure.

Customer Payments and Invoice Verification

Where do customers send payment when invoices are factored?

Payors are instructed to send payment directly to a Faccorp-controlled lockbox or an approved DACA account. The payment instructions are provided through a notice of assignment and may also appear on the invoice.

Is invoice factoring a sign of financial weakness?

No. Businesses use invoice factoring for many reasons, including rapid growth, long customer payment terms, seasonal needs, payroll timing, and limited access to bank financing. It is a working capital tool tied to B2B receivables.

Why does Faccorp verify invoices with the customer?

Invoice verification helps confirm that the product or service was delivered, the amount is correct, the invoice is approved for payment, and no dispute or offset exists. Verification is an important part of protecting both the Seller and Faccorp from billing issues or fraud.

Brokers, Bankers, and Referral Partners

Does Faccorp work with brokers and referral partners?

Yes. Faccorp works with commercial finance brokers, bankers, consultants, accountants, attorneys, and other referral partners who introduce B2B companies seeking working capital.

Can commercial bankers refer clients to Faccorp?

Yes. Bankers can refer clients that need working capital but do not currently fit the bank’s credit requirements. Faccorp can review factoring or ABL options while keeping the banker informed, subject to the client’s authorization.

What types of businesses should brokers refer to Faccorp?

A strong referral is a B2B company with eligible invoices, creditworthy Payors, verifiable performance, and a working capital need. Common situations include growth, payroll pressure, long payment terms, a bank decline, or an outgrown credit line.

Does Faccorp pay referral fees to brokers?

Yes. Faccorp offers ongoing referral compensation to approved brokers under a written broker agreement. The percentage and payment terms are established with the broker before the transaction closes.

Why should referral partners work with Faccorp?

Faccorp gives referral partners direct access to decision-makers, clear communication, and practical credit feedback. Each opportunity is reviewed on its own facts, and approved brokers can receive ongoing compensation for funded relationships.