Invoice Factoring FAQ’s

Are you a good fit for invoice factoring?

In order to be a candidate for invoice factoring, you must be invoicing other business customers for delivered goods or services. If you have sales, but cash flow issues are preventing you from keeping up with business expenses or increasing sales, then invoice factoring will benefit your business.

Is invoice factoring a loan?

Invoice factoring is not a business loan, rather a form of business financing. There is no money to be repaid and no long-term commitments. Instead, it is an advance on a business’ existing accounts receivable. The unpaid invoices are actually sold to the factoring company for immediate business capital.

What types of companies use invoice factoring?

Businesses in many different stages and industries use invoice factoring to help their business grow and expand. Factoring is suitable for start-ups, growing companies, and any businesses who can’t always wait 30-60 days for business customers to pay. Invoice factoring is a flexible form of financing that grows with a company as their financing needs change. Whitmore Finance works with the following industries, among others:

What is the main advantage of factoring?

Invoice factoring has several advantages, but the main advantage of factoring is the immediate cash flow boost it provides a business. Unlike many financing options, factoring does not require the borrowing business to tie collateral to the funds. For many business owners, this is the most enticing aspect of invoice factoring.

How much do factoring companies charge?

Generally, a factoring company will charge 1-5% (this is considered the “factoring fee”) of the total invoice value, depending on variables such as your factoring volume, invoice size, risk profile, and client credit. If your company factors many invoices and works with trustworthy clients, your fees will generally be lower.

What type of business typically utilizes invoice factoring?

We encourage small to medium-sized businesses to look into invoice factoring, as typically these are the businesses that would benefit most from quick cash flow boosts. It’s important to explore and weigh your options, so if you’re a business owner with questions about the factoring process, feel free to give Whitmore Finance a call at 972-293-4414 or contact us online.

What is factoring?

Factoring is the purchase of accounts receivable for immediate cash. Factoring gives businesses the power to ensure growth without diluting equity or incurring debt. Learn more about what is factoring.

What types of businesses do you factor?

Whitmore serves a wide range of industries, including trucking, temporary personnel agencies, printing companies, manufacturers, wholesalers, and many service industries such as janitorial and armed guard services. Most any business that sells a product on terms not exceeding 60 days can use factoring. Learn more about the industries we serve.

How can factoring help increase working capital?

Invoice factoring helps generate working capital for growth and everyday expenses by purchasing your accounts receivable for cash. Turn your unpaid invoices into working capital in as little as 24 hours. Learn more about working capital and cash flow management.

How can freight bill factoring help trucking companies?

Sometimes known as “bill of lading factoring,” our freight bill factoring service creates working capital from your accounts receivable. Learn more about Freight Factoring.

How can I use invoice factoring to improve my company's cash flow?

Invoice factoring, a combination of business capital finance and credit management, allows you to extend credit and still get paid cash for your product or service. This working capital tool maximizes cash flow and is often preferred to small business loans as a flexible method of small business financing. Learn more about cash flow support from Whitmore.