When factoring invoices, most accounts receivable factoring companies will assign a value to the invoices they are looking to purchase. The difference between good factoring companies and the best factoring companies is they offer one low rate for all of your invoices instead of adjusting the rate based on who the debtor is.
Determining the Factoring Rate
There are a number of variables that go into determining the factoring rate for an invoice. Some of these include the creditworthiness of the customer who owes the invoice, the age of the invoice, the face value of the invoice and whether or not the invoice is current or past due. Every invoice can be considered for factoring regardless of its age or the inability of your company to collect on payment due.
Factoring receivables is quickly becoming a popular method for raising cash because the process doesn’t require the company to have any specific amount of time in business or have strong credit. The factoring rate assigned to an invoice really doesn’t have as much to do with the company factoring the invoice as it does with the customer who owes the debt. This means that all sorts of companies who don’t quality for traditional commercial financing based on industry type, poor credit, or even new companies, can find the cash they need to run their businesses by factoring receivables.
If you’re ready to see how the best factoring companies like Universal Funding will get you the funding you need, fill out a rate form or call 1-800-405-6035.