Person holding larger marker writing the words accounts receivable on a white piece of paper with a calculator nearby

 

Accounts receivable financing allows your business to sell open invoices to a factoring company. Invoice factoring is a quicker and simpler process than a conventional business loan, so your business can get access to urgently needed cash in a much shorter period of time than from a bank. There are a few variables that effect the process of financing your company’s receivables that you should understand if you are interested in this funding solution. Here is an overview of the application and approval process and how factoring rates are determined when your business decides to sell open invoices.

1. Rates

We will determine and propose the factoring rate and advance rate for your business, which gives you a fuller picture before you start the application process. Universal Funding will base your rates on a few variables:

  • Your sales volume and invoice amounts
  • Trends in your customer payment cycles
  • Credit standing of your customers
  • Current climate of your industry

2. What You Need to Apply

Universal Funding has a one-page application that is fast and easy to complete. In addition to the application, we also request that you provide:

  • Your company’s most recent accounts payable and accounts receivable aging reports
  • A sample invoice
  • Your company’s previous year’s taxes

3. The Approval Process

Approval for factoring is much faster than a business loan since the finance company is purchasing an asset, your invoices, instead of structuring a loan. Your invoices and the customers associated with them are assessed quickly.

There are a few other elements we will need to consider for specific cases, but they do not necessarily mean your business cannot sell invoices. If you have tax issues, little or no credit history, or if a lender already has the right to your accounts receivable as collateral, you still can be approved for invoice factoring. Since our underwriting department is in-house, the application process is swiftly moved to the Board for review. Once approved, you will also need to show business registration papers, such as your Articles of Incorporation or your DBA filing.

Learn More About the Factoring Process

Universal Funding can answer your specific questions about invoice factoring and what you will need to get started on the approval process. Fill out our online rate form or call us at 1-855-782-1493 today to request a no-obligation consultation.