Frequently Asked Questions Regarding Invoice Factoring

Invoice factoring is simply a cash flow solution that turns invoices into quick cash without adding any additional debt. Common in several industries, invoice factoring allows companies to use the cash to pay for upfront costs, rather than waiting 30, 60, or even 90 days for a payment. Many companies rely on factoring to access the working capital they need to grow their business.

So how does invoice factoring work and how can you get started? Below is a list of the top 10 frequently asked questions regarding invoice factoring:

Will factoring hurt my company’s credit score?

No. Invoice Factoring, also known as Accounts Receivable financing, will not harm your credit score because you are not incurring any debt. Factoring remains outside of credit by using your receivables (outstanding invoices).

Can I factor past due invoices?

Most companies allow you to factor invoices up to 30 days old.

How are funds transferred to my business?

In most cases, you can get funds wired to your company bank account, get an electronic payment through ACH, get an express code, or receive a check by mail.

Does invoice factoring require personal guarantees?

Unlike traditional bank loans, invoice factoring does not require personal guarantees.

How will my customers know where to send their payments?

Your customers will be notified to pay the factoring company directly. Typically, they will receive a copy of the invoice clearly stamped with information about where to send the payment

Do factoring companies contact my company’s customers?

Yes, usually through a one-time mailed notification (Notice of Assignment) alerting the customer to send payments to the factoring company. Factoring companies understand the importance of maintaining business relationships, and will professionally handle all communications with your customer.

What happens if a customer sends a payment to my company instead of my factoring company?

When a payment is sent to you inadvertently, you should immediately forward the funds to the factoring company.

Can my start-up qualify for factoring services?

Absolutely! Because factoring focuses on the credit of your customers, it is a great way for a start-up business to grow their working capital.

Will my customers think my business is struggling if I factor?

Factoring is an accepted form of financing in the business world. When a company factors, it will put them in a stronger financial position, which helps build trust in your business.

How is factoring different from a bank loan?

The approval process for invoice factoring is quite simple, as compared to the lengthy approval processes often associated with bank loans. Also, unlike a bank loan, factoring does not create debt.

Frequently Asked Questions Regarding Working Capital

A Working Capital Advance from eCapital is a quick and easy way for your business to access money without adding any additional debt. Transportation businesses as well as many other industries rely on working capital to grow their businesses.

So how does it work and how can you get started? Below is a list of the top 10 frequently asked questions regarding Working Capital Advances:

Do I need great credit to qualify?

We consider any business owner with a personal credit score 500 and above. Because we look at monthly bank deposits along with personal credit, many business owners get approved and receive funding.

What is a Working Capital Advance?

A short term financial tool that provides a lump sum of funds into your company’s business account in exchange for a percent of your average monthly banking deposits.

What are the benefits of a working capital advance?

Since no two business are quite the same, each needs to be looked at individually. Usually, the amount you can get is based on your monthly banking deposits and personal credit. For more information or a free, no-obligation quote, contact eCapital and speak with one of our funding specialists today.

Is personal collateral required?

No, there’s no need for personal collateral. How’s that for keeping it simple? This is a short-term funding option so we look at your recent business account to determine risk level.

How is the working capital advance repaid?

Repaying your working capital advance is easy and headache-free. Monday through Friday, a daily-fixed amount will be deducted directly from your account via ACH until the full amount is repaid.

How do I apply?

Applying is fast and easy. eCapital provides a one-page application form that you complete and email back with minimal supporting documents. Our team will review your application and get back to you to discuss your funding options.

How long does it take to receive the funds?

Once approved, you can receive funds in as little as 24 hours. Funding times may vary depending on verification and funding amount.

Can I use the funds for anything?

Absolutely! A working capital advance is a short-term funding option that gives you the ability to cover operating expenses like repairs, fuel, payroll, taxes, insurance, and more, without the restrictions you might expect.

Who do I contact if I have questions?

Have additional questions? Feel free to call us at (800) 705-1500. Continue to check our blog for helpful financing tips!

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