Factoring - How Does it Work?

What is a receivables finance company? Receivables finance services complete your financial package with working capital financing, credit risk protection and collection services.

What is the major benefit of factoring? You receive immediate cash for accounts receivable instead of waiting 30, 60 or even 90 days with factoring. It is like your clients are on COD (Cash on Delivery) basis. You enjoy the increased cash flow, while we provide credit, collection expertise and services, freeing you to concentrate on your core business.

What type of invoices can I factor? Factoring may be applied to almost any eligible invoice for a service already performed or a product delivered to a credit-worthy business or government entity.

Does a bank loan make more sense for my small business than factoring? Probably not. Banks often have restrictive lending requirements relating to cash flow, profitability, equity and years in business that limit them from making loans to many small to mid-sized businesses.

Where does my customer send the payment? The payment is made out and mailed directly to Coface.

How will my customer know to send the invoice payment to the factor? When you open the factoring account we will notify your customers to submit payments to us on your behalf. Each invoice will be labeled with payment instructions.

Will there be an impact on my customer? The only difference to your customer is where to send and whom to address the payment. In addition, your customer relationship may improve since you will not be making the ‘uncomfortable’ collection calls.

How will you treat my customer? We will treat your customer with the same degree of integrity and professionalism that you provide. Any serious issues that arise will be discussed with you and handled in an appropriate manner after discussions with you