Here's why: Approval for invoice factoring doesn't hinge on your company's credit history. Instead, it depends on the creditworthiness of your customers. Companies that purchase invoices will evaluate your customers based on their stability and payment track record. The invoice factoring company's main concern is determining how likely your customers will pay and how quickly. Apart from your customers meeting qualifications, your invoices must also pass certain criteria. There can't be any existing primary liens on your invoices, meaning no other company should have a claim on the payments once they arrive. This ensures that the company purchasing your invoices has a clear right to collect the funds in your place.
Documation is a leading provider of document_centric workflow and document management software and services solutions to UK, European and global companies. By removing paper and manual processing from business operations we help our clients reduce costs, improve efficiencies, maintain business control and achieve legal compliance. We have an array of public and private sector customers using our invoice processing and document archiving solutions.
To give you an idea about how invoice factoring transactions work, here are some of the main steps in the process: You submit an application to an invoice factoring company. After you're approved for invoice factoring with the company, you can start forwarding your customers' invoices to the company for cash advances. (Your customer will receive a bill from the factoring company, which will be responsible for all payments processing activities related to the invoice.). Assuming everything checks out, you'll be advanced up to 90 percent of the value of the purchased invoices. Your customers most likely submit payments to the company that bought their invoice. This company, in turn, will forward you the remaining, unpaid portion of the invoice excluding the invoice factoring fee, of course.