17 Jun Invoice Factoring: Top 5 Most Popular Business Loan Criteria (2 of 5)

Minimum Criteria: Invoice Factoring (Part 2 of 5)

This is part 2 of 5: (view previous)

Do you find that you’re always waiting for customer payments or have a heap of cash outstanding to you? Waiting for the cash to flow into your business can be frustrating, but invoice factoring (aka “debtor finance”) offers a short-term solution as you await your customers’ payments.

Invoice factoring companies will advance you about 85% of the total invoice value. Once the balance is paid by your customer, the factoring company will collect their fees, which is typically based on the amount of time it takes your customer to pay you back. You’ll receive the balance amount, minus fees, once the invoice is paid. You should expect to pay away about 1%-5% of your invoice value however, the benefit of early payment from the factor should outweigh this cost.

Invoice Factoring Criteria
Years in Business Required: 6 months +
Minimum Revenue: $50000+
Personal credit score 400+
Company credit: No unpaid defaults.
Tax debt: Yes in most cases
Profitability required? Not considered
Bankruptcy allowed? Yes you may still be approved.
Credit Card volume a factor? No.
Accounts Receivable a factor? Yes.
Second position allowed? Yes.

Next loan type coming up is Equipment Loans.

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