How Factoring Works

Step 1: Send Invoice to a Factor – After you have completed your service or delivered your product to your customer, generate an invoice and send either the original or a copy to a factor.

Step 2: Verification & Approval – An account manager will review the invoice and any necessary documentation you submitted.  An account manager will also contact your customer to determine if the details of the invoice was agreed upon and to ensure that the service was provided or product was delivered.  Once your customer confirms these details, the invoice you submitted is approved and prepared for funding.

Step 3: Get Paid - Funding varies in how factors pay their clients.  Generally, factors can fund you in three ways: check delivered by standard mail, same-day wire transfer, or next-day direct deposit (option most businesses use).  Factor fees vary as well, but many companies can fund you as much as 95% of the value of the invoice you submitted.  Other fees may apply also depending on how you choose to get funded.

Step 4: Factor Receives Payment – After your invoice has been approved and you have been funded, your customer is invoiced by the factor.  Factoring companies are NOT collection agencies, therefore, your customers will not receive multiple notifications by email, phone, or letters asking for payment.  A factor simply waits for payment to be sent by your customer.  And if you have a non-recourse agreement, the risk of non-payment lies with the factor.  This allows you to move on and focus on the next project or order.

Factoring helps you get paid faster regardless of when your customer actually pays you – past 30, 60 or even 90 days.  This helps you focus on ways to build your business rather than having difficulties chasing checks and not knowing when your customer will pay.


                                                       http://www.mbnpaymentsystems.com/cash.php