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Qualifying for Invoice Factoring If you’re researching types of financing, you may be interested in learning more about invoice factoring. Invoice factoring, sometimes referred to as invoice financing, isn’t a traditional loan. Rather, it’s a process in which the factoring company purchases your invoices so you can get immediate cash for them. Invoice factoring can improve your cash flow without incurring any new debt. Compared to other types of financing such as bank loans, invoice factoring is actually simple to apply for. You do, however, need to meet certain requirements. The following are the main invoice factoring requirements for getting started.

Unpaid Invoices to Factor

The primary requirement for invoice factoring is having invoices in the first place.  The invoices we are referring to are the ones you issue to your business customers for goods or services rendered. If you are a brand new business still in the process of acquiring clients, you’ll have to wait until you have some invoices to factor.

Clients With Established Credit

One difference between invoice factoring and most other types of financing is that your clients’ credit is more important than your own. The factoring company will be buying your invoices and collecting from your clients, so your customers are the ones who need to have established credit, instead of you..

Business Credentials

In order to apply for invoice factoring, you need to be set up as a legal business entity. This includes the following:

  • Sole proprietorship, LLC, or Corporation
  • A Tax ID number.
  • A business bank account. 

If you are already running a business with customers who pay invoices but are operating informally you will have to take the above steps so you are operating as a documented business.

Industry-Specific Requirements

Invoice factoring is used in many industries. Certain industries may have unique requirements.  For example, if you’re a trucking company that wants transportation factoring, you need an MC/DOT Number. If you have a staffing company, you’ll need proof of worker’s compensation and liability insurance.

How to Get Started With Invoice Factoring

The above is a checklist of the main requirements for invoice factoring. If you’re ready to learn more about this type of financing, the next step is to find a reliable company to handle your invoices. Riviera Finance is one of the most reputable companies, with over 50 years of experience working with all types of businesses. The benefits of working with Riviera include:

  • Experienced factoring professionals well versed in the protocol for your business industry 
  • Flexible financing with no monthly minimums that works with the needs of your company.
  • Credit guarantees on factored invoices provides you with bad debt protection.
  • Complete collections services customized to your needs
  • 25 Locations with local factoring professionals

Turn Invoices into cash

Invoice factoring can help your business boost cash flow, allowing you to more easily meet expenses, invest in supplies and marketing and grow faster. To learn more about invoice factoring, contact Riviera Finance today.

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