When business owners seek working capital, they weigh their financing options. They take a hard look at a number of variables, including timing, convenience, costs, and accessibility. Whether they explore traditional bank loans, consider high-interest credit cards, or try to borrow from friends and family, different financing options each come with their own pros and cons. One consideration is the approval process. Business owners ask themselves, “Will it be fast, easy, affordable, and possible for my company to approved for funding?” With invoice factoring, the answer is “Yes.”
The approval process for factoring is definitely fast and easy, especially when compared to meeting with a bank’s loan officers or a group of friends or family members! Some factoring companies can approve and welcome new clients within a day of receiving their application and supporting documents — with their first funding sent promptly after approval. The process typically takes just a few phone calls. The approval process for applicants can easily be completed with basic paperwork and emailing or faxing necessary papers to the factoring company’s underwriting department. It’s not expensive to start the application process. Some factoring companies advertise that they have no application fees or that they require only a small due diligence fee. Lastly, invoice factoring is accessible to companies regardless of their time in business or their credit history. Even businesses with a low credit score and a history of getting turned for financing can qualify for invoice factoring. The important point to remember is that the factoring company evaluates applicants on the creditworthiness of their customers, not the applicant’s own past payment history.
Benefits of the Factoring Approval Process
- Faster than getting approved by a bank or other traditional financial institution
- Easy and affordable approval process
- Accessible to new startups and businesses with less-than-perfect credit histories