Unfortunately many unscrupulous borrowers have come along before you to take advantage factoring companies. Fabricated financial statements, fake invoices, stealing payments from customers, multiple overlapping companies, IRS liens, undisclosed bankruptcies, selling to customers who couldn’t get a $500.00 loan from a bank. Factors have seen it all, and over the years successful factoring companies put proper procedures in place to mitigate the risk associated with invoice factoring.

Business owners new to invoice factoring need to understand that everything has to be independently verified. Articles of Incorporation have to be accepted by State Agencies, 941 payroll taxes have be confirmed as paid and up to date, are the customers creditworthy, and most importantly has the work on which the invoice is based been completed and accepted.

Many factoring deals have gone by the wayside because potential borrowers do not realize lenders are partners in bringing capital to the table. And as a partner providing accounts receivable financing to help grow a business, everything has to be above board and transparent. Full disclosure beats a surprise every time.