Who Qualifies for Accounts Receivable Factoring?

Who can get accounts receivable factoring? Obviously, if you want to apply for this type of financing, you’ll need invoices that you can sell. Other than that, you should be able to provide three months’ worth of official sales documentation. If you meet these requirements, then you’re ready to apply.

To apply for a business term funding, you simply have to fill out an application and provide three months’ worth of business bank statements. We don’t require extensive paperwork, perfect credit scores, or try to make things complicated. As long as you run a profitable business, you have an excellent chance of qualifying for small business funding with First Down Funding.

How to Apply for Invoice & Receivables Financing

Now, how do you apply for accounts receivable factoring? You’ll use the same process that you would use for any other First Down Funding financing option.

Gather Your Documents

First, you’ll want to make sure that all of your documents are in the same place. Your application will require these documents, and if you have them ready before you get started, your entire application process will become so much faster and easier. Here’s what you’ll need:

• Driver’s license
• Voided business check
• Bank statements
• Business tax returns
• Account Receivable Aging report, Accounts Payable report, debt schedule
• First Down Funding 1 Page Application

Submit Your Application

Next, all you have to do is submit your application. You can start your application online, or you can call us if you have any questions. Once you’ve submitted your application, one of our financial experts will call you to discuss your best small business funding options. From there, you’ll finalize your application, and you’ll hear back from us within 24 hours about your approval status. After that point, you may receive your funding in as little as a few business days.

How Does Accounts Receivable Factoring Work?

Accounts receivable funding work very differently from most other business funding. When you have an unpaid invoice from one of your clients, you can sell that invoice to a third party, otherwise known as a “factor,” for a small discount. The factor will pay you right away for the invoice. This process makes your income steadier and more stable so that you can depend on your income instead of making random guesses about your financial future.

Meanwhile, now that the factor owns the invoice, it’s up to that factor to collect the money from the person that owes it.

How Much Does Accounts Receivable Factoring Cost?

Compared to many business funding options, accounts receivable factoring has a fairly low cost. Since you sell your invoices at a discount, you should count that discount among your costs. The factor will also collect a small percentage of the invoice. That percentage makes up the other part of the cost. At First Down Funding, our invoice factoring percentages start at 5.8%.