small business

Who Qualifies for a Factoring Company?

As banks become more restrictive with their lending more and more business owners are turning to alternative lenders to find the additional working capital they need.  Invoice factoring, also sometimes referred to as invoice finance, is when a business owner sells their accounts receivable to a factor for immediate cash.  Business owners improve their cash flow with factoring without incurring any debt or giving up any equity.  Factoring is much simpler to apply for compared to bank lending. Factors look for two requirements to qualify new clients.

Open Accounts Receivable to Factor

The first requirement is having open invoices to either another business or governmental entity for delivered goods or services.  Companies in the pre-revenue stage will not qualify until they have accounts receivable.

Customers with Good Credit

Factors make their underwriting decisions based on the strength of your customer.  The factoring company will be most anxious to buy your invoices when your customers have a good credit report.  Factoring companies do not focus on their client’s financial record, so business owners with a few bumps and bruises on their personal credit report will often still qualify for invoice factoring. 

Many factoring companies have industries that they prefer to factor.  It pays to check out a factoring companies on-line reviews and if they are rated by an independent reporting site.  Having the right factor will provide the reliable cash flow that entrepreneurs need to grow their enterprises.

Since 1978, ARC is a factoring company dedicated to helping their clients grow and develop their own independent cash flow.  Our tenured team provides the expertise and service needed for business owners to confidently take on more and bigger projects.  For eight years in a row, we have been the Top-Rated Factoring company in America according to  Call Jack Stieber or Brad Gurney at 972-404-4726 or call complete our quick application form to learn how invoice factoring can help your business.

Voted best Invoice Factoring Company for SMBs for 2023 by


More Posts

best invoice factoring

Best Invoice Factoring Company

As a small business owner, you know how important cash flow is for the success of your business. If you’re struggling to get paid by