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How does the factoring application process work?

The spot factoring application process is definitely simpler than any bank or standard factorer that you could look at.  With some factoring companies, a spot factoring application is only one page long.  That's it. 

Additionally, most applications require four pieces of financial data: balance sheet, income statement, A/R aging summary and A/P aging summary. At that point you can be pre-qualified.  The factor can tell you "yes" or "no." If “yes,” the factor can move forward with your company.  Then each invoice needs to be analyzed to see if it can be funded. 

With spot factoring, a company doesn't have to submit all of its invoices as required in a standard factoring agreement.  The company can submit just one or two invoices or however many they pick out of their accounts receivable.  The spot factor will take a look at them and tell the company whether or not we can fund those invoices.  And that makes it an easily done process.

With small to medium size companies, the owners are busy doing the work.  They don't have time to be sitting around filling out pages and pages of documentation and looking through tax returns from five years ago, to pull them out and give them the factor.

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