Documentation

These are vital to verify the legitimacy of your business. Factoring companies will usually request documents such as your business license, Articles of Incorporation or Articles of Association, and any other official documentation that confirms the identity and legitimacy of your business.

Financial statements offer an overview of your business's financial health. Key financial statements include your balance sheet, income statement, and cash flow statement. If possible, provide statements for the last two to three years to show your financial trajectory.

These reports show what your clients owe you (receivables) and what you owe suppliers (payables). Aged receivables reports are crucial to factoring companies as they show the frequency and reliability of your invoice payments. They also give an overview of your clients and their payment habits.

Your sales ledger provides a detailed view of your sales history and outstanding invoices. Factoring companies use this to assess the volume of your sales and the level of risk associated with your invoices.

Provide a detailed list of your customers, focusing on those who will be included in the factoring arrangement. The list should include each customer's contact information, creditworthiness, and transaction history. This information enables the factoring company to assess the credit risk associated with your clients.

Present a selection of invoices you intend to factor. These invoices should be legitimate, free from disputes, and due from creditworthy customers.

These are usually required to confirm the financial state of your business and your responsibility in handling fiscal obligations. You may need to provide both personal and business tax returns.

Although not always necessary, a detailed business plan can give a factoring company insight into your operations, business model, and growth strategy. This document can be especially important for newer businesses.

Factoring companies might request these reports to get insight into your financial history and responsibility.

If you've previously entered into a factoring arrangement with another company, the new factoring company may ask to see the agreement. They'll want to verify that there are no outstanding obligations that could affect the new factoring agreement.