Confirm your business qualifies for invoice factoring, i.e., it operates in the B2B space and invoices clients for goods or services provided.

Review all your unpaid invoices to ensure they are valid and that your clients acknowledge them. 

Check the creditworthiness of your clients as your factoring agreement will depend on their ability to pay their debts. 

Evaluate your invoice concentration. If your business is highly dependent on a few clients, develop a strategy to manage this risk.

If you have foreign clients, understand the risks involved, such as exchange rate fluctuations and international trade laws, and demonstrate how you can mitigate these issues.

Prepare a clear financial picture of your business by gathering your recent financial statements, including balance sheet, income statement, and cash flow statement.

Assemble key business documents such as your articles of incorporation, business licenses, and any relevant industry certifications.

Ensure your business is in good standing legally and with tax authorities. Resolve any outstanding issues before applying for factoring.

Decide whether recourse or non-recourse factoring is suitable for your business. Understand the implications of each option.

Be clear on the terms of the factoring agreement including the advance rate, the factoring fee, the length of the contract, and whether there are any additional charges.

Research potential factoring companies to find a reputable partner that understands your industry and can meet your specific requirements. 

Prepare a list of questions to ask potential factoring companies about their processes, rates, terms, and customer service.