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By Travis Yule — CEO & Founder, Full Send Funding
On a $500,000 book a line costs 13.3% of cash advanced and factoring 23.5%; the line underwrites you, factoring your customers, so the cheaper is harder to get.
In one sentence: Factoring sells the invoice and a receivables line borrows against it; on a $500,000 book the line costs 13.3% against factoring’s 23.5% per dollar of cash but is underwritten on the business, not its customers, so the cheaper product is the harder to get — an advance from deposits suits a gap with an end.
Factoring and a receivables line of credit finance the same asset and are not the same product. Factoring is a sale: a factor buys your invoices, pays you most of the face value today, collects from your customer, and returns the balance less a fee. A receivables line is a loan: a lender lets you borrow against a formula applied to your eligible invoices, you collect from your customer as before, and you pay interest on what you drew. On a $500,000 book of receivables, worked below under stated assumptions, whole-ledger factoring delivers $425,000 of cash per turn at a cost of $100,000 a year — 23.5% annualized on the cash actually advanced — while a receivables line delivers $328,000 of availability at $40,000 a year on a $300,000 average balance, 13.3% all-in. The line is cheaper by a wide margin and harder to get by a wider one.
The usual framing compares a factoring fee to an interest rate and stops. That comparison is wrong in both directions. A factoring fee is charged on the face of the invoice while the cash you receive is the advance rate’s share of it — commonly 80% to 90% in the terms we see, an illustrative range rather than a surveyed one — and it is charged in time tiers rather than accrued daily, so the annualized cost depends on which side of a tier boundary your customer pays on. A line's interest rate is quoted on the drawn balance, but the facility fee, the monitoring fee and the field exam are charged whether you draw or not, so a lightly used line costs more per dollar than its rate says. The right comparison is the one below: dollars of cost per dollar of cash actually in hand, for the days it was actually in hand.
There is a third option that the factoring-versus-line debate usually leaves out, and it is the one we provide. A revenue-based advance is underwritten from bank deposits rather than from the receivable ledger. It costs more per year than a bank line, it is faster and less documentary than either, and it is the right tool for a defined gap and the wrong one for a permanent balance. The last section says where the boundary is.
Both products sit under Article 9 of the Uniform Commercial Code, which governs security interests in receivables and also reaches the outright sale of accounts — which is why a factor files a UCC-1 financing statement against the invoices it buys just as a lender does against the ones it lends on.[1] That shared filing is the first thing to understand, because it is what makes the two products mutually exclusive: whoever files first against your receivables has priority, and the second party will not advance against collateral the first already holds. The mechanics of that queue are worth reading before you sign either agreement.
Beyond the filing, the two diverge on every axis that matters.
The structural terms of the two products as commonly documented in the agreements we see; the advance-rate range is illustrative, not surveyed. Individual agreements vary; the recourse schedule and the eligibility rules are the terms to read.
Factoring is a purchase. The factor pays an advance — the advance rate times the face — and holds the remainder as a reserve. When your customer pays the factor, the factor deducts its fee from the reserve and rebates the rest to you. The fee is a discount from face expressed as a percentage, in our experience usually in tiers of time: one rate if the invoice pays within thirty days, a further increment for each additional ten or fifteen days it stays open — there is no public dataset of factoring fee schedules, so the tiers here are illustrative. Under recourse factoring you retain the credit risk: an invoice unpaid after a stated period, commonly ninety days in the agreements we see, is charged back to you, either against the reserve or against your next advance. Under non-recourse factoring a defined slice of that risk transfers to the factor — in practice the account debtor's insolvency, within limits, and almost never a dispute, a short-payment or slow payment. The schedule of what transfers, not the label on the cover page, is the term to read.
Notification is the other axis. In notification factoring the account debtor receives a written notice of assignment directing payment to the factor. Once it has that notice, the Code lets the debtor discharge the invoice only by paying the assignee, so a customer that keeps paying you by mistake has not paid at all.[1] That is what makes the arrangement enforceable, and it is also what makes it visible: your customer's accounts payable department knows you are factoring. In non-notification factoring the customer keeps remitting to a lockbox in your name that the factor controls, and is not told — which, in our experience, costs more, is offered to stronger files, and typically converts to notification the moment an invoice goes past due.
A receivables line is a loan against a borrowing base. Each month, or each week on a tighter facility, you submit an aging; the lender applies its eligibility rules and its advance rate and tells you what you may draw. You keep collecting from your customers, collections go into a blocked or controlled account that pays down the line, and you redraw as you invoice. Interest accrues daily on the drawn balance. Fees — a facility fee on the commitment, a monitoring fee, an annual field exam, sometimes an unused-line fee — are charged on the facility whether or not you use it. It is the most efficient structure available to a business that can qualify for it, because an undrawn line costs almost nothing while an unspent term facility accrues in full.
The example is constructed, not surveyed, and every input is stated so that a reader can substitute their own. Call the business Harlow Industrial Services: $4,000,000 a year of billings to commercial customers, a book of $500,000 outstanding at any time, which means the book turns 8 times a year and the average invoice is paid in 365 ÷ 8 = 45.6 days. To keep the fee arithmetic transparent, assume every invoice pays at that average. There is no public dataset of factoring advance rates, discount fees, reserve terms or receivables-line pricing for firms of this size — the figures below are illustrative ranges drawn from the terms we see offered to a business of this profile, stated as assumptions, not a survey.
Terms: an 85% advance rate, a discount fee of 1.5% of face for the first 30 days and 0.5% for each further 10 days or any part of one, recourse at ninety days, whole-ledger — every invoice is sold, which in our experience is what most factors require from a business this size.
Inputs: a $500,000 book, 8 turns a year, every invoice paid at the 45.6-day average, an 85% advance rate, and a fee of 1.5% of face for the first 30 days plus 0.5% for each further 10 days or part. Constructed, not surveyed.
Read the fourth row. At 45.6 days the invoice is thirty days plus a fraction of two further ten-day tiers, and a fraction counts as a whole, so the fee is 2.5% of face: $12,500 on each $500,000 that goes through the book. Across 8 turns that is $100,000 a year. The cash Harlow actually had in hand was $425,000 per turn, not $500,000, so the cost per turn on the cash is 2.94%, and across 8 turns the annualized cost on cash advanced is 23.5%. That is the number to hold against a line, and it is roughly nine times the 2.5% the factor's rate sheet leads with.
The tier structure produces an effect worth seeing on its own. Because the fee steps up in ten-day increments while the money is out for a continuous number of days, the annualized cost is not a flat number. It is a sawtooth.
Under a 1.5%-for-30-days fee stepping 0.5% every 10 days, the annualized cost on an 85% advance jumps at each tier boundary and is highest on the days just past one; a receivables line at 13.3% all-in is flat.
Factoring: fee = 1.5% + 0.5% × (ten-day tiers started after day 30); annualized = fee ÷ 0.85 advance rate × 365 ÷ days. Line: $40,000 a year ÷ $300,000 average drawn, from the line-cost table.
At exactly thirty days the cost is 21.5% annualized. At thirty-one days the next tier has started and the same invoice costs 27.7%. Every tier boundary produces the same jump, and the boundaries fall exactly where commercial customers actually pay — a customer on net-30 terms that runs a five-day payables cycle pays on day thirty-five, which is the highest point on the chart at 24.5%. A factor whose tiers are fifteen days long, or whose fee is a single flat rate for the first thirty days and a daily rate thereafter, is materially cheaper for the same headline percentage, and that is the first term to negotiate. The flat line across the chart is the receivables line at 13.3% all-in on a $300,000 balance, which does not care what day the customer pays on.
The line does not start from $500,000. It starts from what the lender will count.
Inputs: $40,000 of invoices over ninety days, a largest debtor at 35% of the $500,000 book against a 25% concentration limit (the excess share of the book is excluded), and an 80% advance rate on eligible receivables.
Two deductions are common in the facilities we see, and both are stated here as assumptions. Invoices more than ninety days past invoice date are ineligible — say $40,000 of Harlow's book. And Harlow's largest customer is 35% of the book against a concentration limit of 25%, so the excess — 10% of $500,000, or $50,000 — is excluded. Eligible receivables are $410,000, and at an 80% advance rate the availability is $328,000. That is the most Harlow can draw on a book of $500,000, and it recomputes every time an aging is submitted: a slow quarter that pushes more invoices past ninety days shrinks the line at exactly the moment it is needed, which is the structural weakness of the product and the reason lenders monitor it as closely as they do.
Pricing: interest at 11% on the drawn balance, stated here as an assumption rather than tied to a published index; a facility fee of 1% on a $400,000 commitment; and $3,000 a year of monitoring and field-exam cost. The fixed items come to $7,000 a year regardless of use, which is why the all-in rate depends on how much of the line Harlow actually runs.
Inputs: interest at 11% on the drawn balance (an assumption, not tied to a published index), a 1% facility fee on a $400,000 commitment, and $3,000 a year of monitoring and field-exam cost. All-in rate is the total divided by the average drawn balance.
At a $300,000 average balance the line costs $40,000 a year, 13.3% all-in. At $100,000 the same facility costs $18,000, 18.0% — still well under factoring, but the gap between the quoted 11% and the delivered 18.0% is the fixed fee, and a business that opens a line it barely uses pays it in full.
Whole-ledger factoring advances against everything, which is more cash than most businesses need and more fee than most should pay. The honest comparison is on the cash the business actually requires. Suppose Harlow's real gap — daily operating outflow multiplied by realised collection days, net of what supplier terms cover — is $150,000. To have $150,000 of cash from a factor at an 85% advance, Harlow must sell $176,471 of face per turn, $1,411,765 a year, at 2.5%: $35,294 in fees. To have $150,000 from the line costs $23,500: 15.7%.
Factoring cost scales in proportion to the cash because the fee is proportional to face; the line scales less than proportionally because its fixed fees do not move.
Factoring: cash ÷ 0.85 advance rate × 8 turns × 2.5% fee. Line: cash × 11% + $7,000 of fixed fees (1% of $400,000 plus $3,000 monitoring). Same inputs as the worked tables.
The factoring bar scales in exact proportion to the cash because the fee is proportional to face; the line's bar scales less than proportionally because $7,000 of it is fixed. At every level the line is the cheaper instrument — by 23.5% at $100,000 of cash, a third at $150,000 and 41% at $250,000, because the fixed $7,000 weighs on a small draw and disappears into a large one. The question is never which is cheaper. It is whether the business can qualify for the cheaper one, and whether it needs the money on a timetable the cheaper one can meet.
They are underwriting different things, and it is the reason the two products serve different businesses.
A factor underwrites your customers. The question is whether the account debtor will pay, so the file is built from the debtor's credit, the aging of your invoices with that debtor, and the history of dilution — credits, short-pays, returns and disputes that reduce what an invoice finally collects. A business six months old with weak owner credit and three creditworthy commercial customers is an acceptable factoring file. A business ten years old with strong credit and a hundred small customers of unknown standing is a harder one. What a factor will not buy: invoices to consumers; progress billings on construction work, because the receivable is subject to retainage, back-charges and the pay-when-paid clause above it — the reason contractors are illiquid while profitable is the same reason their receivables are hard to factor; invoices with a contra relationship, where the customer is also a supplier and can set off; invoices to a related party; and invoices for work not yet complete or goods not yet delivered, which is what purchase order financing exists for.
A receivables lender underwrites you, and then polices the collateral. The bank or asset-based lender wants operating history, financial statements, a clean UCC search, a personal guarantee, and a business that can produce a reliable aging every month and survive a field examiner reconciling that aging to the general ledger and to cash. The eligibility rules — past-due exclusion, concentration limit, cross-aging (if more than a stated share of one debtor's invoices are past due, all of that debtor's invoices become ineligible), contra exclusion, foreign debtor exclusion — are how the lender protects the borrowing base against the ledger deteriorating between reports. A business that cannot produce the reporting cannot have the line, at any price.
Government receivables are their own case. Money due or to become due under a federal contract of at least $1,000 can be assigned only to a bank, trust company or other financing institution, to one assignee for the whole unpaid amount, with written notice of the assignment filed with the contracting officer, the disbursing official and any surety on the contract — the Assignment of Claims Act is what makes receivables financing possible on federal work at all, and its conditions are why a general commercial factor is rarely the counterparty.[3] The federal payment cycle sets out the mechanics.
Healthcare receivables are not commercial invoices at all. A claim against a payer becomes a determinate obligation only after adjudication, at an allowed amount the provider does not set, which is why provider groups are financed on net collectable value rather than on billed charges and why a general commercial factor is usually the wrong counterparty.
The reserve is where factoring surprises people, and it is worth walking through one invoice.
Harlow sells a $50,000 invoice. The factor advances $42,500 and holds $7,500. On day 46 the customer pays the factor $50,000. The factor deducts its fee — 2.5% of $50,000, $1,250 — and rebates $6,250. Harlow has received $48,750 in total, and the arithmetic is exactly what the rate sheet said.
Now suppose the customer short-pays: $46,000 against a disputed $4,000 of freight or damage. The factor collects $46,000, deducts the fee on the full $50,000 face — $1,250 — and the reserve rebate is $46,000 − $42,500 − $1,250 = $2,250. Harlow has received $44,750 on an invoice it booked at $50,000 and paid the fee on all $50,000. The dispute is Harlow's to resolve with the customer, under recourse and under nearly every non-recourse schedule.
Now suppose the customer does not pay at all. At day 90 the invoice is charged back. Under recourse the factor recovers the $42,500 advance from the reserve pool across Harlow's other invoices, or from Harlow directly, or by withholding it from the next advance. The fee has accrued through the ninety days as well: 4.5% of face on this schedule, $2,250 on the $50,000 invoice, deducted regardless. Harlow's other invoices are now carrying a hole. Under non-recourse the same invoice is the factor's loss only if the reason is the customer's insolvency as defined in the agreement, often requiring a filing, and only within the credit limit the factor approved for that debtor in advance. A customer that simply stops paying, disputes the goods, or exceeds its approved limit is Harlow's problem in either structure.
Two contractual items belong in this section because they show up in the reserve statement rather than the rate sheet. A minimum volume commitment obliges you to sell a stated face amount per month or per year and charges the fee on the shortfall whether or not you sold it. A termination fee charges a percentage of the facility limit for leaving before the initial term, which is what keeps a business in a factoring relationship after it could have qualified for a line. Both are negotiable at signing and neither is negotiable afterwards.
A revenue-based advance is neither a purchase of specific invoices nor a loan against a borrowing base. It is a purchase of a fixed dollar amount of future receivables at a discount, sized from the deposits in your bank statements and collected as a fixed remittance each banking day or each week. What it underwrites is the bank account — deposit consistency, average daily balance, negative days and existing positions — which is why it needs no aging, no field exam, no notice to your customers and no debtor credit approval.
Sized against Harlow's $150,000 gap: a $150,000 advance at a 1.15 factor over 9 months.
Inputs: a $150,000 advance, a 1.15 factor, a 9-month term at 21 banking days a month. The APR follows the level-payment method the APR article states. Illustrative, not a quote; pricing depends on qualifications and term.
The dollar cost is $22,500 over 9 months, which is less than either the factoring fees or the line's annual cost in dollars. The comparison is not that simple, and the honest version cuts the other way: the advance amortizes from day one, so the average balance outstanding across the term is roughly half the face, and the annualized rate on a level-payment basis — the method the APR article sets out — is about 35%. Per dollar per day, the advance is the most expensive of the three. Per transaction, it is the cheapest to set up, the fastest to fund, and the only one that leaves the receivables unencumbered: we file no UCC-1 lien against the business, so a business that takes an advance today can still pledge its ledger to a bank line next year, which it cannot do the other way round without a payoff and a termination.
That is the decision rule. An advance is the right instrument for a defined gap with an end — a season, a large order, a contract mobilization, a receivable that is late but coming — and the wrong one for a standing balance that never goes to zero, because renewing an advance against a permanent need is a more expensive way of holding a line. A line is the right instrument for a standing, fluctuating need in a business that can produce the reporting and clear the underwriting. Factoring is the right instrument when the customers are stronger than the business — young, thin-file, concentrated in a few creditworthy debtors — and when notifying those customers is acceptable.
Freight is the industry where factoring is most common and where the comparison is most concrete, because a carrier's costs settle at the pump and weekly on payroll while its revenue settles on the broker's terms, and because the broker's own credit is the collateral. Three things are specific to it.
In our experience freight factoring is almost always non-recourse in name and debtor-specific in practice: the factor approves each broker up to a credit limit before it will buy a load, and a load hauled for an unapproved broker is either declined or bought with recourse. The protection that transfers is against the broker's insolvency, and the security behind it is thin — a property broker must hold a $75,000 surety bond or trust fund under federal rules, claimed against by every carrier a failing broker owes.[2] Concentration limits therefore bind harder in trucking than elsewhere; a carrier running most of its loads for one broker is factoring that broker's credit, not its own book.
Quick pay is the competitor to both products and is priced as neither. A broker's offer of payment in two days against a percentage discount is short-term lending with the rate expressed as a discount; three points for thirty days of acceleration is roughly 38% annualized, and the full conversion, with the fuel and accessorial arithmetic around it, is set out separately. Where quick pay costs more than a factor, the factor is the rational choice; where a carrier's requirement is a fleet expansion or a permanent fuel position rather than a per-load bridge, an advance sized from deposits or a line sized from the ledger is the cheaper structure. Our trucking and transportation financing is underwritten from deposits and does not require the carrier to leave or notify its factor, which is the practical problem a carrier with an existing factoring UCC otherwise faces.
This is information, not legal advice; the statute and the contract control, and an attorney in your state should read yours before you sign a factoring or receivables agreement. Four points are general enough to state.
The UCC filing is the same in both products, and it is the constraint that persists. A factor's financing statement covers accounts, and frequently all assets; a lender's covers at minimum the receivables and the deposit account collections run through. Either blocks the other, and either survives the relationship until a termination statement is filed — which the Code obliges the secured party to do within twenty days of your written demand once nothing is owed — or until the filing lapses five years after it was made.[1] Ask for that termination in writing the day the last invoice clears.
Notification is enforceable against your customer, not merely requested of it. An account debtor that has received a notice of assignment and pays the assignor anyway remains liable to the assignee.[1] Customers' payables departments know this, which is why they treat a notice of assignment as a flag, and why non-notification costs more.
A true sale and a disguised loan are treated differently on the seller's insolvency. Invoices sold in a true sale are the factor's property and outside the seller's estate; receivables pledged to a lender are the borrower's property subject to a lien. Whether an agreement labelled a sale is one — the recourse terms, the reserve mechanics and who bears the loss are what a court reads — is the question that matters most in bankruptcy and least on any other day, and it is a question for counsel.
Disclosure law now reaches factoring. New York[4] and California[5] require commercial financing providers, factoring included, to give a standardized cost disclosure before signing, with a total dollar cost and an estimated annual percentage rate. A factor operating in either state has already computed the annualized figure this article computes; ask for it, wherever you are.
For factoring, in the order a factor is likely to concede:
For a receivables line:
Factoring is the wrong tool when the fee is a large share of the margin. Harlow at a 6% net margin earns $240,000 on $4,000,000 of billings. Whole-ledger factoring at $100,000 a year is 42% of that profit, spent to accelerate money that was going to arrive in 45.6 days anyway. A business that factors its whole ledger to fund a structural loss — one that spends more than it makes in a normal month — is converting an operating problem into an insolvency on a schedule, and borrowing is simply the wrong answer there.
Factoring is the wrong tool when the customers cannot be notified or will not be approved: consumers, progress-billed construction owners, contra accounts, related parties, a single debtor the factor will not carry at the concentration you run.
A receivables line is the wrong tool when the business cannot carry the reporting, when the book is so concentrated or so aged that the borrowing base is a fraction of the ledger, when the need is this week rather than in the six to ten weeks a field exam and a bank credit process commonly take in our experience, or when a factor's or another lender's UCC already covers the receivables and cannot be released.
An advance is the wrong tool for a permanent balance. If the gap never goes to zero, the cheaper structure is one that revolves, and the honest advice from our side is to use an advance to reach the point where a line is obtainable — without stacking a second position on the first — and then to take the line.
Factoring sells the invoice; a receivables line borrows against it; an advance sizes from the bank account and leaves the invoice alone. On a $500,000 book turning 8 times a year, whole-ledger factoring at an 85% advance and a 2.5% tiered fee costs $100,000 a year, 23.5% annualized on the cash advanced, and the tiers make it a sawtooth that peaks on the days commercial customers actually pay. A receivables line on the same book counts only $410,000 of it after the past-due and concentration rules, advances $328,000, and costs $40,000 at a $300,000 balance — 13.3% all-in, with the fixed fees making a lightly used line dearer than its rate. On the $150,000 the business actually needs, factoring costs $35,294 a year, the line $23,500, and a nine-month advance at a 1.15 factor $22,500 in dollars but about 35% on a level-payment basis. The line is cheapest and hardest to get; factoring suits a business whose customers are stronger than it is; the advance suits a defined gap with an end, and it is the only one of the three that leaves the ledger free for the next facility.
For the gap that survives that comparison, we fund $5,000 to $10 million as working capital — decision within 24 business hours, funding within 24 hours of approval, soft credit pull only, no UCC-1 lien filed against the business and no confession of judgment in the agreement — and revolving lines of credit from $10,000 to $2 million. Call 518-312-0382 with your aging and your largest customer's share of it, and we will tell you which of the three you should be looking at.
Every number in the worked example is derived from stated inputs, not surveyed: a $500,000 book turning eight times a year with every invoice paid at the 45.6-day average; factoring at an 85% advance and a fee of 1.5% of face for the first thirty days plus 0.5% for each further ten days or part; a receivables line with $40,000 of invoices over ninety days, a largest debtor at 35% of the book against a 25% concentration limit, an 80% advance rate, interest at 11% (an assumption, not tied to a published index), a 1% facility fee on a $400,000 commitment and $3,000 of monitoring and field-exam cost; and a $150,000 advance at a 1.15 factor over nine months of 21 banking days. The site's arithmetic audit recomputes every published value from those inputs before publication, and any input can be replaced with a reader's own.
Factoring is annualized as fee ÷ cash advanced × turns per year, which is the simple-interest basis a factor's own disclosure would use; the advance is annualized on the level-payment method the APR article states, because its balance amortizes from day one and a simple basis would understate it. The two are not the same measure and the prose says so where they are compared. There is no public dataset of factoring advance rates, discount fees, fee-tier structures, reserve and recourse terms, concentration limits or receivables-line pricing for businesses of this size; every such range is illustrative, drawn from the firm’s experience of the terms offered to a business of this profile, and is labelled as an assumption or as practice wherever it appears.
The legal framework is stated from the primary texts cited — Article 9 of the Uniform Commercial Code on the sale of and security interests in accounts, notification and termination; the federal Assignment of Claims Act on government receivables; the federal property-broker bond rule; and the New York and California commercial financing disclosure statutes. State enactments of Article 9 vary in detail and the article describes the uniform text only.
No. Worked on the same $500,000 book, whole-ledger factoring at an 85% advance and a 2.5% fee costs 23.5% annualized on the cash advanced, while a receivables line at 11% plus fixed fees costs 13.3% all-in at a $300,000 balance. The line is cheaper at every level of cash — by 23.5% at $100,000 and by 41% at $250,000; it is also underwritten on the business rather than its customers, so it is the harder product to qualify for.
Under recourse you keep the credit risk: an invoice unpaid after a stated period — commonly ninety days in the agreements we see — is charged back to you against the reserve or your next advance. Under non-recourse a defined slice of that risk transfers to the factor — in practice the customer's insolvency, within a credit limit the factor approved in advance. Disputes, short-payments and slow payment stay with you under nearly every non-recourse schedule, so read the schedule rather than the label.
Your customer receives a written notice of assignment directing payment to the factor, and once notified can discharge the invoice only by paying the factor. It makes the arrangement enforceable and makes the factoring visible to your customer's payables department. Non-notification factoring routes payment through a lockbox in your name that the factor controls; it costs more, is offered to stronger files, and usually converts to notification when an invoice goes past due.
The factor advances a share of the invoice — 85% in the worked example — and holds the rest as a reserve until your customer pays. At collection it deducts its fee from the reserve and rebates the remainder. A short-payment reduces the rebate while the fee is still charged on the full face, and an unpaid invoice is charged back against the reserve pool across your other invoices — one bad debtor becomes a hole in the whole book.
Eligible receivables times the advance rate. Eligibility removes invoices over a past-due cut-off (usually ninety days from invoice date), the excess of any customer above a concentration limit, contra accounts and related parties. On a $500,000 ledger with $40,000 over ninety days and a largest customer at 35% against a 25% cap, eligible receivables are $410,000 and an 80% advance rate gives $328,000 of availability.
Often, yes. A revenue-based advance is underwritten from bank deposits rather than from the receivable ledger, and we file no UCC-1 lien against the business, so it does not require the factor's UCC to be released or the factor to be notified. What matters is whether the deposits, net of the factor's remittances and any existing positions, can carry the new remittance.
When your customers are stronger than your business — a young or thin-file company with a few creditworthy commercial debtors — and when notifying those customers is acceptable. It is the wrong choice when the fee is a large share of margin, when the customers are consumers or progress-billed construction owners, or when the whole ledger is being sold to fund a business that loses money in a normal month.
Travis Yule founded Full Send Funding in 2021 and leads it from Middle Grove, New York. He writes about working capital from the underwriting side of the table — what the numbers actually have to say before a business gets funded.