If you have done some web searches and seen the advertisements out there then you may think that the deal is already done. These advertisements are designed for businesses that are desperate, and while the factoring companies can move quickly there is generally a higher price to pay. However, a company that takes the time to do their due diligence will often save you money throughout the life of the relationship.
How long the due diligence process is going to take ultimately depends on you. Accounts Receivable Finance Companies are motivated to your financed as quickly as possible and in most cases the biggest hold up in the process is the customer getting the invoice factor the paperwork and documentation they need. Once they have all of the information from you, they can start the Due Diligence process. While there are variances in the process, for most companies it should only take a few days.
They are going to run searches on both the business and the owners looking for any liens or judgments, as well as credit checks on your clients. If everything comes back clean then they are ready to move forward. If any issues arise, they will address them with you at this time.
The best way for you to handle any issues you think may arise is to be upfront and honest with the Invoice Factor. You are building a rapport with them and it is better to start the relationship with honesty and trust than to have them question if you are trying to hide something.
The Invoice Factor wants to win your business and see you grow, however in most cases the slowdown or change in time frames is the business’s ability to get them the information the company needs. A good rule of thumb is if you are on a deadline get the factoring company your information and documents as quickly as possible. They are confident in the time that they need to do their due diligence and is generally only altered by the businesses timeliness in responding to their requests.
Remember, your lack of planning does not constitute an emergency for the Factor.
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