How To Apply For A Factoring Loan

How To Apply For A Factoring Loan

How to​ Apply For a​ Factoring Loan
Factoring is​ the​ process of​ securing money against outstanding accounts receivables for your company .​
Despite the​ idea out there that only businesses that are in​ financial trouble use factoring,​ it​ is​ actually a​ common practice for many businesses .​
From time to​ time,​ most every business,​ and especially small ones and start-ups,​ will find themselves short of​ cash while waiting for payment on​ a​ product or​ service already provided .​
What factoring does is​ allow you​ to​ have the​ money for payroll and overhead while you​ wait.
Factoring loans are not hard to​ get .​
In fact,​ most businesses qualify for factoring of​ up to​ 80% of​ the​ value on​ outstanding accounts payable receipts .​
Despite the​ ease of​ them to​ get,​ there is​ an​ application process involved when using factoring with your business .​
Knowing how to​ apply for a​ factoring loan can make the​ entire process go more smoothly for you​ when the​ time comes to​ get your factoring loan.
How it​ Begins
The first part of​ how to​ apply for a​ factoring loan depends upon what institution you​ use for the​ service .​
If you​ are using an​ online financial institution or​ at​ least the​ internet as​ a​ means to​ contact them,​ you​ will likely be filling out a​ simple online application .​
If you​ are working with an​ institution in​ person,​ then you​ will fill out paper work in​ person instead of​ electronically .​
Either way,​ though,​ you​ will fill out similar information about not only your company,​ but also you​ personally.
Business Part of​ Application
When looking at​ how to​ apply for a​ factoring loan,​ you​ can divide the​ process into three parts .​
The first of​ those parts is​ information about your business .​
To fill out your factoring loan application you​ will need,​ obviously,​ the​ name of​ your company .​
You will also need to​ give them the​ DBA if​ you​ have one,​ the​ physical address of​ your business,​ and all other contact information including email addresses,​ website,​ and even telephone and fax numbers.
From your business,​ you​ will also need to​ make sure you​ can supply your federal tax ID number and state of​ formation .​
What type of​ business you​ have in​ terms of​ what you​ do as​ well as​ whether your company is​ an​ LLC,​ corporation,​ partnership,​ or​ whatever else yours may be.
Personal Information
The next part of​ your factoring application will likely ask for personal information .​
Again,​ you​ will need to​ have contact information and address .​
They will also likely want to​ know what percentage of​ the​ company you​ own .​
Finally,​ for credit purposes,​ they will in​ almost every case ask for your social security number.
Customer Information
Finally,​ when learning how to​ apply for a​ factoring loan,​ you​ will need some client information .​
You will likely be asked to​ supply the​ names of​ at​ least a​ couple of​ your biggest customers whose receipts you​ will be factoring .​
Additionally,​ you​ may have to​ provide information about how much money’s worth of​ unpaid A/R you​ have.
Knowing how to​ apply for a​ factoring loan is​ important so that you​ can have information at​ the​ ready when the​ time comes .​
You will want to​ have information about your company,​ you​ personally,​ and your clients .​
With all of​ that in​ hand,​ you​ will be only a​ few hours or​ days away from the​ factoring loans you​ need to​ keep your business running efficiently.

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