Frequently Asked Questions

Q: Who is SLBC?

A:  A commercial factoring company specializing in the purchase of business to business invoices/accounts receivable for cash.  

Q: What is considered an "account receivable" for purposes of factoring?

A: Money that is owed to a business by its customers for services or goods provided.  Money that has been invoiced and is not yet paid.

Q: Why would a company sell its accounts receivable to SLBC?

A:  Companies that find cash flow as a recurring situation or run a seasonal business , for example, often cannot afford to have cash tied up in receivables 30-60 days.  They need the cash immediately to meet pressing financial demands such as payroll, tax deadlines, and to pay suppliers.

Q: Why is factoring of receivables not a loan?

A:  Factoring is not a loan so no debt is incurred.  The factor actually purchases the receivables.  In contrast, a loan from a bank or finance company incurs further debt for a company.

Q: Would a bank loan make more sense?

A: No or usually not for our clients. Banks often have protracted and restrictive lending requirements relating to cash flow, profitability, equity, collateral, business plans and years in business which prohibit smaller or medium sized companies from obtaining needed funds.   As a factor, SLBC specializes in invoice purchasing basing its decision on the quality and creditworthiness of your customers.  We look to the financial strength of your customers and not at yours.  This is why factoring is great for start ups and for smaller businesses.  The approval process is also simplified and takes only a matter of several days.  

Q: When factoring who invoices the customers?

A: You prepare the customer’s invoice and forward it to the factor for an immediate cash advance.  The factor then bills the invoice to your customer and follows up to ensure receipt of payment.

Q: How are the fees for SLBC services determined?

A: Fees are minimal and competitive.  Fees vary client to client considering the customer base creditworthiness, average payment cycle, invoice size and volume. Please call our office to receive more details on a fee structure that will work for your company’s needs.

Q: Do I need to factor all of my invoices when I start factoring?

A: No. You decide which customer's invoices you want to factor and which invoices you want to keep for your own.  There is no requirement to factor all of your invoices.

Q: Will my receivables be held as collateral?

A: Yes. A first position on all accounts receivable is required while you are factoring.

Q: Are factoring companies the same as collection agencies?

A: No. Collection agencies work for businesses that have customers who have not paid their bills.  Factoring companies work with businesses that have customers who pay on time.

Q: Does my company need to have good credit to factor?

A: No. Factor approval is based on your customer's and their ability to pay.

Q: Can a start-up business qualify for factoring with little or no credit history?

A: Yes. A start-up is a good fit as long as customers have good payment history.  We work with companies at all stages of development including companies with a limited history. 

Q: Is there a minimum dollar amount to qualify for factoring?

A: We generally look to work with companies that generate from $10,000 and upwards  in monthly receivables. However, please speak with our associates to discuss your specific situation.

Q:  Does the location of my business or my customer’s business matter?

A:  No. SLBC offers nationwide service throughout the United States.