First off, here are the DON’T’S associated with choosing a factor:
Do Not Engage a Factor Who:
Charges a fee up front (Appraisal Fees on real estate excepted).
Engages you exclusively for longer than 30 days.
Will not tell you the payment amount or term to expect.
You do not need a factor if your business provides products or services that take less than one week to produce and if payment is typically received within a week of invoicing.
You Should Consider Working With a Factor If:
You are having a hard time making payroll.
You are overdue more than 30 days on your payables.
You have no reliable cash available for expansion.