Factoring Agreement Surge Could Lead to Overpayment, Funding Specialists Say

With the recent rise in new factoring agreements as business owners test the model for the first time, funding specialists worry contracts with unfavorable terms may rise too.

Viva Capital Funding, the leading invoice factoring company, says it's seeing more newcomers to the factoring industry. Interest in the alternative funding solution, brought on by higher-than-normal bank loan denials and an aversion to debt, has helped raise awareness for factoring overall. However, the learning curve could also leave some business owners paying more than needed for funding. A full breakdown of terms and what business owners should look for are outlined in "Understanding a Factoring Agreement: Issues, Tips, and More," which is now live on VivaCF.net.

Factoring applications typically account for around two percent of funding requests according to historical Small Business Credit Surveys, making it one of the most underutilized forms of funding. The latest, however, shows a one percent hike. The shift represents hundreds of thousands of business owners choosing the unique form of funding, many of whom are unfamiliar with factoring and are learning about the process as they go. Viva Capital's Director of Business Development and Partner Armando Armendariz says the industry shift is well represented within the company too.

"It's exciting to see people exploring factoring for the first time and realizing they can get funding for their business even if they've been turned down by traditional lenders," Armendariz explains. "Being able to get cash right away is a huge relief for them."

Still, business owners sometimes put off finding alternatives until they need to make payroll or have an unexpected expense, which can add even more pressure to sign a contract without fully understanding the details or finding out if they can get a better deal he says.

"I've met with business owners who couldn't make payroll because their factoring company didn't come through with fast funding and others who agreed to volume minimums, which left them paying much more than they should have," Armendariz continues. "I sit down with people every day and am happy to explain the terms and options to them, but I worry about the ones who don't have somebody with experience on their side."

Small and midsized companies that are struggling with slow-paying clients and those looking for alternative funding solutions are encouraged to learn more about invoice factoring or obtain a complimentary quote at VivaCF.net


Founded in 1999, Viva helps B2B businesses of all types accelerate cash flow through specialized funding solutions like factoring, equipment financing, and asset-based lending. Their simple qualification process makes it easy for small and mid-sized companies to get vital funding despite lack of credit or time in business. Additional information is available at VivaCF.net.


Armando Armendariz

Source: Viva Capital Funding


Categories: Business Finance

Tags: factoring agreement, factoring agreement terms, factoring company, factoring contract, invoice factorting, termination fees

About Viva Capital Funding

View Website

Viva Capital Funding has earned a name as one of America's leading invoice factoring companies by going above and beyond to help their clients thrive.

Viva Capital Funding
11427 Rojas Dr.
El Paso, TX 79936
United States