What will you need to get started?
To get started with a factoring agreement with Lendr, here’s what you’ll need:
- Factoring application
- Updated aging report (AR)
- 2 years of most recent business and personal tax returns
- 3 month of business bank statements
What is an Aging Report?
An aging report (AR) is a document that lists unpaid customer invoices and unused credit memos by date ranges. The primary purpose is to keep track of unpaid customer invoices and the number of days they have been outstanding (i.e. overdue for payment).
What documentation will I need?
You don’t need to submit these all at the same time, but here is the complete list of documents you may need. Every business is different and the documents needed will reflect that, don’t worry if this list seems long.
- Completed factoring application for all majority owners
- Two years of corporate tax returns and two years of personal tax returns for all majority owners
- Copy of driver’s license for all majority owners
- Articles of Incorporation for the company and the Operating Agreement
- Workers Compensation Certificate
- Financial statements for Year-End of the past calendar year
- YTD AR Aging, YTD PL, YTD Balance sheet
- A copy of any current invoicing
What is a NOA?
Factoring and asset-based lending are similar in that your assets are utilized to help you get funding right away.
With both commercial asset-based lending and personal asset-based lending, you get to keep your assets. Then, it is your responsibility to collect invoices and pay back the asset-based loan as agreed in your terms and conditions. Asset-based lending is more like an equity line of credit or term loan from an asset-based lending bank.
Factoring is a “buy-out.” You are not responsible for the collection of the invoices you sell. Instead, we purchase them from you at a small discount and then collect the funds from your clients and customers.
What is a NOA?
A NOA or Notice of Assignment is a letter signed by you that notifies your customer of your updated payment options. Which is a fancy way of saying paying us directly.
Is factoring considered a loan?
No. Neither the business or factor acquire or issue debt as part of a factoring agreement.