The Invoice Factoring Process

Once your application is approved and an initial payment amount and factoring rate are agreed on, we will collect payment directly from your customer once the invoice is due. After completing the payment, we’ll subtract our factoring fee and send you the remaining balance.

Several things determine the factoring rate we charge, but in most cases, it’s between one and five percent. The trustworthiness of the customer (the one paying the invoice) plays a role in your factoring fee. The factoring rate may be higher if your client has a spotty record when paying invoices. Factoring many invoices and having a good relationship with your clients can reduce the factoring rate we charge. Essentially, it’s about the risk involved in paying invoices and being able to collect the payment from your customer, which determines your factor rate.

Invoice factoring is an incredibly forgiving method of financing for your business. It quickly gives you the necessary working capital, especially for businesses with less-than-ideal debt ratios.
Since your customers are paying the invoices to Denali Advance, your specific debt ratio is less important. It also helps you not take on additional debt. Invoice factoring is not considered additional debt.

Depending on the size of your business, chasing down slow-paying companies for their invoice payments may put an additional burden on your staff that you don’t have the capacity for. When factoring, it’s up to us to collect the payments.

Take advantage of opportunities that arise without waiting for the full invoice terms of your client’s payment terms. An ongoing factoring relationship makes cash flow management much simpler and less chaotic since you’re in charge of the services you sell, and we’re in charge of collecting payment on the invoice.