Questions to ask a factoring company

Before signing, ask about recourse, fees, reserve timing, customer notice, filings, minimums, termination, and dispute handling.

Key takeaways
  • Good questions require the provider to point to the contract, not just summarize it verbally.
  • Get written answers and compare them against the actual agreement text.
  • Focus on terms that affect your specific invoices, customers, and industry.
  • Unresolved questions before signing are harder to address after the relationship starts.

Good questions force the provider to point to the agreement. Sales summaries are useful, but contract text controls.

Ask for answers in writing and compare them with the fee schedule, purchase agreement, guarantee, notice, and UCC authorization.

Core questions

  • What makes an invoice ineligible?
  • What happens after a customer dispute?
  • How are fees calculated if payment is late?
  • What must happen before the UCC filing is terminated?
  • Who contacts my customers, and when?

Related reading

Sources

  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
  • Secured Finance Network - Secured Finance Network. Accessed 2026-05-19. Industry education source for secured finance and asset-based lending context.
  • Uniform Commercial Code Article 9 - Uniform Law Commission. Accessed 2026-05-19. Reference for secured transactions concepts including receivables and filings.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.