FAQ

QUESTIONS TO ASK YOURSELF BEFORE CHOOSING A FACTOR

Will factoring help me capitalize on opportunities to grow my business?

Yes, you need cash to keep your business running, but your customer has a period of time to pay. Instead of waiting for a customer to pay, let UC Factors provide you with the working capital that you need now.

Does my business qualify for factoring?

We ask that you supply us with customer references, reasonably accurate in their paperwork, and doing business with credit worthy customers.

Will my customers object to me factoring invoices owed by them?

There are some customers who will question their invoices being factored. However, this is extremely rare. We normally are able to overcome this problem by explaining what factoring is to them. Their hesitation is from the lack of understanding what factoring is.

How can I be assured that you will do everything you say that you will do?

We are happy to supply you with past and present client references. You are dealing with our managers, not high-pressure sales people who will say whatever it takes to get your business and then never follow through with their commitments. This is why we will supply you with our client references, they will let you know how we do business.

APPLICATION & QUALIFICATION

Is there an application fee?

No, we absorb 100% of the cost of qualifying and preparing all documents for a new client.

How long does it take to process an application?

The majority of our applications are processed with 24 to 48 hours.

What will you need from me to process my application?

With the completed application, please send us your company’s current aging report, articles of incorporation or other organizational documents, and an example of your invoice.

Will UC Factors factor a new business?

Yes, as long as the owner of the business can give references that show he or she is knowledgeable and experienced in the industry their business belongs to.

Learn more about, Is Factoring a Good Choice for New Businesses?

Can I still get approved with poor credit?

Yes, we base our funding decisions on your customer’s credit rating and payment history, so even if you have had problems in the past you can rebuild with invoice factoring.

Learn more here, Does My Credit Impact My Factoring Approval?

Can I still get approved with past due taxes?

You can get an approval if the tax agency has not yet filed a lien.  If a lien is filed, we cannot approve until the lien is released or subordinated.  If a federal tax lien is filed after we commence doing business, we would have to stop until the lien is released or subordinated to.

Can I still get approved with a Chapter 11 Bankruptcy?

You can get approved with a chapter 11 bankruptcy but in order to commence business you must obtain approval from a bankruptcy court.

Is a Personal Guarantee required to be approved?

A personal guarantee is necessary, but it is important to understand that on a non-recourse account you are only guaranteeing faithful performance.  This means you are guaranteeing to sell us non-contingent invoices.

What if the rights to my receivables are already given to someone else?

All existing UCC-1 filings on your accounts receivable must be removed or subordinated before we can approve your account.  If you have filings that the secured party is willing to subordinate, we can assist in preparing the necessary paperwork.

What types of filings are made in connection with your Factoring program?

We place a Uniform Commercial Code filing with the Secretary of State against all present and future accounts receivable in the state where our client is registered. We must have first position on this filing in order to buy the accounts from our clients.

Why is there a filing against all present and future accounts receivable, if I can select the invoices I wish to sell and the ones I wish to carry on my own and not factor them?

There is no other practical way to make a single filing that will allow factoring of any receivable you wish to sell. Also, accounts the client doesn’t sell become collateral for the faithful performance of our client in following the rules of our Security Agreement. There is also a concern that if we don’t cover all receivables, there is a possibility we could be buying someone else’s collateral at a later date.

Does UC Factors require a long-term contract?

Yes, normally 6 months or 12-month contracts.

FACTORING COSTS

How much does it cost to factor my invoices?

There are many considerations such as: industry, volume, payment terms, customer’s credit worthiness, etc. that may influence your factoring rates.

How much can I get advanced?

Rates are customized when quoted and are determined largely by each client’s industry, volume, receivables and timeliness of payments.

Are there Set Up Fees?

No, we absorb 100% of the cost of qualifying and preparing all documents for a new client.

What hidden fees might be associated with factoring?

None, our goal is to be as straightforward as possible and we will never surprise our clients with hidden fees. Other Factors may charge for Same Day Funding, Credit Checking, Interest, Fee Per Invoice, Administration and Non-Factored Fees.

What is being covered in my factoring fees?

Credit checking, funding, collection follow up, statements, end of month aging list, and access to your account online 24/7.  If you have us bank Wire or ACH (EFT) your funds, you will pay a small fee for this ($5-$25).

What happens if I don’t meet my Minimum Sales Volume Commitment?

You will pay the minimum factoring fee on the amount of the shortfall.

Are my factoring fees tax deductible?

Yes, all factoring fees can be used as tax deductions.

FUNDING PROCESS

How quickly does UC Factors fund on invoices?

Within 1-3 business hours of receiving client’s required paperwork, sometimes sooner.

Do we have to factor everything?

No, as long as you meet the minimum volume requirement per month, there is no other obligation pertaining to volume, however we do recommend that you factor all the receivables due from any particular customer; this will avoid any complication on where the payment should be sent to.

Learn more at, Can I Choose Which Invoices to Factor?

How often can I factor my invoices?

You may submit invoices for factoring daily.

How do I submit my invoices?

You can submit invoices by regular mail, overnight mail, bring them in to our office, or send via email.

Is there a maximum amount I can factor?

There are no maximum amounts to funding. Factoring grows with your business. If you have invoices for credit worthy debtors, funds are available.

Do you bill out my invoices?

Yes, we will bill out funded invoices via mail or email that same day.

Can I Factor invoices I billed out already?

Generally speaking, the answer is no.  The only exception we make is with our very first purchase before you had the opportunity to submit them to us.  If the subject invoices can qualify and be verified we may fund on those.

CREDIT AND COLLECTIONS

How does UC Factors handle collections?

UC Factors is extremely professional in handling collections. Your customers are treated as if they were our customers. We are very diligent about making calls at the appropriate time but, we are careful to treat your customers with professional courtesy.

Does my customer mail payment to me still?

No, not if it is factored invoice. UC Factors places an assignment stamp stating the payment are to be remitted directly to us.

What do I do if a customer mails me a check for a Factored invoice?

You would email/fax a copy and forward to us that same day. Do not cash the check no matter what. If it is made out to you, we will endorse it over to UC Factors, our agreement gives us this right.

What do I do if a check is made out to my company and not the Factor?

If the check is payment for factored invoices, you must submit it to us as is.  We have power of attorney to endorse you name in this circumstance.

How long does it take to return residuals (rebates)?

The same day your customer’s Check/ACH is received by us. Most factors send rebates monthly or whenever you make a request.

How will customer know where to send payments?

UC Factors places an assignment stamp stating the payment are to be remitted directly to us.

What is the difference between Recourse & Non-recourse?

There are two different types of factoring programs – recourse and non-recourse. With recourse, your business must buy back receivables that the factoring company is unable to collect payment. In a non-recourse factoring agreement, the factoring company takes the risk on non-payment by your clients.

Learn more about, Recourse vs Non Recourse Factoring.

What happens if my customer doesn’t pay?

What happens if a customer does not pay will depend on how your account is set up. An account may be set up in one of two ways -recourse or non-recourse. A recourse account requires a guarantee that you will either buy back unpaid invoices or deduct the amount from your Bill of Sale or reserve funds in-full or progressively until paid in full. With a non-recourse account the loss will be absorbed under certain conditions.

What happens if my customer pays short?

The exact disposition of a short payment will depend on how short it is.  If the amount of reserve held back will absorb the shortage, then it will be processed by offsetting the shortage against the reserve refund. If the shortage is too big to handle that way then the next available money will be used to offset the shortage.

How do you handle approving my customer credit?

We will first check if the account can be found in our database files or through our credit resources. If not, we will request Bank and Trade references, these may take a few days based on the time-frame of the responses from the references.

TRANSPORTATION FACTORING

What benefits are there to using a factoring company for my freight bills?

Factoring is an excellent way of getting money fast to manage cash flow to pay for operating expenses without creating debt. You could go to a bank and try to get a loan, but there’s no certainty you will be approved. And even if you are approved, you may not be able to get additional loans for critical equipment such as trucks or trailers.

Because you are factoring your outstanding freight invoices, we are focused on your customers’ credit. Plus, a good factoring company will also take the hassle of collections off your back and provide you with important back office support services.

Why should I make sure my customer is credit worthy before accepting a load?

You wouldn’t buy a truck without looking at it first, right? Then why haul a load for a customer without knowing they can be relied upon to pay?

Checking credit regularly will dramatically reduce serious issues such as payment delays. Every load that you don’t get paid means you need as many as 12 loads to make up the cost. 

How do I submit my invoices and BOL?

You can submit invoices and BOLs by regular mail, overnight mail, bring them into our office, or via email.

FREIGHT BROKER FACTORING

What benefits are there to using a factoring company for my freight brokerage?

The primary benefit for a brokerage company to factor is to get your trucks paid as fast as you wish.  This builds a reputation which will attract a truck following and enable expansion.  Additional benefits are credit checking and credit protection as well as collection follow up which leaves you free to promote your business.

Who pays my Carriers?

We will pay your carriers for you.

Can you pay my Carriers by quick pay?

Yes

Do you charge a fee for quick pay?

No. You may charge the Carrier a fee, the fee you charge will be yours to keep. This can or will offset your factoring fee. 

How can payment be made to my carriers?

We can either send payments via ACH or check