What is factoring?

Factoring is the purchase of accounts receivable at a discount. As a business owner, factoring allows you to sell slower turning receivables and get your money within 24 to 48 hours instead of waiting 30 to 45 days to get paid.

How do you determine the amount you will pay me for my commercial accounts receivable?

We look at a variety of different information. Since our primary source of repayment is your customer, we look at their creditworthiness and how quickly they pay their bills. If you have a credit worthy customer and they pay their accounts receivable in 60 days, the cost will be higher than if they pay in 30 days because our money will be outstanding longer. We also look at the concentration or the amount you have outstanding with any one customer as a percentage of your total outstanding. If you have a diversified customer base that is credit worthy, the cost factor of your receivables will be less.

How much money will I get up front?

The upfront money is referred to as the advance rate. Depending on your industry and the quality of your customer base, your advance rate could be as high as 90%.

If my advance rate was 90%, what happens to the other 10% when you get paid?

When we get paid by your customer, we take back the amount advanced first, then we take out our fee which is normally determined by the amount of time our money is outstanding, and then we rebate the balance back to you. (For example, if you sold us an invoice for $1000 and you had a 90% advance rate, and a discount of 3% based on 30 day terms, on day one we would have advanced you $900. Assuming your customer paid in 30 days, we would take a discount of $30 or 3% and rebate back to you $70. You would have received in total proceeds $970.)

How do I get my advances and my rebates?

We have several options to send you money. We can wire if you need the money the same day, send an ACH if you can wait until the next day, or if you are a transportation company that has a fuel card account,  we can deposit funds directly to your fuel card account. If you like money the old-fashioned way, we can mail you a check.

How often can I send you invoice’s to purchase?

You can send invoices daily, weekly, or as frequently as you would like. Our account managers will work with you to determine the best frequency to meet your cash flow needs.

How do you determine pricing?

There are two main components to determine pricing. The first is the cost of capital being advanced and the second is the administration and the collection of the outstanding receivable. Since we do the credit analysis and collection, the average invoice amount is important in determining the cost. If your average invoice is $500 versus $5000, the administrative cost as a percentage would be higher on the $500 invoice.

Do you call my customers to collect the invoice?

We do. Keep in mind the success of our business is dependent upon our ability to collect invoices. Our people are professional and don’t use heavy-handed tactics to get paid. In most cases we develop relationships with your customers and get paid quicker than you would collecting the invoices yourself.

What happens if my customer doesn’t pay?

We do recourse factoring which gives us the ability to charge back to you customer invoices that don’t pay. If your customer doesn’t pay, we can take proceeds from collections of your other customers and pay off the invoice they didn’t pay. Since we monitor credit quality closely, in most cases we get paid.

How difficult is it to get approved?

Since our primary source of repayment is your customers, we don’t put as much weight on your financial statements and time in business.Many times we can finance a startup company and fund it throughout the growth of the business and into maturity.

What is the application process and how long does it take to get approved?

 We ask for information that should be readily available to you. Our application asks for basic information such as the name of your business, the state you’re organized in, your ownership structure, and your anticipated volume. We like to have a copy of your open Accounts Receivable, and a copy of your organizational documents such as articles of incorporation, operating agreement, or state registration. Once we have a completed application and supporting documentation, we can make a decision within 48 hours or two business days.

What if my personal credit is bad?

Since we are not making personal loans, your personal credit score has minimal impact on our decision making process. We understand that cash flow can frequently be tight when building a business, resulting in poor payment history. The important thing for us is your ability to provide a service or a product within the parameters of your customer’s needs.

How do you look at bankruptcy?

Before, during, and since the recession, we have seen several companies and owners file bankruptcy. Bankruptcy has helped many companies restructure their debts and continue in business. We view bankruptcy as a necessary tool to restructure debt during difficult times. In fact, we will provide debtor-in-possession financing for companies in bankruptcy or clients contemplating bankruptcy.

Are there industries that you don’t factor?

There are industries that are very difficult to factor. The healthcare industry is one of the most challenging because the relationship with the health care provider is with the patient and not an insurance company.  Since our focus is business-to-business transactions, the healthcare industry presents unique obstacles.   Another industry that has challenges is the construction industry. Because there are multiple levels of lien exposure and frequently several subcontractors, it can be very costly to manage this type of business relationship.

Will you factor transportation brokers?

We will factor transportation brokers as long as we are allowed to pay the carrier providing the service to the broker. Since the carrier is entitled to the largest portion of a brokers invoice, we make sure the carrier is paid for his service. The broker’s commission or spread is earned when the shipper pays the invoice. If a broker’s receivables are higher than its carrier payables, there’s a good chance we can work something out.

Begin the application process online!


Pavestone takes pride in its ability to rapidly process factoring requests, from application to final funding. Many times a decision will be made to fund a business within 48 hours.

Please get in touch to find out how we can work together to help you achieve your goals. Our friendly factoring experts will answer your questions and can provide further information on our services and products.

Use the handy email form or give us a call at 855 621-3996 during normal business hours and find out first hand why our motto is "We can make this happen"!

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