Fund.do has put out new guidelines and policies regarding invoice factoring. In the wake of the Covid-19 situation, these guidelines are aimed at helping small businesses seek financial aid.

Invoice factoring is a financial borrowing method that involves a borrower selling/factoring their unpaid invoices to a third-party lender (also called a factor). Factoring companies facilitate the borrowers to obtain funds on an almost immediate basis with quick approval.

As the world is struck with a global pandemic, the demand for various products and services are reaching an all-time low with the limited inflow of cash. One of the major issues faced by small business owners is that of procuring finances.

Looking at this situation, Fund.do has decided to make public some of the important guidelines and policies regarding the issue and terms of invoice factoring. Here is what these guidelines include:
How Does Invoice Factoring Work?

Invoice factoring requires the borrower to approach the lender/factor with the unpaid invoice(s) they want to sell. The complete process can also be carried out online. You can visit Fund.do and apply for their factoring services within a few seconds. Generally, the borrower receives 70% - 95% of the invoice’s value as the final financial aid.

The lender deducts a specific percentage as their factoring fees (typically ranging from 0.25% - 10%). A small percentage of the balance is held back for security purposes and the remaining amount is advanced to the borrower. On the due date, the factor directly obtains the invoice’s amount from the debtors and returns the amount held back as security to the borrower.

Factors Considered For Qualification
Major factors considered by a lender for approving the application of the borrower include:
• Due Date – Most lenders require the invoices to be due in less than three months.
• Credit Score – Both business and personal credit score of the borrower are important eligibility criteria. The lender may also check the creditworthiness of your debtors.
• Revenue – Majority of the lenders consider the average monthly revenue of the borrowing business at least for the past three years. Minimum requirements vary for different lenders.
• Years Of Activity – Most lenders require their borrowers to have an operational history of one year at least. However, this can be adjusted if they rank high on other factors.
Factors Determining Invoice Factoring
The total cost a borrower pay for getting your invoices factored is usually determined by:
• The invoice value
• The business and industry of the borrower
• Reliability of the debtors
• Business revenue
With these guidelines, Fund.do calls out to small business owners to avail financial services to fund their cash flow needs during the rough times. Fund.do is a financial lending organization based in Boca Raton, Florida. It provides a variety of factoring services to small businesses, such as Freight Factoring, Oil and Gas Factoring, Construction Factoring, Staffing Factoring etc. The company also sanctions small business loans, such as Merchant Cash Advance, Business Line of Credit, Business Term Loans and many more.