How to Talk to a Factoring Company ( If You Don’t Know the Lingo)

If you run a business that waits 30 days or more to get paid, you already know the problem. You do the work now. You cover payroll now. You pay vendors now. But the money shows up later.

That’s where factoring comes in. And that’s also where many business owners freeze up. They think they need to speak “finance” to even start the conversation.

You don’t.

You can talk to factoring companies for small business without knowing the jargon. You just need to know what to say, what to ask, and what actually matters.

Here’s how to handle that first conversation without overthinking it.

Start With Your Problem, Not the Product

You don’t need to lead with “I want factoring.”

Start with what’s happening in your business.

Say things like:

• “My customers pay on net 30 or net 60.”
• “Cash flow gets tight between invoices.”
• “I need to pay carriers or vendors before I get paid.”
• “Growth is fine, but timing is the issue.”

That’s enough.

Factoring companies for small business work with these problems every day. When you explain your situation clearly, they already know which questions matter next.

Know the One Sentence Explanation

If someone asks what factoring is and you want to keep it simple, use this:

“I send invoices to customers on net terms, and a factoring company advances the money so I don’t have to wait.”

That’s it.

You don’t need to explain structures, fees, or contracts upfront. Those details come later, once you know if it even fits your business.

The Basic Questions You Should Ask

You don’t need a long checklist. Ask a few direct questions and listen carefully to the answers.

“What invoices do you work with?”

Some factoring companies for small business focus on specific industries. Shipping. Fashion. Staffing. Manufacturing.

Ask if they already work with businesses like yours. If they do, onboarding is usually smoother.

“How fast do you fund?”

Timing matters more than anything else.

Ask how quickly money hits your account after you submit an invoice. Same day. Next day. A few days later. Get a clear answer.

“Who do you look at for credit?”

This is important and often misunderstood.

In most factoring setups, the focus is on your customer’s ability to pay, not yours. That’s different from a bank loan.

Ask directly how credit checks work and who they apply to.

“What does it cost?”

You don’t need every detail right away, but you should understand the basics.

Ask how fees are calculated. Ask when they apply. Ask if there are minimums or volume expectations.

If the answer sounds vague or avoids the question, slow down.

Words You’ll Hear and What They Mean

You don’t need to memorize terms, but it helps to recognize a few common ones.

• Advance rate: the percentage of the invoice you get upfront.
• Reserve: the portion held back until your customer pays.
• Notice of assignment: a standard notice that payments go through the factoring company.
• Recourse vs non-recourse: who carries the risk if a customer doesn’t pay.

If someone uses a term you don’t know, stop them. Ask what it means. A good factoring partner explains things clearly. They don’t rush you.

What You Don’t Need to Pretend

You don’t need to:

• Act like you understand every financial detail.
• Agree on the first call.
• Share sensitive information without context.
• Apologize for asking basic questions.

Factoring companies for small business expect these conversations. If someone talks down to you, that’s useful information. It tells you to keep looking.

Be Honest About Your Volume

Don’t inflate numbers. Don’t guess.

Be clear about how many invoices you send each month and their average size. Factoring works best when expectations are realistic.

This isn’t about impressing anyone. It’s about fit.

Ask What Happens as You Grow

If your business is scaling, ask how the relationship changes over time.

Can funding increase as volume grows?
Does pricing change?
Is the process flexible?

You don’t need exact projections. You just need to know whether the setup supports growth or limits it.

Red Flags to Watch For

Pay attention to how the conversation feels.

Be cautious if:

• Fees are unclear or constantly changing.
• You feel pressured to sign quickly.
• Answers stay vague when you ask direct questions.
• The focus stays on contracts instead of your business.

Factoring companies for small business should feel like partners, not gatekeepers.

Keep the First Call Simple

The goal of the first conversation isn’t to close a deal. It’s to understand if factoring fits your cash flow needs.

Explain your situation. Ask clear questions. Take notes. Then step back and think.

At BP Financing, that’s how we approach it. We work with businesses that operate on net terms and need reliable cash flow to pay partners on time. We keep the process straightforward and focus on whether it makes sense for both sides.

If you’re exploring factoring and want to talk it through without pressure, reach out. A simple conversation is often all it takes to know your next step.