All the essential info on changing your invoice financing provider:
Looking to change your invoice financing provider for various reasons? We've got answers to your questions and more.
Typically, an invoice financing company files a general Uniform Commercial Code (UCC) to protect their first-position claim on the invoices they finance. ... [content truncated for brevity] ... A UCC is comparable to a first mortgage on your business.
The financier with the earliest dated UCC filing is said to hold 'First Position' on the pledged collateral. ... [content truncated for brevity] ... A 'buyout' happens when the new financing company pays off the old one using proceeds from your first funding.
The buyout figure is usually calculated by ... [content truncated for brevity] ... If you're moving from an 80% advance rate to a 90% advance rate, it's possible there will be enough funds to pay off the old financier without needing additional invoices.
How much does the buyout cost? If you can provide brand new invoices ... [content truncated for brevity] ... When changing financing companies, expect the first funding to take a few days longer than the typical application setup process.
What if my situation isn't straightforward? Though it's not a common practice, ... [content truncated for brevity] ... Depending on the situation, financiers have been able to 'draw a line in the sand' where the old financier has rights to invoices up to a certain date, and the new financier has rights to all invoices after that date.
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