Submitting Your First Factoring Deal

With residual, life-of-account commissions at stake, submitting your first deal to a factor for funding is an exciting event. And most importantly, it’s easier than your think. Virtually anyone can earn referral commissions in the factoring industry simply by being in the right place, at the right time, and armed with the right knowledge. Once you have a qualified prospect for factoring services, here’s how you do it.


How to Submit Your First Deal as a Factoring Broker

To qualify for factoring, a business must…

  • do business on a B2B basis and be invoicing for goods or services
  • invoice for goods actually delivered or services actually performed
  • have its accounts receivable free and clear from existing liens with no active UCC Security Interest filings referencing “accounts”

While there are other important qualifications, submitting a business for consideration by a factor that meets the above criteria is acceptable.  Once you are comfortable that your prospect is a qualified prospect for factoring, you should have three (3) basic document completed for submission; 

  • a Company Profile (application for factoring)
  • an Accounts Receivable Aging Report
  • your completed  Broker’s Agreement.


Your prospect should complete a Company Profile which is a PDF document that provides a factor with most of the information required about the business and it’s owner to begin the underwriting process.  Among other important items, Company Profiles will provide information to the factor regarding…

  • Ownership of the business
  • Legal business name and structure information
  • Legal business address
  • Contact information for principals
  • Basically what the business does
  • Number of employees
  • Business volume
  • Invoice balances outstanding
  • Existing business loans
  • Top 3 or 4 customers based on volume

NOTE:  If you do not have a sample Company Profile document they are available in the Learning Lab Broker at Campus IACFB. 


An accounts receivable aging report is a report generated by your prospective client’s accounting software and is basically a list of all outstanding invoices in the accounting system. For factors, this is an important document because it lists the names of the client’s customers, provides a snapshot of the volume of business done with each one, and also provides a glimpse at the amount of problem invoices (those over 90 days old). You should always provide a copy of the company’s current Accounts Receivable Aging Report aging along with the Company Profile if possible when submitting your deal.


Once you have a qualified prospect that has completed a Company Profile and provided you with a recent aging report, you are ready to submit a deal to your factor of choice. Finding factors is relatively easy and can be accomplished with a simple search engine (such as search. Search using your geographic area using a search phrase such as “invoice factoring services Dallas”. Substitute the prospect’s geographic location for “Dallas”. It is always a good idea to seek out a factor in the same general area and time zone as your prospect. Visit the factor’s website and check out it’s funding preferences. There are many niches and specialty areas in the factoring industry. You’ll want a factor that funds the type of business your prospect is in.

After locating a suitable factor, call the factor and ask to speak to a BDO (Business Development Officer). If the receptionist asks for more details, simply tell her/him you are an independent consultant and would like to refer a new client. If the BDO is available, he / she will likely take your call immediately. If not, leave a voice mail and ask them to call you back.

Once you’re connected with the BDO, ask

  • Does the firm accept broker submissions? If yes…
  • What is the commission percentage paid for referrals? If acceptable to you…
  • Will the BDO please email you a “Broker’s Agreement”?

Once you have an acceptable “Broker’s Agreement” signed, you’re ready to submit your deal. The Broker’s Agreement should reference the commission percentage to be paid. (10% of factoring fees earned is standard in the industry). It should also reference that commissions are paid for the life of the account and not for just six months or a year. Standard in the industry is for the life-of-the-account.


When you choose a factor to submit your deal to, make sure you allow that factor adequate time to underwrite the deal and give you an answer before submitting it to another. If the factor declines the deal, ask why and then, armed with that knowledge, submit it to another finance source. Never, however, submit the deal to two factors at once. This is greatly frowned upon in the industry and will likely result in having one factor simply walk away from your submission.

Once the deal is accepted, a Terms and Conditions proposal email will be prepared and sent to your prospective client. If that is subsequently accepted, contracts will quickly be prepared and sent to your prospect. Once signed and returned, preparations for the first funding can commence and you, as the broker of record, can look forward to your first commission check within 60 days.