What is Non-Notification Factoring?
Invoice factoring (also called receivables financing) is a financing tool wherein a factoring client factors – or sells – accounts receivable invoices to a factoring company. The factoring company essentially gives the client an advance on monies owed them by a customer for a small fee, called a factoring fee. When the customer pays the invoice, in traditional invoice factoring, they remit payment directly to the factoring company instead of the factoring client – the organization that originally invoiced them for goods or services.
In traditional factoring, the factoring company has direct contact with the customers of the factoring client at one or more points in the approval, invoicing and customer invoice payment process.
Choosing non-notification factoring (sometimes referred to as confidential factoring) enables the factoring client to minimize contact between the factoring company and its customers. The customer experience remains seamless and the factoring client’s brand retains the only brand impressions. The factoring company’s communications (invoices, statements, letters, etc.) are “white-labeled,” or branded to that of the client, and customer payments are directed to a similarly white-labeled PO Box or electronic account.