Solutions · Credit challenges
Your receivables carry
more weight than a score.
Businesses with credit challenges can often still access working capital through invoice factoring. Factoring underwriting focuses heavily on the quality of your receivables and the creditworthiness of your customers. Your business history, liens and other underwriting factors can still matter, and each situation is reviewed individually.
Based in Oklahoma City. Funding businesses nationwide.
By the Hexagon Commercial Finance team.
Why credit scores block funding that the business can clearly support.
A personal credit score describes how an individual has handled consumer obligations. It says very little about whether a commercial customer will pay a 40,000 dollar invoice for work that was delivered and signed for. Traditional lenders use the score anyway, because it is cheap to obtain and easy to defend inside a credit committee.
The result is that owners who put personal resources into surviving a difficult period are penalized for exactly that. Personal cards were used to cover payroll during a slow quarter, utilization spiked, and the score fell, even though the business itself recovered and is now profitable.
Factoring looks at a different set of facts, because it is funding a different kind of risk.
What weighs most heavily in a factoring decision.
The credit quality of your customers. If a national general contractor, a major carrier, a hospital system or a government agency owes the money, the payment is more likely to arrive on predictable terms. That reliability is central to the security behind the advance.
Whether the work is complete and accepted. Factors fund delivered work. Signed delivery tickets, approved progress billings, accepted timesheets and clean purchase orders all speed approval.
Whether the receivable is clean. Competing liens, existing assignments, and unresolved tax liens must be addressed, and usually can be with the right paperwork.
Invoice quality and consistency. Clear terms, accurate amounts and a recognizable pattern of billing make verification straightforward, which keeps funding fast.
Being straight about the limits.
Factoring solves a timing problem. It does not solve an unprofitable business, and it will not manufacture cash where there are no creditworthy receivables behind it. If you sell to consumers, get paid at the point of sale, or invoice customers who routinely do not pay, factoring is not the right tool and we will tell you so rather than sell you a facility that will not work.
We would also rather hear about a lien, a judgment or a prior default in the first conversation than find it later. Disclosed early, most of these are structural details. Discovered late, they cost everyone time.
At a glance
- Credit review
- One input among several. Each situation is reviewed individually
- Primary underwriting focus
- Receivable quality and customer creditworthiness, alongside other factors
- Tax liens
- Reviewed case by case, often alongside a payment plan or subordination
- Short operating history
- Reviewed case by case
- Structure
- Purchase of receivables, not a traditional term loan
- Service area
- Nationwide, from our Oklahoma City office
Questions people ask
A credit score should not decide your next contract.
Book a Cashflow Consultation. Based in Oklahoma City, funding nationwide.