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Return To Factoring FAQ Archive   Is it risky for a factoring company to purchase past-due invoices? Answered By Editor Collecting payment on past-due invoices is generally not considered a big risk for factoring companies. These kinds of companies are equipped for collections and past-due funds. It is their business, and they know their margins very well. Thus, purchasing past-due invoices is not really an issue for them. With that said, since they do know their anticipated profit margins, they will generally pay more for newer invoices. Older past-due balances are considered a greater risk, since there is a greater chance the customer will default on the invoice. Thus, the factoring company will pay less for older invoices. In fact, while most companies pursue invoice factoring as a means to increase their cash flow, some companies complete invoice factoring deals in order to avoid the risks associated with waiting for invoice payment. The factoring company is well aware of these risks. keywords: Factoring | Debt Factoring | Invoice Discounting | Accounts Receivable | Cash Flow | Factoring Company | Receivables Collections | Past Due Invoices | Risk Operating Working Capital Business Working Capital

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